It is estimated by the National Crime Agency (NCA) that serious organised crime in the UK potentially generates billion’s of pounds of laundered money every year.
It is widely accepted that criminal gangs use ‘property’ as a means to elicit the ‘cleaning’ of illegally obtained funds, of course, one of the major advantages of using property to do this is that a large amount of cash can be ‘cleaned’ in a single transaction.
Money Laundering in the UK is being carried out on an immense scale and because of this the Government and HMRC are now taking their role in combating money laundering even more seriously and certainly at least a part of their focus is on the estate agency sector which of course includes Property Sourcers and Deal Packagers.
So, how do criminal gangs ‘Launder’ money through property?
They may approach a sourcing agent posing as a legitimate investor and ‘reserve’ a property deal agreeing to pay a large ‘holding deposit’ or ‘reservation fee’, they then cancel the purchase and get a refund of their cash which irrespective of the source of the money, a refund in the form of a cheque or electronic transfer from a reputable bank, company or agent, would never be questioned by the new receiving bank or institution, hence the money has now been ‘cleaned’ by an unsuspecting Property Sourcer or Deal Packager.
Another way of larger sums of money being laundered through property would be to purchase a property for cash and then within a short space of time re-sell the property to an unsuspecting investor. The person laundering the money will of course want a cash buyer and would also readily agree to a discount for a ‘fast’ purchase as all of the cash released from the subsequent resale will have been ‘cleaned’ for them and so a small percentage loss would be more than acceptable.
If you don’t have suitable policies, procedures and processes in place not only are you risking aiding someone to launder money but also potentially high fines or even imprisonment!
Research links for extra information bulk up the report: