How can money be laundered in the Real Estate Sector?

• Criminal proceeds are invested in high value negotiable goods to take advantage of reduced reporting requirements to conceal the source of proceeds of crime
• Purchase of property in the name of a nominee such as an associate or a relative.
• Payment of initial deposit with a cheque from a third party, other than a spouse or parent.
• Selling property below market value.
• Substantial down payment in cash and the balance is financed by an unusual source or offshore bank.

Identifying suspicious transactions for Real Estate Brokers:

1. Payment of initial deposit with a cheque from a third party, other than a spouse or parent.
2. Substantial down payment in cash and the balance is financed by an unusual source or offshore bank.
3. Customer arrives at a real estate closing with a significant amount of cash.
4. Customer inadequately explains the last minute substitution of the purchasing party’s name.
5. Customer purchases personal use property under corporate/business veil when this type of transaction is inconsistent with the ordinary business practice of the customer.
6. Customer purchases property without inspecting it.
7. Customer purchases multiple properties in a short time period, and seems to have few concerns about the location, condition, cost and anticipated repair costs, etc. of each property.
8. Customer pays the amount of a lease in advance using a large amount of cash.
9. Customer does not want to put his/her name on any document that would connect him/her with the property or uses different names on offers to purchase, closing documents, deposit receipts, etc.