Schemes Used To Launder Money In Real Estate
Real estate is a lucrative industry, and it's no surprise that criminals are using it to launder their dirty money. Money laundering is the process of disguising the proceeds of illegal activity as legitimate funds. In the real estate industry, it is common for criminals to use various schemes to launder their money. This article will explore some of the most common schemes used to launder money in real estate.
Shell Companies
Shell companies are typically used to hide the true ownership of assets. Criminals can set up a shell company and use it to purchase real estate without disclosing their true identity. This makes it difficult for law enforcement to track down the true owner of the property.
Structuring Transactions
Structuring transactions involve breaking up large sums of money into smaller transactions to avoid detection. For example, a criminal may use multiple bank accounts to make several small deposits instead of one large deposit. This makes it difficult for authorities to trace the source of the funds.
Mortgage Fraud
Mortgage fraud involves falsifying information on a mortgage application to obtain a loan. Criminals can use this scheme to purchase real estate with dirty money and then sell the property to obtain clean money. This scheme can also involve inflating the value of the property to obtain a larger loan.
Trade-Based Money Laundering
Trade-based money laundering involves disguising illegal funds as legitimate business transactions. Criminals can use real estate transactions to hide the true nature of their funds. For example, they may overpay for a property and then receive a refund from the seller in a different country. This makes it difficult for authorities to track the source of the funds.
Cash Purchases
Cash purchases of real estate can also be used to launder money. Criminals can use cash to purchase real estate without leaving a paper trail. This makes it difficult for authorities to trace the source of the funds.
Conclusion
The real estate industry is a prime target for money launderers. Criminals use various schemes to launder their dirty money, including shell companies, structuring transactions, mortgage fraud, trade-based money laundering, and cash purchases. It is important for real estate professionals to be aware of these schemes and to take steps to prevent them. By working together with law enforcement, we can help to prevent money laundering in the real estate industry.