FCA bans trio behind £35.5m scheme designed to bypass visa rules

Key dates

2016-01-01

The period began during which the FCA found that the investor-visa scheme operated; the exact start date is not specified in the publication.

2019-01-01

The period ended during which the FCA found that the scheme operated; the exact end date is not specified in the publication.

2021-03-12

The FCA imposed restrictions preventing Dolfin from carrying on regulated activities, following concerns including its operation of the investor-visa funding scheme.

2021-06-01

Dolfin entered special administration; the exact date in June is not specified in the publication.

2022-02-17

The Home Office closed the Tier 1 investor visa route of entry to the UK.

2026-08-26

The FCA published the enforcement announcement concerning the bans, fines and Joukovski Decision Notice.

Suggested considerations

• Compliance teams may wish to review whether any product or client arrangement could create a misleading impression that a regulatory, immigration or other statutory investment threshold has been met when the client’s own qualifying capital is materially lower.
• Firms should consider testing the end-to-end governance of immigration-linked investment business, including approval of the business model, ownership and control disclosures, conflicts management, introducer due diligence, fee flows and oversight of connected or offshore entities.
• Firms may wish to reassess source-of-funds and source-of-wealth controls where client investments are supported by loans, circular funding, guarantees or funds provided by affiliated entities, and document why the resulting structure is consistent with the relevant immigration and financial-services requirements.
• Senior managers and boards should consider whether regulatory submissions, notifications and attestations fully disclose shadow directorships, controllers, beneficial ownership, related-party involvement and the true commercial purpose of client arrangements.
• Firms should consider conducting targeted reviews of historical investor-visa or residence-by-investment clients, including communications and files supplied to regulators or other public authorities, and escalating any potentially misleading statement or omission through the appropriate remediation and notification processes.
• Training and surveillance may be reviewed to ensure staff understand that conduct outside the core regulated service, including assistance with immigration-rule circumvention, can affect the firm’s and individuals’ integrity, fitness and propriety.
• Where third-party immigration agents or introducers are used, firms may wish to assess their incentives, remuneration, representations to clients, due-diligence records and ongoing monitoring, particularly where fees are unusually high or linked to visa approval.

What changed

This is a final enforcement outcome for Nagy and Maraj, not a new generally applicable rule or supervisory requirement. Both were prohibited from performing any function in relation to regulated activities; Nagy’s discounted penalty was £324,800, compared with an undiscounted £464,000, and Maraj’s discounted penalty was £122,000, compared with an undiscounted £174,300. Joukovski was issued a Decision Notice proposing a prohibition order, but the proposed action has no effect pending the Upper Tribunal’s determination. The FCA found that the arrangement was designed to create a false impression that the Home Office investor-visa requirements had been satisfied, generated at least £35.5 million in fees for connected businesses and immigration agents, and involved concealment from the FCA and

Who is affected

• FCA-authorised wealth managers and private banks providing investment, custody or execution services to overseas high-net-worth clients
• FCA-approved senior managers, directors, controllers and other individuals performing functions in relation to regulated activities
• Investment firms, family offices and introducers involved in investor-visa, residence-by-investment or immigration-linked investment structures
• Firms using connected companies, offshore entities, loans or third-party funding in client investment arrangements
• Compliance, financial-crime, onboarding and governance functions responsible for source-of-funds, client due diligence and regulatory communications

Related regulations

• Financial Services and Markets Act 2000, section 56
• Financial Services and Markets Act 2000, sections 178 to 191
• FCA Principles for Businesses, including Principle 1
• FCA Senior Management Arrangements, Systems and Controls sourcebook
• FCA Fit and Proper Test for Employees and Senior Personnel sourcebook
• FCA Threshold Conditions
• Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017
• UK Immigration Rules, Tier 1 Investor route requiring £2 million qualifying investment