The UK's Serious Fraud Office secures its first Unexplained Wealth Order

On 17 January 2025, the Serious Fraud Office ("SFO") secured its first Unexplained Wealth Order ("UWO") in the High Court – its first in seven years, following the introduction of UWOs in 2018. The UWO related to a £1.5m property owned by the ex-wife of an individual convicted of fraud, and demonstrates the SFO's willingness to use all the tools at its disposal to pursue asset recovery. This briefing provides a summary of the case.

Background to UWOs

UWOs are a type of civil investigative tool – they are applied for by law enforcement agencies, but in the High Court and applying a 'balance of probabilities' standard. UWOs require the respondent to explain the nature and extent of their interest in specified property and how it was obtained. They are available in respect of respondents who hold property anywhere in the world and can be served on persons outside the UK.

A UWO will be granted where the Court is satisfied that there are reasonable grounds to believe that:

• the person holds assets with a cumulative value of over £50,000;
• the known sources of the respondent's lawfully obtained income would have been insufficient to enable them to obtain the property, or the property has been obtained through unlawful conduct; and
• either (a) the respondent is a politically exposed person ("PEP") (or a family member, close associate or a connected person of a PEP) or (b) there are reasonable grounds for suspecting that the respondent (or a person connected with them) has been involved in serious crime (whether in the UK or overseas).

If the UWO is not complied with (without reasonable excuse), the property will be presumed to be "recoverable property" for the purposes of Part V of the civil recovery provisions in the Proceeds of Crime Act 2002, and the enforcement authority may apply for seizure. Indeed, this occurred recently in relation to property that was the subject of the UK's first UWO, when the NCA obtained an order for civil recovery, in August 2024, of property which was made subject to a UWO and interim freezing order in 2018. Failure to comply with a UWO may also amount to a contempt of court.

For further background, please see our prior briefings on the potential impact of UWOs and the changes to the UWO regime introduced via the Economic Crime (Transparency and Enforcement) Act 2022 ("ECTEA").

The Schools case

In the present case, the UWO has been granted against the owner of a £1.5 million property, the ex-wife of Timothy Schools, who was convicted of fraudulent trading, fraud by abuse of position and money laundering in August 2022. The SFO also secured an interim freezing order.

While UWOs were introduced in 2018, this is the SFO's first use of the power; nor have they been extensively used by other UK authorities to date. The National Crime Agency is currently the only other agency to have used this tool, in four reported cases to date. This contrasts with the Home Office impact assessment which preceded the introduction of UWOs, which estimated that there would be 20 UWOs per year.

This may be because the imposition of UWOs often involves lengthy and complex investigations, presenting a challenge for under-resourced enforcement authorities - and may have been impacted by the outcome in the NCA's second UWO case, where the UWO was discharged and the NCA was left with a significant costs liability. If so, the future use of UWOs may increase as a result of the reforms under ECTEA in 2022 which introduced cost protections for enforcement agencies pursuing UWOs (in that, provided law enforcement act reasonably, the UWO respondents will bear their own costs even if the UWO ultimately fails). This change to the regime is discussed in our previous ECTEA briefing, and it will be interesting to see whether the Schools case marks the start of an up-tick in what appears to be an under-used tool.

Another feature of the Schools case is that the SFO has applied for a UWO subsequent to Mr Schools' conviction. Much of the earlier discussion of UWOs, when they were introduced, envisaged their use as an alternative to prosecution, for example when criminality could not be proved to the criminal standard, or where the respondent or evidence was out of the jurisdiction (for example, a foreign PEP) but held property in the UK. This case therefore demonstrates the flexibility of the tool as an aid to post-conviction asset recovery in appropriate cases. Nick Ephgrave, SFO director, commented that: "This is a milestone case for the SFO […] Wherever criminal assets have been hidden or dispersed, we will progress our investigations with determination and explore new methods to recover funds for victims and the public purse."

It is also noteworthy that the three most recent UWOs – two from the NCA, and the one in this case – related to property suspected of being connected to persons involved in serious crime, rather than PEPs. This may underscore the continued law enforcement focus on serious domestic criminality in general, and fraud in particular, as the UK continues to experience what has been described as a fraud "epidemic". This development occurs in parallel with other measures to target fraudsters, including most notably the new offence of failure to prevent fraud – discussed further here.