The new National Crime Agency is facing a major embarrassment after it abandoned most of its attempts to seize the UK and US assets of Israel Perry, the Israeli tycoon who is also suing the agency for £10m for compensation of losses allegedly caused by the lawsuit.
This landmark case is based on the expanded powers of the NCA to freeze the worldwide assets of any foreign businessmen and oligarchs who have moved their wealth into the UK. The change in the law last year has major implications for international high-net-worth individuals who have bought property in London and moved funds into UK bank accounts.
The NCA’s predecessor, the Serious Organised Crime Agency, has been investigating Mr Perry for the past four years and froze his UK assets because it claims his properties and bank accounts were derived from the theft for which the businessman was convicted in Israel.
But now the NCA has withdrawn its claims on many of Mr Perry’s assets, which have a combined total of £22m. They include £5.2m worth of art at his mansion in South Street, Mayfair, another £6.5m in Hoare and Lloyds bank accounts in London, a further £8.3m in accounts held by the Safra private bank and £155,000 held in a safety deposit box, according to NCA estimates.
The NCA has also paid £846,000 of Mr Perry’s legal costs and the bill could be higher as he is suing the agency for a further £1.5m plus interest for his legal fees relating to civil court hearings in the High Court and Supreme Court over the past four years.
Legal sources say that dropping claims against such assets, which were frozen by a Property Freezing Order, could result in a claim for compensation based on losses suffered by Mr Perry. This could increase the £10m already being claimed by Mr Perry in his lawsuit against the NCA in the High Court. The total bill is likely to be at least £13m and could be much higher.
A spokesperson for the NCA told The Independent: “Israel Perry is a convicted criminal serving a 10-year sentence for crimes which formed the basis of Soca’s civil claim. The NCA has not withdrawn the claim against him and litigation is ongoing. It would be inappropriate to comment before this is resolved.” The Perry case is being watched closely by UK lawyers acting for oligarchs and for foreign super-rich clients. It has created a significant precedent for wealthy foreign businessmen who have parked their wealth in London because it has given the UK authorities extra powers to seize their worldwide assets.
But the new concessions by the NCA in the Perry case are a major setback for the UK authorities in enforcing the law. Last year the Supreme Court ruled that it was illegal for Soca to seize Perry’s possessions outside the UK.
The court declared that the agency had over-reached its authority and could only freeze his UK assets, which included two £10m houses in Mayfair, and office blocks in the City. But this is disputed by the NCA. “The change in the law allows us to recover property overseas which has been obtained through unlawful conduct in the UK or overseas,” said an NCA official.
If the case against Mr Perry ultimately fails and the bill for the taxpayer rises, it will be embarrassing for Soca, but it could provide an escape route for the new NCA to blame it on its predecessor.