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Money Laundering Risks in Commercial Real Estate: An Analysis of 25 Case Studies

03/05/2024

How and why do the criminal and corrupt stash ill-gotten proceeds in the commercial real estate sector?

For a comprehensive understanding of the money laundering risks in the commercial real estate sector, a joint effort was made by the Anti-Corruption Data Collective (ACDC), the FACT Coalition, and Global Financial Integrity (GFI). This collaboration involved meticulous examination of news articles, government indictments, and other publicly available information, resulting in the first-ever systematic overview of how suspicious money may be infiltrating U.S. commercial real estate.

This new report identifies 25 cases in which illegal, allegedly illicit, or suspicious funds were funnelled into commercial property over the last 20 years, with a total value of the property purchased exceeding $2.6 billion. To no surprise, California, Florida and New York are some of the most favoured locations for these illegal investments, but criminals stashed money across some 20 different states.

Originating from a diverse array of countries, suspicious funds from 14 nations, including Iran, North Korea, Kazakhstan, Russia, and Mexico, were drawn to the U.S. commercial real estate market. The types of properties involved were equally varied, ranging from hotels and shopping malls to supermarkets, a music studio, and an equestrian facility, demonstrating the breadth and depth of this global money laundering issue.

This report not only details these alarming cases but also underscores the urgent need for reform. It provides clear recommendations for the U.S. Treasury to swiftly implement comprehensive anti-money laundering measures, a crucial step in safeguarding the colossal U.S. commercial real estate industry from further exploitation.

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