News

Family Wins Fight With U.K. Cops Over ‘Billionaire Row’ Home

09/04/2020

The family of Kazakhstan’s former president overturned a freeze on their 80 million-pound ($98 million) property portfolio, dealing a setback to U.K. law enforcement officials’ use of a new tool to combat money laundering.

The freeze was part of three unexplained wealth orders brought by Britain’s National Crime Agency. One of the London parcels sits on one of the city’s most exclusive roads -- dubbed Billionaire’s Row -- because of its wealthy residents.

It’s likely the first time a wealth order has been successfully challenged in the courts. Earlier this year, the wife of a jailed Azeri banker lost her fight to overturn such an order after spending sprees at Harrod’s department store attracted the suspicion of authorities.

The portfolio in Wednesday’s case, owned by offshore companies, was frozen by a London court a year ago at the request of the crime agency due to possible money laundering.

The NCA alleges the mansions were acquired by Rakhat Aliyev, a former senior official in the Kazakhstan government. Aliyev, who died in 2015, was previously married to Dariga Nazarbayeva, the daughter of former Kazakhstan President Nursultan Nazarbayev. Nazarbayeva and her son brought the challenge to the NCA.

Unexplained-wealth orders, introduced in 2018, force individuals to prove that their funds are from legitimate sources. The NCA said it would appeal the ruling.

“Unexplained Wealth Orders are new legislation and we always expected there would be significant legal challenge over their use,” Graeme Biggar, an NCA official, said in a statement. “We have been very clear that we will use all the legislation at our disposal to pursue suspected illicit finance and we will continue to do so.”

The NCA said in court documents that there were reasonable grounds to suspect that Aliyev “was involved in serious crime, including bribery, corruption, blackmail, fraud, forgery and money laundering.”

But a London judge ruled the NCA’s assumption that Aliyev, when he was alive, was the ultimate beneficial owner of the Billionaire’s Row property was “unreliable.” There is no evidence of a link between him and the mansion, Judge Beverley Lang said in her ruling.

She discharged the freezing orders on all three properties, which included the 39 million-pound mansion on Bishops Avenue in London’s tony Highgate neighborhood, a 32 million-pound mega-apartment in Chelsea and another mansion on Denewood Road, near Hampstead Heath acquired for 9 million pounds.

“To say that the assumptions of the NCA in this case were unreliable is pretty damming,”said Dame Alison Saunders, a partner at Linklaters and the former Director of Public Prosecutions. If the ruling stands, unexplained wealth orders could “lose some of their attraction for law enforcement agencies.”

A spokesperson for Nazarbayeva said she was pleased the court agreed with her that the NCA’s investigations were flawed and that she hasn’t been involved in any wrongdoing.

“The court’s powerful judgment demonstrates the NCA obtained the orders on an inaccurate basis as part of a flawed investigation which was entirely without merit,” Nurali Aliyev, Nazarbayeva’s son, said in an email. “The NCA deliberately ignored the relevant information I voluntarily provided and pursued a groundless and vicious legal action, including making shocking slurs against me, my family and my country.”

https://www.bloomberg.com/news/articles/2020-04-08/family-win-fight-with-u-k-cops-over-billionaire-row-mansion

— With assistance by Jonathan Browning

(Updates with comment from lawyer in 11th and 12th paragraphs)