...
By Trisha Rovelli
Founder of Vedanta Advisory
0
Share
Newsweek is a Trust Project member
See more of our trusted coverage when you search.Prefer Newsweek on Googleto see more of our trusted coverage when you search.
For years the U.K. promised to clamp down on dirty money, prioritizing regulatory reform and investment in parts of its criminal justice system. On paper, it has one of the strongest financial-crime regimes in the West. So why is it still an attractive destination for hiding dirty money? The answer lies in the porous oversight of its highest-risk sector, the property market.
Transparency International (TI) called the U.K.’s property market “a home for corrupt money” in 2015. More than a decade later, an estimated £10 billion is laundered through it each year. In the past six months alone, authorities have frozen high-value properties, including some bought as recently as 2023, owned by an international fraud boss, politically connected elites and a laundering‑network affiliate. These actions signal U.K.’s readiness to intervene but raise an uncomfortable question: Why is the property market still so easy to exploit?
...
Read More on Opinion
One structural weakness is the treatment of property developers. They handle some of the largest inflows of foreign capital, and despite warnings, still remain outside U.K.’s anti-money laundering (AML) remit. Current rules focus on real estate agents, who must vet home buyers and report suspicious activity. Developers, who often sell off-plan and in bulk to foreign buyers from high-risk jurisdictions, do not. This allows purchasing early-stage builds to be used to offload illicit capital with little scrutiny, especially if the buyer is a trust or company.
Ironically, the professional services, or professional enablers, orbiting these deals are regulated. Professional enablers are individuals or organizations that either deliberately or negligently provide professional services, including legal, accounting, trust and company formation and payment services, that enable criminality. They understand how to exploit regulatory loopholes in real estate transparency and asset provenance.
Lawyers in particular are central to company and trust formation, property conveyancing and high-stakes financial transactions behind the U.K.’s most expensive property deals. Yet, compared to their risk exposure, they file a tiny fraction of suspicious activity reports. Watchdogs have warned about this mismatch between risk and reporting for years. Legal professional privilege, often cited as a reason for not reporting, has potential to be misused. This is at odds with duty-to-report ethos of anti-money laundering.
Fragmented oversight also undermines enforcement. More than 20 different supervisors with inconsistent enforcement standards, a structural weakness the Treasury acknowledged, oversee professional services. In late 2025, Treasury announced the Financial Conduct Authority (FCA) would assume responsibility for AML supervision across professional services. But the change is still subject to parliamentary timing and transition could take up to three years, leaving time for professional enablers to continue business as usual.
Exploitation of these loopholes is not speculative. In 2022, TI estimated £1.5 billion worth of property in the U.K. was bought by Russians accused of corruption or links to the Kremlin. More than half were held by companies in British Overseas Territories and crown dependencies, jurisdictions used to hide true beneficial ownership. Chen Zhi, head of a £46 billion international fraud enterprise and sanctioned late last year, registered companies in the Cayman and British Virgin Islands, both known for corporate secrecy, and used them to purchase properties in London totaling £180 million, 17 of which were off-plan apartment units worth approximately £26 million.
This is not a new play. At least 12 of the 13 upscale London properties traced to Ali Ansari, an Iranian banker recently sanctioned for corruption and funding Islamic Revolutionary Guard Corps activities, were registered to an entity he owned and formed in the Isle of Man. Bloomberg recently reported that Mojtaba Khamenei, the son of Iran’s supreme leader, owns multiple mansions on Billionaire Row in North London, though he refrained from putting the assets in his name; instead, they traced back to Ansari. Despite being under one of the world’s strictest sanctions regimes, Iran’s ruling elite can still move wealth abroad years before anyone notices.
But not all illicit wealth hides behind offshore shell companies. Binghai Su, linked to a major money laundering investigation in Singapore, formed Su Empire Ltd. in the U.K. using a passport acquired from a citizenship‑by‑investment program in St. Kitts. Su Empire then acquired nine luxury London apartments worth £15.8 million.
These are predictable outcomes. Criminal networks and sanctioned elites bank on systemic weaknesses in the U.K.’s AML oversight. But the U.K. is in the driver’s seat. Greater use of a powerful yet underused tool, the Unexplained Wealth Order, would shift the burden onto those looking to unload suspicious wealth into U.K. properties. Professional services should preempt consolidated supervision by reassessing their risk exposure and preparing for uniform reporting obligations, mandatory audits and non-compliance penalties. And bringing developers that sell off-plan properties to foreign investors into the regulatory perimeter must be on table. Until then, the U.K.’s property market will remain one of the easiest places to hide dirty money.
Trisha Rovelli, MBA, CFE, CAMS, is an independent consultant and founder of Vedanta Advisory, a governance advisory firm focusing on risk management, compliance and platform safety. She has over 13 years of experience in advising government agencies and financial institutions, and serves on the Editorial Advisory Committee for Fraud Magazine*.*
The views expressed in this article are the writer's own.
View 0 Comments
Submit Correction
View Editorial & AI Guidelines