The Financial Action Task Force published their report on Money Laundering & Terrorist Financing Thorugh the Real Estate Sector (June 29, 2007).
I was disappointed in the report. I have a history of structuring complex real estate transactions. The report did little to help distinguish between legitimate and illegitimate structures. All of the structures and most of the transactions described in the report have completely legitimate uses. There are lots of tax and regulatory reasons for use of structured loan, trusts and many entities.
What the report missed was how the illegitimate funds got into the structures.
For those of you who are not familiar with real estate structures and transactions, the report does provide some interesting case studies. The red flag indicators in Annex B is a useful list.
