The approach taken by the Civil Recovery Unit (CRU) to the investigations in relation to suspicions about assets held by an individual was expressed in a recent statement by Linda Hamilton the Head of the CRU. She stated "We follow the asset, not the name. If somebody has a lavish lifestyle, a nice home and cars but they have no record at HMRC then either they have fiddled their tax, which they should not be doing, or they do not have a legitimate income."
She was speaking in relation to a recent case where the CRU sought recover funds, which themselves were not illegally obtained. The CRU argued that the defender intended to use funds of £2,000 which he had obtained as a result of an inheritance for unlawful activity rather than to purchase a car as he claimed to be the case. The defender eventually abandoned his defence of the action.
This case demonstrates the ability of the CRU to go beyond recovering proceeds which are criminal and also recover funds which were lawfully obtained but which an individual plans to use for unlawful activity. In doing so the CRU were using the extensive powers given to them under the Proceeds of Crime Act 2002.
The comments which Linda Hamilton made illustrate the importance of asking questions where a client appears to be living a lifestyle which they have no means to justify. This could raise a suspicion of money laundering. Ensuring that you know your client and ask relevant questions when carrying out business for them is of critical importance to ensure you avoid committing the criminal offence of failure to report knowledge or suspicion of money laundering.
If you have any questions about money laundering or need advice about proceeds of crime matters please contact us on the details below.