Financial crimes in the real estate sector in Austria, Germany, Liechtenstein and Switzerland
| DOI | https://doi.org/10.1108/JMLC-05-2019-0044 |
| Published date | 30 March 2020 |
| Date | 30 March 2020 |
| Pages | 418-432 |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Fabian Maximilian Johannes Teichmann |
Financial crimes in the real estate
sector in Austria, Germany,
Liechtenstein and Switzerland
Fabian Maximilian Johannes Teichmann
Teichmann International AG, St. Gallen, Switzerland
Abstract
Purpose –The purpose of this paper is to demonstratehow criminals commit financial crimes in the real
estate businessin Austria, Germany, Liechtenstein and Switzerland.
Design/methodology/approach –A qualitative content analysis of 100 semi-standardized expert
interviews with both criminalsand prevention experts and a quantitative survey of 200 compliance officers
led to the identificationof specific money laundering techniques in the real estate sector.
Findings –Real estate companies in German-speakingcountries in Europe continue to be extraordinarily
suitable for money laundering and other financial crimes. In particular, they can be used for placement,
layeringand integration, as well as for violations of the tax code. Most importantly, however, they are vehicles
for one of the very few profitable methodsof laundering money.
Research limitations/implications –As the qualitative findings are based on semi-standardized
interviews,they are limited to the perspectives of 100 interviewees.
Practical implications –The identification of gaps in existing anti-money laundering mechanisms is
intended to provide complianceofficers, law enforcement agencies and legislators withvaluable insights into
how criminalsoperate.
Originality/value –While the existing literaturefocuses on organizations combating money laundering
and on improving anti-money laundering measures, this paper describes how money launderers operate to
avoid gettingcaught. Both prevention and criminal perspectives are takeninto account.
Keywords Compliance, Money laundering, Real estate
Paper type Research paper
Introduction
It is often claimed that laundering illegally obtained money is expensive. Nevertheless,
money launderers are often willing to spenda significant portion of their criminal assets on
such activities. Prominent examples include, but are by no means limited to, running
restaurants, bars or nightclubs. With respect to these examples, money launderers pretend
to have more revenue than they actuallyhave and accordingly place the pecuniary proceeds
from illegal activities in legitimate businesses. However, this implies that they need to
maintain a certain infrastructure, which usually has its own associated costs (and effort)
and, ultimately, they have to pay taxeson the money they place in their businesses that act
as fronts for their illegal activities. The laundering costs can easily exceed 30 per cent of the
assets laundered.
Money laundering, however, does not necessarily have to be expensive; indeed, it can
actually be quite profitable. This research paper shows how criminals operate to launder
No external research funding has been received for this study. The author is grateful to Brian Bloch
for his editing of the English.
JMLC
26,2
418
Journalof Money Laundering
Control
Vol.26 No. 2, 2023
pp. 418-432
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-05-2019-0044
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