Sentry Report: Money-Launderers Target Real Estate in Sub-Saharan Africa

New Report by The Sentry:

African Real Estate Targeted as “Hot New Trend for Money-Launderers”
Illicit Finance Experts Raise Red Flags for Properties in Capitals and Top Cities of South Africa, Uganda, Namibia, and Kenya

 

July 8, 2020 (Washington, D.C.) – The purchase of real estate in Africa has become a preferred method for money laundering by corrupt leaders and government officials, warns a report published today by The Sentry. Real estate sectors cited for serious money-laundering risks include capitals and major cities in Kenya, Namibia, Uganda, and South Africa.

Banks, governments, and regional and international organizations, meanwhile, have not kept up with the rising risk, as loopholes in the real estate sector amount to an “unregulated backdoor” to the global financial system, according to the report. The Sentry, an investigative and policy team co-founded by John Prendergast and George Clooney, in previous reports has exposed unexplained wealth and luxury real estate holdings linked to generals, top government officials, and even heads of state such as the president and former vice president of South Sudan.

Hilary Mossberg, Director of Illicit Finance Policy at The Sentry, said: “While purchases of luxury properties from Malibu to Monaco make international headlines, the hot new trend for money-laundering kleptocrats in Africa has become real estate in their own backyard. The good news is we now have the investigative, regulatory, and policy tools to disrupt this looting scheme.”

In particular, The Sentry’s new report raises red flags for countries suffering from war and conflict, as kleptocrats and their business networks are increasingly acquiring real estate in major African cities to hide the proceeds of grand corruption.

John Prendergast, Co-Founder of The Sentry, said: “African real estate is increasingly the getaway car for the proceeds of grand corruption.  Billions of dollars have been stolen from countries where corrupt leaders loot resources intended for health care, infrastructure, and natural resource development, and use extreme violence and repression to undermine the rule of law and maintain the exploitative status quo.”

Selected report highlights:

• Significant vulnerabilities with respect to the real estate sectors exist in Uganda, Kenya, Namibia, and South Africa. Cities spotlighted include Nairobi, Kampala, Windhoek, Cape Town, and Johannesburg.
• Real estate purchases can face comparatively less scrutiny than traditional financial sector transactions. As a result, money launderers can often use real estate to conceal funds, particularly by making cash payments using shell companies to obscure the identity of the property’s ultimate purchaser.
• Lack of standardized oversight in designated non-financial businesses and professions, including real estate agents and title deed providers, provides access to the global financial system.
• In eastern and southern Africa, barriers to acquiring data about the real estate sector may undermine anti-money laundering controls.
• Money laundering vulnerabilities in the real estate sector could be reduced through increased information sharing and cooperation among regulators in southern and eastern Africa and in the United States and Europe.
• Increased collaboration between regulators and civil society groups in eastern and southern Africa and the United States could help close long-exploited loopholes.

Read the full report, “Looted Funds Used to Buy African Real Estate”: https://thesentry.org/reports/looted-funds/

For media inquiries or interview requests, please contact: Greg Hittelman, Director of Communications, +1 310 717 0606, [email protected]

ABOUT THE SENTRY

The Sentry is an investigative and policy team that follows the dirty money connected to African war criminals and transnational war profiteers and seeks to shut those benefiting from violence out of the international financial system. By disrupting the cost-benefit calculations of those who hijack governments for self-enrichment in East and Central Africa, the deadliest war zone globally since World War II, we seek to counter the main drivers of conflict and create new leverage for peace, human rights, and good governance. The Sentry is composed of financial investigators, international human rights lawyers, and regional experts, as well as former law enforcement agents, intelligence officers, policymakers, investigative journalists, and banking professionals. Co-founded by George Clooney and John Prendergast, The Sentry is a flagship initiative and strategic partner of the Clooney Foundation for Justice.

Learn more at www.TheSentry.org.