NIGERIA has been ranked fifth among countries with the most politically exposed persons (Pep) involved in real estate money laundering schemes in the US in a new report published by American think tank Global Financial Integrity.
According to the report which focused on illicit financial flows, corruption, illicit trade and money laundering, over the last five years, more than $2.3bn had been laundered through US real estate, including millions more through other alternate assets like art, jewellery and yachts. Titled Acres of money laundering: Why US Real Estate is a Kleptocrat’s Dream, the report delved into the murky world of global money laundering.
It demonstrated the ease with which kleptocrats, criminals, sanctions evaders and corrupt government officials chose the US real estate market as their preferred destination to hide and launder proceeds from illicit activities. One key finding from the report showed that over 50% of the reported cases in the US involved politically exposed persons, which was particularly problematic considering the lack of guidance on Pep identification.
“Several excellent reports, including the US Department of the Treasury’s 2020 National Strategy to Combat Terrorist and Other Illicit Financing, document the high risk of money laundering in the US through the real estate sector, highlighting the role of gatekeeper professions in facilitating these schemes. In the US, well over half of all cases involved a Pep, with the top three countries all from within the Western Hemisphere – Mexico, Venezuela and Guatemala, followed by Malaysia and Nigeria,” the report added.
In addition, the report recommended a more robust approach by the US government in addressing the issue, including requiring real estate agents to identify the beneficial owner of a residential real estate purchase. It also suggested making legal professionals the lead reporting entity for identifying money laundering risks in commercial real estate transactions.