The real estate industry is interesting for criminals who want to launder money and invest in criminal profits. It is difficult to get caught.
The risk exists in industries where large sums of money change hands, says Sara Persson at the Economic Crime Authority.
A top real estate agent in Stockholm is convicted of fraud, accounting offenses, and money laundering for millions of kronor. Real estate is a high-risk industry for money laundering and organized crime, according to the Economic Crime Authority.
Criminals have an increased need for professional money launderers, people who can provide contracts, fabricated pay slips, or assist with bank transactions. But it is difficult to say how big the problem is in the real estate industry – the dark figure is large.
Organized crime has taken itself to a new level, there has been an increased professionalization. Economic crime is extensive, it is a serious development, says Sara Persson, crime prevention specialist at the Economic Crime Authority.
Opportunities exist
The industry organization Swedish Estate Agents' Association and the supervisory authority Real Estate Agent Inspection (FMI) believe that it is unusual for real estate agents to commit economic crimes. Errors in marketing are what lead to most penalties, according to FMI.
But that there are opportunities for those who want to exploit the industry for money laundering is something that Niklas Rollgard, chief lawyer at the Swedish Estate Agents' Association, agrees with.
Real estate agents and real estate companies are subject to the Money Laundering Act and must report any suspicions to the Financial Police.
We work with that all the time and make the assessment that almost all of those we come into contact with want to and do their best to follow the regulations, says Rollgard.
The industry must achieve customer knowledge, i.e., where the money comes from. Anders Astonsson, digital strategist at FMI, believes that it is more common to get penalties for failing to achieve customer knowledge than for actively contributing to money laundering.
It is not common to actively do so, but one or two individuals per year in recent years. We believe it is linked to increased gang criminality.
Guidance
The customer knowledge control consists largely of asking the customer questions. It is often difficult for a real estate agent to know how to evaluate the answers, according to Rollgard:
Real estate agents are not allowed to share the information that comes to light, and it is up to the individual real estate agent to make the assessment. The industry needs more guidance.
The real estate industry has an important role to play in preventing money laundering, according to Sara Persson:
Several industries have very high secrecy around their information. If we see that someone is hiding behind secrecy to exploit the system, then maybe we need to look at this law.
Money laundering through real estate in Sweden involves large sums of money. Transactions in suspicious activity reports related to real estate totaled over 5 billion kronor in 2022.
There are real estate agents and other professional actors in the real estate sector who knowingly assist in money laundering schemes.
The dark figure is estimated to be large regarding the real estate agents themselves.
There are real estate agents relevant from a money laundering perspective who have family ties to key players in criminal networks.
Source: "Professional money launderers," report from the Police Authority
FMI exercises supervision according to the Real Estate Agent Act and the Money Laundering Act.
You must be registered with FMI to practice as a real estate agent. In 2023, there were 7,605 real estate agents. Since 2017, 114 people have had their registration revoked due to decisions by FMI's disciplinary board. 45 cases concern "Payment of annual fee" and 37 concern "Reliability and suitability".
Reliability and suitability assessments are made when new real estate agents are registered. They check if the person has been convicted of certain types of crimes or has debts. Annual checks are also made on crimes and debts among registered agents.
FMI also receives tips from other authorities, banks, or the industry itself about real estate agents or companies that they should take a closer look at.
Source: fmi.se and Anders Astonsson, digital strategist FMI
