convergence

Money Laundering into Real Estate
Spring are assessed, it is evident that MLRE by corrupt leaders was a galvanizing force for the
anger citizens felt at the waste, corruption, and self-indulgence of their leadership.
As we examine the forces for financial and political stability in the first decades of the 21 st
century, it is clear that abuse, corruption, and money laundering into domestic and commercial
real estate have played an important role in destabilizing markets and societies. The abuses of
property markets deserve greater attention and must be more fully integrated into efforts to
regulate markets and establish transparency and accountability.
Acknowledgment
This chapter has been developed from a report prepared by the author for the Organized
Crime Global Agenda Council of the World Economic Forum. The author appreciates the
support of the council members who provided sources to conduct this research and also highlighted
important trends they observed in their own regions.
Notes
1 Based on interviews with specialists in real estate at the Global Agenda Council meeting of the World Economic
Forum, Fall 2010.
2 Mary Beth Sheridan, “Oxon Hill Development Has Ties to Terror,” The Washington Post, April 19, 2004,
available at .
3 Financial Crimes Enforcement Network, “Suspected Money Laundering in the Residential Real Estate
Industry: An Assessment Based upon Suspicious Activity Report Filing Analysis,” Washington, DC, April 2008.
4 Money laundering into real estate by terrorist groups has been observed in the Middle East. See Joe Becker,
“Lebanese Bank Seen as a Hub of Hezbollah’s Financing,” The New York Times, December 13, 2011, available
at .
5 Illustrative of this is the real estate sector in Dubai, which received money from Afghanistan and elsewhere that
contributed to inflated prices. Dexter Filkins, “Depositors Panic over Bank Crisis in Afghanistan,” The New York
Times, December 2, 2010, available at .
It also had one of the steepest corrections in its real estate with
drops of over 40 percent when the bubble burst. For a discussion of the aftermath, see Liz Alderman, “After Crisis,
Dubai Keeps Building, But Soberly,” The New York Times, September 29, 2010, available at .
6 Peter B.E. Hill, The Japanese Mafia: Yakuza, Law, and the State (Oxford: Oxford University Press, 2003), 185.
7 Ibid., 186–187; also discussed by Grant Newsham, “Yakuza Influence on the Japanese Financial Sector: Security
and Solvency in Japan,” April 25, 2011, at Terrorism, Transnational Crime and Corruption Center, George
Mason University, Fairfax, VA, available at .
8 See the Web site of the Italian environmental organization Legambiente (League for the Environment) that
has been closely following the illegal construction of the Mafia since the 1990s. A whole section of its site is devoted
to this topic. See ; also see Shasta Darlington, “Italian ‘Eco-Mafia’ Booms,
Outstrips Economy,” Reuters, June 1, 2005, available at .
9 Brigitte Unger et al., Detecting Criminal Investment in the Dutch Real Estate Sector (Dutch Ministry of Finance,
Justice and Interior Affairs, January 2010), 202–203; Brigitte Unger and Joras Ferweda, Money Laundering in the
Real Estate Sector, Suspicious Properties (Cheltenham, UK, and Northampton, MA: Edward Elgar, 2011).
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