17 Sep 2015
On 2 June 2015 AUSTRAC, the Australian Transaction Reports and Analysis Centre, released two new reports in order to “help Australian businesses identify money laundering methodologies used through real estate agents and lawyers”.
The press release that accompanied the reports noted that:
“Laundering of illicit funds through real estate is an established money laundering method in Australia. Criminals are drawn to real estate investment in Australia because it is possible to purchase in cash, it offers reliable financial returns and it is possible to disguise ownership.
Methods of laundering money include mixing illicit funds with loan funds, manipulating the value of properties, use of third parties to present as the official owner, purchasing properties to facilitate criminal activity, generating rental income to seem legitimate and using front companies and trusts to hide the identity of ownership.
Criminals also use professional facilitators such as lawyers to help them seem legitimate.
Money laundering methods include using lawyers and other professional services to conduct transactions [on] their behalf, establishing trusts and other structures to hide identity, recovering fictitious debts, [and] making payments through lawyer’s trust accounts.”
AUSTRAC also provided the following list of “indicators” relevant to identifying money laundering in the real estate or legal sector:
- using cash to settle transactions which are not usually cash-based, such as real estate purchases
- multiple and unexplained funds transfers, especially from overseas
- difficulty identifying the ultimate source of deposits
- moving funds to/from the law firm’s trust account to/from bank secrecy jurisdictions or high-risk jurisdictions.
Copies of the two reports, Money laundering through legal practitionersand Money laundering through real estate, can be downloaded below.
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