Real estate money laundering in Austria, Germany, Liechtenstein and Switzerland
| Date | 02 July 2018 |
| DOI | https://doi.org/10.1108/JMLC-09-2017-0043 |
| Published date | 02 July 2018 |
| Pages | 370-375 |
| Author | Fabian Maximilian Johannes Teichmann |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
Real estate money laundering in
Austria, Germany, Liechtenstein
and Switzerland
Fabian Maximilian Johannes Teichmann
Teichmann International AG, St. Gallen, Switzerland
Abstract
Purpose –The purpose of thispaper is to illustrate how criminals launder money in the realestate business
in Austria,Germany, Liechtenstein and Switzerland.
Design/methodology/approach –A qualitative content analysis of 58 semi-standardized expert
interviews with both criminalsand prevention experts and a quantitative survey of 184 compliance officers
led to the identificationof concrete techniques of money launderingin the real estate sector.
Findings –Real estate companies in German-speakingcountries in Europe continue to be extraordinarily
suitable for money laundering. In particular, they can be used for placement, layering and integration,
combined with violationsof the tax code. Most importantly, however, they are the vehicles for one of the very
few profitablemethods of laundering money.
Research limitations/implications –As the qualitative findings are based on semi-standardized
interviews,these are limited to the 58 interviewees’perspectives.
Practical implications –The identification of gaps in existing anti-money laundering mechanisms is
meant to provide compliance officers, law enforcement agencies and legislators with valuable insights into
how criminalsoperate.
Originality/value –While the existing literaturefocuses on organizations fighting money laundering and
on the improvement of anti-moneylaundering measures, this paper describes how money launderersoperate
to avoid gettingcaught. Both prevention and criminal perspectivesare taken into account.
Keywords Money laundering, Real estate, Compliance
Paper type Research paper
Introduction
It is often claimed that laundering illegally obtained money is expensive. In fact, money
launderers are often willing to spend a significant portion of their incriminated assets on
laundering activities. Prominent examples include, but are by no means limited to,
running restaurants, bars or nightclubs. In these examples, money launderers pretend to
have more revenues than they actually have and, thereby, place pecuniary proceeds from
illegal activities into legitimate businesses. However, this implies that they need to
maintain a certain infrastructure, which usually has its own associated costs, and,
ultimately, they have to pay taxes on the money they place into 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, but can
actually be quite profitable. In fact, this research paper will illustrate how criminals
operate to launder money in the real estate sector in Austria, Germany, Liechtenstein
No external research funding has been received for this study.
JMLC
21,3
370
Journalof Money Laundering
Control
Vol.21 No. 3, 2018
pp. 370-375
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-09-2017-0043
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