Homebuyers could compete in real estate auctions against organized criminal gangs using Australia to launder ill-gotten gains, according to evidence provided by law enforcement agencies in a federal investigation.

Representatives from the financial crimes regulator, Austrac, the Australian Federal Police and the Australian Crime Intelligence Commission said at a Senate hearing on Australia’s money laundering laws that criminals use lawyers, accountants and real estate agents to launder tens of billions of dollars in ill-gotten gains. by the real estate market every year.

In a hot real estate market, who to buy is a key issue for the Senate investigation into money laundering and terrorist financing. Credit:Pierre Rae

Austrac estimates that in 2020 alone, Chinese interests laundered $ 1 billion through Australian real estate. Australian Federal Police Assets Forfeiture Task Force leader Stefan Jerga told the inquiry there were times when potential owners would compete with money launderers at auctions .

“Without any fuss… Of course there are examples of a level playing field when you have a well-funded organized crime that uses real estate to launder money. Yes, there will be cases, ”he said.

AFP told the investigation that of the $ 187 million in assets seized in fiscal 2021, $ 116 million was real estate. AFP Deputy Commissioner Ian McCartney said AFP supported expanding the anti-money laundering regime to include real estate agents, accountants and lawyers, saying it There was evidence that individuals in the three “guard” professions had knowingly been involved in money laundering.

The investigation examines whether Australia should implement new laws that require potential “professional facilitators” of large transactions – such as lawyers, accountants and real estate agents – to report suspicious transactions to regulators. Only Australia, Haiti and Madagascar have yet to expand their anti-money laundering and terrorism laws to include “professional facilitators” like agents, accountants and lawyers alongside banks and casinos.

Senator Deborah O’Neill stressed to witnesses the impact that loopholes in money laundering laws have on homebuyers.

“Australians are going to buy a house this weekend – whether they are going to an auction or in the middle of a transaction to buy a house. Are they competing with people who reap the benefits of crime? Is it a real thing? Ms. O’Neill asked senior executives of the Australian Crime Intelligence Commission.

ACIC Executive Director Robert Jackson said it would be difficult for ACIC to define someone being outbid at an auction by someone looking to launder their ill-gotten gains. “Obviously, criminals are doing their best to obscure and opaque transactions in legitimate purchases. “