How criminals are using the Australian property market

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PHOTO: Australian property market

Australians heading to auctions this weekend could be outbid by financial criminals who are using the property market to launder money, an inquiry has been told.

The Senate has been told Australia is a “honey pot destination” for organised crime and its outdated laws are allowing widespread money laundering in the property sector and contributing to inflated house prices.

It is examining the strength of Australia’s money-laundering and counter-terrorism financing laws, which have not undergone a substantial update since they were introduced in 2006.

Representatives from the Australian Criminal Intelligence Commission, Australian Federal Police, Home Affairs and the financial crimes regulator Austrac appeared before the Senate on Wednesday.

Australians at property auctions are bidding against money launderers who are helped by outdated financial crime laws, an inquiry has been told. Picture: NCA NewsWire/Joel Carrett

Stefan Jerga, the head of the AFP criminal assets confiscation taskforce, said “without any histrionics” there were times when potential homebuyers faced off against money launderers.

“Of course there are examples of there not being a level playing field when you have a well-financed organised crime individual bidding against honest hardworking people,” he said.

AFP Deputy Commissioner Ian McCartney said the force had seized $116m worth of property of a total $187m in criminal assets it restrained in the last financial year.

He said Australia was a lucrative market for organised crime because of its high demand for illegal substances.

“We’re a fairly affluent society and we’re prepared to pay a high price. Around the world it’s probably the highest price,” he said.