The Intersection of Money Laundering and Real Estate
The use of real estate to launder money is a global concern. In the U.S., regulators and prosecutors steadily have warned that money launderers located both at home and abroad target U.S. real estate transactions because they are a relatively effective and anonymous means of “cleaning” dirty money. For example, in August 2017, the Financial Crimes Enforcement Network, or FinCEN, issued an “Advisory to Financial Institutions and Real Estate Firms and Professionals” which asserted that the real estate industry is vulnerable to abuse by illicit actors looking to launder criminal proceeds specifically. FinCEN attributed this vulnerability to the fact that the value of high-end properties tends to appreciate over time and can shield the owner from currency fluctuations and market instability. Further, through the purchase of luxury property, illicit actors can clean large sums of money in a single transaction.
Reprinted with permission from 2020 Guide on AML by the International Comparative Legal Guides, May / 2020
Copyright © 2020 by Ballard Spahr LLP.
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