The problem is more pronounced in commercial real estate, Rosen says. White collar criminals turn to commercial real estate to integrate ill-begotten gains into the economy because dollar amounts can be high and transactions complex, with different corporations sometimes involved, including off-shore corporations that wire money in from accounts that aren’t regulated by the U.S.
In residential real estate, amounts and frequency tend to be smaller than in commercial, but even so it shouldn’t be thought of as out of the ordinary that someone might be trying to launder funds through a home purchase. Money from illegal drug sales is often behind these home purchases.
The guidelines NAR and Treasury developed are organized into three types of risk: geographic, transaction, and customer. When you have a transaction that appears to fall into one or more of these categories, you want to conduct a little bit of due diligence to see if you need to give law enforcement officials a head’s up. Geographic risk applies to the origin of one of the parties, often the buyer. Some countries have weak financial controls or they’re on a federal government watch list. If you have a party from one of these countries, you’ll want to take a minute to get more information to see if something’s suspect.
Detailed news story link: click here
Link to NAR anti money laundering guidelines: click here