The police: Criminals manipulate the mortgage market

Published 22 October 2024 at 15.41

Economics. For several years, the financial police have drawn attention to the fact that criminals use the proceeds of crime to pay for housing or to finance large bank loans. This often happens through falsified documents prepared by actors who, through their professional role, enable the crime.

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– For several years, we have informed lenders to be aware of customers whose loan documents are made up or where the investment consists of money earned through crime, says Lena Palmklint, head of the financial police.

Real estate agents and bank officials belong to industries that are obliged to report suspected money laundering to the financial police. However, the financial police receives relatively few reports from estate agents and it is usually the banking sector that raises the alarm about suspicious housing purchases.

– The reporting from the banks, together with other information we have, shows that the problem is widespread and that many real estate agents and other actors who assist in loan brokerage participate in money laundering – either knowingly or due to a lack of controls, says Lena Palmklint on the police's website.

It also happens that bank officials grant mortgages on incorrect grounds and thereby become complicit in money laundering.

When large bank loans are granted on false grounds, it leads both to network criminals being able to launder large criminal profits through ostensibly legitimate housing deals and to professional money launderers making large sums of money. It also risks manipulating pricing in the housing market, if final prices are rigged up with fraud as a basis.

– The pressure on this type of enabler, who assists with false documents and approving them, is increasing from criminal environments. Therefore, there is every reason for both banks, authorities and private actors to carry out careful checks, says Lena Palmklint.

At the end of June this year, a real estate agent and his business partner who was also a co-founder of the real estate agency company were sentenced in the district court to 4.5 years and 3.5 years in prison respectively for serious fraud, serious business money laundering and serious accounting offences. Their company also received a corporate fine of five million kroner and the brokers were each banned from trading for five years. Two women who were involved in the deals were sentenced to two years in prison and a suspended sentence respectively.

The case is the result of intelligence work by the financial police and the Ecocrime Authority's police operative unit.

Both real estate agents were convicted against their denial and has appealed the verdict.

– I have appealed and, among other things, requested that the Court of Appeals should sentence the two representatives of the real estate brokerage company to stricter penalties and longer business bans, says Linda Johansson, preliminary investigation leader and chamber prosecutor at the Ecocrime Authority in Stockholm.

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