UK Luxury properties, including a golf course forfeited [UWO]

Following a National Crime Agency (NCA) civil recovery investigation into acquiring the properties, The wife of jailed banker Jahangir Hajiyev has agreed to forfeit

• A house in Knightsbridge worth approximately £14 million and
• A golf club in Ascot,

The NCA's investigation revealed that the assets were obtained as a direct result of a staggering scale of large-scale fraud and embezzlement, false accounting and money laundering.

The sheer magnitude of these crimes is truly shocking.

2018 UWOs

• In a significant move, the NCA applied for unexplained wealth orders (UWOs) in 2018 regarding the two UK properties and interim freezing orders to prevent their sale, transfer, or dissipation.
• These UWOs, the first ever granted in the UK, mark a watershed moment in the fight against financial crimes.

SOURCE OF FUNDS AND CRIME

• Hajiyev was the Chairman of the Board of the International Bank of Azerbaijan (IBA) until March 2015.
• The following year, a court in Azerbaijan convicted him of various offences, including misappropriation, abuse of office, fraud, and embezzlement, concerning his tenure.
• In 2019, he was convicted of further embezzlement from the Moscow subsidiary bank of the IBA.
• He is currently serving a 16-year jail sentence in Baku.

MONEY TRAIL

• NCA investigators subsequently identified numerous examples of funds derived from the IBA being transferred through multiple accounts in ways consistent with common money laundering practices.
• This was done by a close associate of Hajiyev, acting on his behalf.
• Substantial sums were moved through a network of accounts and companies in various jurisdictions and channelled into luxury assets for the family.
• Jurisdictions included.
• The British Virgin Islands, Saint Kitts and Nevis, Panama, Cyprus and Luxembourg –
• No reasonable explanation was provided to the NCA for the source of funds used to purchase either property.
• A significant proportion could be traced directly to sums generated by promissory notes and loan agreements used to conceal the theft of IBA monies.

THE GOLF CLUB AND GUERNSEY

• The golf club purchase was conducted through a complex and sophisticated structure of
• Luxembourg and Guernsey-registered companies and
• By using offshore trusts in Guernsey and, later, Cyprus.
• This intricate setup highlights the meticulous planning and execution of the illegal activities.

KNIGHTSBRIDGE HOUSE

• Virtually all the funds used to purchase the Knightsbridge house are believed to have come from two specific IBA accounts.
• An associate of Hajiyev directed them to the UK via bank accounts set up in Cyprus, Estonia, and Switzerland in the names of companies with no recorded link to Mr Hajiyev.
• A British Virgin Islands company solely owned by the same associate was used to purchase the house before the property was transferred into an offshore trust also set up in the British Virgin Islands.

Freezing order over the two properties  

• In March 2021, the Agency applied for a property freezing order over the two properties.
• The order was granted on Thursday, 1 August, resulting in the forfeiture of 70% of their value.
• While the Court has concluded that the properties were purchased as a result of criminal activity and are, therefore, recoverable, it has not made any finding regarding Mrs Hajiyeva’s knowledge of how the properties were paid for.

Tim Quarrelle, Branch Commander for Asset Denial at the NCA, said:

• “NCA officers worked tirelessly to track the complex movement of these funds across the international banking system, through shell companies in multiple jurisdictions, in order to ascertain their source.
• “This result comes almost six and a half years after we served Mrs Hajiyeva with the first unexplained wealth order ever granted, and highlights our commitment to using all the tools at our disposal to combat the flow of illicit money into, and through, the UK.”

Simon Armstrong, Deputy Director, NCA Legal, said:

• “The NCA’s investigation was followed by complex and lengthy litigation, which saw NCA lawyers address numerous challenges and use a range of legal powers introduced by the Criminal Finances Act 2017 to successfully recover assets worth millions of pounds.
• “This fantastic result demonstrates how the NCA will deploy all the powers available to identify, pursue and recover the proceeds of crime.”

Sources

5 Aug 2024 https://www.nationalcrimeagency.gov.uk/news/luxury-properties-forfeited-after-six-year-nca-investigation