Illicit Funds Funnelled into US Commercial Real Estate: GFI Report Highlights Money Laundering Risks

Illicit Funds from 14 Countries Funneled into US Property Sector: GFI Report Exposes Money Laundering Risks

Abuja, Nigeria – A new report by Global Financial Integrity (GFI) has revealed the alarming trend of illicit funds from 14 different countries being funneled into the commercial property sector in the United States, totaling over $2.6 billion in investments over the past two decades.

The report, titled ‘Money Laundering Risks in Commercial Real Estate: An Analysis of 25 Case Studies’, identified California, Florida, and New York as popular locations for these illegal investments, with criminals using various types of properties including hotels, shopping malls, supermarkets, and even a music studio and an equestrian facility.

While Nigeria was not specifically mentioned in the report, the country has been a major destination for illicit funds by politically exposed individuals, with ongoing efforts by the government to repatriate stolen funds. Just recently, the Federal Government called on the US to return more Nigerian funds looted by public officials and stashed in banks in the country.

The report also highlighted the involvement of foreign government officials and oligarchs in the illicit investments, with Russian oligarchs, in particular, using US commercial real estate to circumvent international sanctions. Additionally, the report emphasized the lack of transparency and reporting requirements in the real estate sector, making it easier for criminals to launder large sums of cash with low detection risk.

In response to the findings, the report recommended that the Financial Crimes Enforcement Network (FinCEN) adopt stricter reporting obligations for real estate professionals involved in transactions, including attorneys and trusts. This, the report argues, will help curb the flow of illicit funds into the US property market and enhance transparency in the sector.

As the debate over illicit financial flows continues, the GFI report serves as a stark reminder of the need for stronger regulatory measures to prevent money laundering through commercial real estate investments. With the global spotlight on financial crimes intensifying, the onus is now on governments and financial institutions to take decisive action against those seeking to exploit the loopholes in the system for their illicit gains.