Money Laundering “Red Flags”

Questions to ask and

Things to be alert and mindful of….

• Beneficial owners are in the “background” and you are, or should be, aware
• Buyer and property are a mis-match
• Buyer’s agent responses do not meet your due diligence requirements
• Buyer’s income is inadequate to pay an 80% financed deal
• Cash Deal? (remember: if there is a mortgage the lender always asks for a AML letter)
• Client asks to use a Third Person nominee
• Client is vague and reluctant to reveal the “person of interest” in the transaction
• Deposits come from more than three banks
• Income sources go back less than three years
• Know Your Client: it’s the law!
• Money Broker is involved
• Money coming in from three sources and/or payment amounts (in dollars) are similar
• Money instruments are used for any cost or payment
• Non customary agents, payees, or persons appear on or at the closing
• Notarized documents are not U.S.A. in origin
• Off record payments or things of value are exchanged between parties
• Payments of any kind are from more than three individuals or sources
• Purchase is made without viewing the property or without inspection
• Re-sold at the closing
• Residential property is titled in a third person party
• Rushed purchases or rushed sales
• Sale price is high or low by a significant amount or percentage
• SAR? Know what it is and who can and does make them…
• Structuring? Be familiar with what structuring can look like
• Third party names appear on monetary instruments
• Transaction costs are unusual and the buyer doesn’t care
• Trust but verify
• Trust is the buyer and the Trustee is a non-U.S.A. resident
• Vague or minimal information about a party participating in the transaction
• Willful Blindness? Know what it is…..
• Witnesses on documents are not U.S.A. residents