High-profile money laundering case exposes ‘huge gaps’ in AML

Some companies may not be applying adequate customer due diligence measures when carrying out estate agency work, it has been suggested.

As you undoubtedly know, almost all businesses, including estate agents, are supervised by HMRC, which took over the regulatory duty in April 2014 from the OFT, for anti-money laundering (AML) purposes, which requires agents to conduct thorough due diligence checks on both the buyers and sellers of properties.

But following the news that a Leeds businessman has been found to be laundering £10m through property deals, Martin Cheek, managing director at anti-money laundering experts SmartSearch, is concerned that there may be major holes in protection against money laundering in the property industry.

He implies that some agents may not be establishing and maintaining appropriate policies and procedures on adequate record-keeping, internal controls or risk assessments, whilst ensuring that relevant employees are trained in how to recognise and deal with transactions and other activities potentially related to money laundering and terrorist financing.

He commented: “The case of Mansoor Mahmood Hussain, known as ‘Manni’, clearly demonstrates the huge gaps in protection against money laundering that exist in the property market, through which criminals are able to pour millions of pounds a year.

“It also highlights, again, that while some may think financial crime is ‘victimless’ because it involves moving cash through property and banks, the reality is that it funds some of the despicable criminal activity in the country.

“That just one man was able to amass such an amount of wealth through illicit property deals shows how widespread the problem is if you multiply that across the number of criminals involved in this activity across the country and the rest of the world. But despite the threat from money laundering criminals being higher than ever before, the fact is it has never been simpler for companies to protect themselves and carry out the most basic checks, electronically, which would stop it at the front door.”