Forged financial histories let criminals launder hot cash over longer timeframe
Published 04/10/2016 | 02:30
Getting approved for a mortgage is impossible for people whose earnings are illegal.
They deal in cash. This is money that is obtained illegally, is not taxed and is hard for them to store.
These criminals do not have bank accounts, are not members of credit unions, do not have debit cards and are unlikely to use cheques. They are not part of the formal financial system.
They steal, deal in drugs and swindle people. All of this gives them access to vast quantities of cash, but they have limited options for where they can put this.
If they put big amounts of cash in notes into a bank or credit union account, it will immediately trigger suspicions. Money-laundering regulations are strict, forcing banks to be on the look-out for any attempt to conceal the origins of illegally earned money and put it into a bank.
So another option is to obtain a mortgage.
To get approved for a mortgage, banks want to see a suitable financial record. To achieve this, illicit cash-earning criminals have come up with a sophisticated forgery operation.
They create fictitious personal financial histories. This is done by taking legitimate bank statements and replicating them with the name of the criminal who wants the mortgage.
High-quality printers are used to create these documents, replete with bank logos. And they look genuine, with the codes of various transactions used by banks replicated to make the bank statements look and feel like the real thing.
False payslips have also been created. These documents create a false financial identity. They are used to satisfy the mortgage lender that the house buyer is an ordinary worker, with an income, a bank account and a savings history.
Some of the money for a deposit may even have been put into real bank accounts over a period of time.
Having a mortgage is a way for criminals to launder money earned from crime over a longer timeframe - maybe the 20 to 30 years of the term of a mortgage. This is because the criminals can pay the mortgage in cash every month, helping them launder their dirty money on an ongoing basis.