Legal Pack – Net worth and Personal Expenditure case

1.     Instructions from the solicitors

• The report is for the prosecution of a criminal case, brought under the Proceeds of Crime Act 2002 (as amended by the Crime and Courts Act 2013 and the Serious Crime Act 2015) against Mr Latter and Mrs Sepponov and it should follow the criminal procedure Where areas are not covered by the criminal rules, then the civil rules will apply.
• You are to prepare a financial status evaluation with a net worth method analysis statement, detailing any unknown income in the years under

2.     Case Summary

Bob Latter owns Paradise United, a top-tier football team, and the popular Paradise Islands nightclubs. An anonymous informant called in to state that Latter is living a lifestyle “way above” his means, spending a lot of money on expensive items and night life, which he could never afford through his business investment.

The cursory investigation was conducted. The findings are listed below:

1. A public records search showed that Latter purchased a 9% stake in Paradise United in January 2017 for £85m and owns 100% of Paradise Islands Ltd, the parent company for the four UK nightclubs.
2. The Paradise United accounts for the years ending 31 December 2017, 2018, and 2019 showed losses of £5m, £6m, and £6m
3. The Paradise Islands accounts for the years ending 31 December 2017, 2018, and 2019 showed dividends paid to Latter of £40,000, £50,000, and £50,000 after tax respectively.
4. The Driver and Vehicle Licensing Agency (DVLA) records showed that, in 2017/18, Latter purchased a 2012 Porsche 911 for £75,000 and transferred the vehicle to his son in 2018/19. In 2017/18, he also purchased a 2012 Ferrari 458 Spider for £140,000, and in 2018/19 he purchased a 2014 Lamborghini Huracan for £150,000.
5. Latter is 53 years He married Shirley in 1993, and their son was born in 1995. Latter divorced Shirley in May 2016. The divorce settlement records provide the following information:

The cash at bank was used to pay off all liabilities; the remainder was divided equally between Shirley and Bob (£14,000 each). The house, 10 Rowling Street, and the home furnishings were transferred without claim by Bob to Shirley. Paradise Islands Ltd shares were transferred without claim by Shirley to Bob. The Peugeot went to Shirley. The stocks and bonds were sold and the proceeds divided equally (£190,000 each). Each of the respondents kept their personal effects. No maintenance or child support payments were ordered by the court.

6. In 2017/18, Latter purchased a house for £1.3m. He did not obtain a In 2018/19 it was valued at £1.6m.

7. He married Darcey Sepponov in July She is currently 25 years old and has never been employed.

After reviewing the information, a determination was made to further investigate Bob Latter’s financial activities. The minimal financial status shown for him in the divorce settlement, coupled with his recent financial acquisitions, supports the information received from the anonymous informant. Further investigation reveals:

8. Latter has owned the Paradise Islands nightclubs for many His salary after tax over the 3 years from 2017 to 2019 was £52,000 in 2016/17, £58,000 in 2017/18, and £64,000 in 2018/19.
9. Paradise Islands Ltd had turnover from nightclubs of £12m in 2015/16, £78m in 2016/17 and £110m for each of the years 2017/18 and 2018/19.
10. Latter purchased both the new vehicles from local car Both purchases were made by paying cash in full.
11. Latter made the £20m down payment on the football club with a cheque issued from the First Bank of Bermuda, in the company name of The down payment on the new home purchase was done in the same manner.
12. The First Bank of Bermuda did not release any
13. CAFCON was a trust registered in the Cayman Islands. The registered address belonged to a legal company, J Warner No further information was available.
14. Background checks on Darcey Sepponov disclosed that she is the daughter of Uri Sepponov, a known member of an organised crime
15. Both Latter and Sepponov declined to participate in interviews or to provide any

The following information was obtained through surveillance, a mail cover, and third-party interviews:

16. Latter and Sepponov go to an exclusive Chelsea restaurant almost every Thursday Sepponov shops at the most fashionable stores in town. They attend private shows and have an elaborate night life, often partying with celebrities. They receive mail from jewellery designers, very expensive gift shops in London, and high-end travel boutiques.
17. Latter receives Yacht and Travel
18. Latter also received statements from a stock brokerage firm unrelated to the prior investments in securities that were liquidated for the divorce The amounts shown in the schedule are the actual funds invested in the account. He would have invested

£120,000 in 2016/17, £100,000 in 2017/18, and £150,000 in 2018/19. There were no withdrawals.

19. Pictures on Sepponov’s Instagram and Twitter accounts show herself and Latter at different times since 2016/17 on the same yacht, Diamond Geezer, which is moored at Saint-Tropez, Interviews with mooring staff have established that Latter and Sepponov are often there and that the £20,000 annual mooring fees are paid by Latter. The asset purchase was

documented through French public records, which noted that CAFCON purchased the yacht in 2016/17 for £300,000.

20. Pictures on Sepponov’s Instagram and Twitter accounts also show selfies of herself at “our villa in Antiparos”. The asset purchase was documented through Greek public property records and an interview of the seller of the Latter purchased the villa in 2016/17 for £500,000. He obtained a mortgage on the property for £400,000. The balance of principal owed on the mortgage at the end of 2017/18 was £150,000 and the mortgage was paid off in February 2019. The villa was valued at £550,000 in 2018/19.
21. The third-party interviews conducted by law enforcement resulted in the identification and documentation of several personal expenditures that each had made over the past 2 years, as set out in Schedule 1 below:

Schedule 1: Bob Latter and Darcey Sepponov expenses – 2018 and 2019

22. Other interviews identified that Latter owned a racehorse, Petty Cash, that cost £90,000 in September A 2018 ROA survey of racehorse ownership costs estimated average annual costs of keeping a horse in training at £28,000. Petty Cash has never won a race, and was valued at £30,000 in 2018/19.
23. The credit card bills for Latter and Sepponov are paid in full each The outstanding balance, which had not as yet been billed, as of the year end is £13,000.

3.  Assumptions and relevant points included in the Expert Report produced by AN Accountant:

1. The years refer to UK tax years, ie 2017 is the tax year 2016/17, 2018 is the tax year 2018/19, and so For simplicity, I have assumed that the tax year runs from 1 April through 31 March.
2. I have assumed that any foreign currency amounts are expressed in £ at an exchange rate appropriate for use in a net worth and personal expenditure
3. The financial value of assets, liabilities, and expenditures are included in the net worth and personal expenditures computation at their cash value at the close of each period under If an asset is sold during the period, its value changes to zero. Similarly, if a liability is paid off, its value becomes zero.
4. The starting point or base year is 2016/17. As the base year is not one of the periods charged against the subject, expenditures for that period are not I have assumed that the information contained in the divorce settlement is an accurate representation of Latter’s assets and liabilities at the time of the divorce. The proceedings would be an admission of the subject under oath for the court proceedings. All that was therefore needed to establish 01/04/16 as the starting point for the computation was to add any assets acquired and liabilities incurred from the date the divorce was final through to the end of the (tax) year.
5. The expenditures included are limited to personal Business expenses (being deductible) are not included in the net worth and personal expenditures method unless part of the scheme to conceal the income includes manipulation of business records. In those cases, a separate computation for the business is made.
6. All references in the schedules (unless explicitly stated otherwise) refer to the paragraph in the legal