What are the most common techniques for laundering money through property?

Common techniques include using shell companies and trusts to obscure ownership, structuring deposits below reporting thresholds, using nominee purchasers, purchasing property with cash from overseas, rapid buying and selling to layer funds, and deliberately over or under-valuing properties.

Melbourne's $63 Million Money Laundering Case: What It Means for Australian Real Estate

Q: How common is money laundering through Australian property?

AUSTRAC estimates that billions of dollars in illicit funds flow through Australian real estate annually. Property is consistently identified as one of the highest-risk sectors in Australia's National Risk Assessment, alongside banking and gambling.

Q: Would Tranche 2 have prevented the Liu syndicate case?

Tranche 2 would have made it significantly harder. Under the new regime, real estate agents would be required to verify beneficial ownership of shell companies and trusts, screen against sanctions lists, assess source of funds, and report suspicious activity. The complex structures used in this case would have triggered multiple red flags during CDD.

Key Takeaways

Australian Federal Police charged members of a syndicate with allegedly laundering $63 million through Melbourne property.
The operation reportedly used shell companies, trust structures, and nominee purchasers to obscure the source of funds.
At the time, real estate agents had no AML obligations — no requirement to verify beneficial ownership, screen sanctions lists, or report suspicious activity.
Under Tranche 2 (effective 1 July 2026), the same techniques would trigger multiple CDD red flags that agents must investigate and report.
This case is a key reason Tranche 2 exists — to close the gap that allowed property to be used as a laundering vehicle.

What Happened

In a major operation, the Australian Federal Police (AFP) charged members of a syndicate with allegedly laundering approximately $63 million through Melbourne's property market. According to publicly available court reporting, the operation ran over several years, with the proceeds of crime allegedly channelled into luxury residential properties across Melbourne's inner suburbs.

The syndicate reportedly operated through a network of shell companies and trust structures, using professional facilitators to handle the property purchases. The scale of the operation made it one of the largest property-linked money laundering cases in Australian history.

Note: the individuals charged are entitled to the presumption of innocence. The matters remain before the courts. The details described here are based on publicly available AFP media releases and court reporting.

How the Money Was Allegedly Laundered Through Property

Based on public reporting, the syndicate allegedly used several techniques that are common in property-based money laundering globally:

Alleged techniques

Shell companies — multiple companies were allegedly established with no genuine business purpose, used solely to hold and transfer property. The beneficial owners were obscured behind layers of corporate structure.
Trust structures — discretionary trusts were allegedly used to further obscure beneficial ownership. The trustee, settlor, and beneficiaries were reportedly different individuals, making it difficult to identify who actually controlled the funds.
Nominee purchasers — properties were allegedly purchased in the names of nominees rather than the actual beneficiaries of the laundered funds.
Structured deposits — funds were reportedly structured through multiple accounts and transactions to avoid triggering reporting thresholds at financial institutions.
Professional facilitators — the operation allegedly involved professionals who assisted with the property transactions, providing a veneer of legitimacy to the purchases.

The end result: illicit funds were allegedly converted into legitimate Australian property assets — appreciating in value, generating rental income, and appearing entirely normal from the outside.

Why Traditional Checks Failed

At the time of these alleged offences, real estate agents in Australia had no AML/CTF obligations. None. An agent selling a $5 million property had no legal requirement to:

Verify the buyer's identity beyond what was needed for the contract
Identify the beneficial owner behind a company or trust
Screen the buyer against sanctions or PEP lists
Ask about the source of funds
Report suspicious activity to AUSTRAC

Banks had AML obligations (under Tranche 1), and mortgage lenders would have conducted their own checks. But if a buyer paid cash or used funds already in the banking system, the property transaction itself was unmonitored.

This is the regulatory gap that Tranche 2 is designed to close.

What This Means for Tranche 2 Compliance

Under Tranche 2 (effective 1 July 2026), the same transactions would look very different. Real estate agents would be required to:

Tranche 2 obligations that would apply

Identify the beneficial owner behind every company and trust — not just the person signing the contract
Verify identity using government-issued documents and, where appropriate, biometric verification
Screen against the DFAT Consolidated List and PEP databases at onboarding
Assess the source of funds — where is the money coming from and is it consistent with the buyer's profile?
Apply Enhanced Due Diligence for high-risk situations — complex structures, large cash components, PEP involvement
File a Suspicious Matter Report if any of the above raises a reasonable suspicion of money laundering
Keep records for 7 years — creating an audit trail that AUSTRAC can access

The shell companies, trust structures, and nominee arrangements allegedly used in this case would have triggered multiple CDD requirements and red flags that agents would be legally obligated to investigate.

Red Flags That Should Have Been Caught

Applying the AML red flag framework to this case, multiple warning signs would have been apparent:

Complex ownership structures with no clear commercial purpose
Multiple shell companies purchasing properties in quick succession
Nominee purchasers acting on behalf of undisclosed beneficiaries
Source of funds inconsistent with the purchasers' known income or business activities
Rapid property transactions by the same network of entities
Discretionary trust structures obscuring beneficial ownership (rated high risk by AUSTRAC)

Any one of these would warrant Enhanced Due Diligence under Tranche 2. Multiple red flags in combination would almost certainly trigger an SMR obligation.

How AML Software Would Have Helped

While no software can prevent all financial crime, automated compliance tools would have created friction at every stage of this alleged scheme:

Beneficial ownership checks would have required identifying the real people behind the shell companies and trusts — not just the nominees on the contracts
Sanctions and PEP screening would have flagged any connections to designated persons or politically exposed individuals
CDD workflows for trusts would have required trustee, settlor, appointor, and beneficiary identification — exposing the true ownership structure
Tamper-proof audit trails would have created a record of every check, every screening result, and every decision — making it much harder to claim ignorance
Ongoing monitoring would have flagged patterns of suspicious activity across multiple transactions by related entities

The Bigger Picture: Property and Financial Crime in Australia

This case is not an outlier. AUSTRAC's National Risk Assessment consistently identifies real estate as one of Australia's highest-risk sectors for money laundering. The figures are substantial:

AUSTRAC estimates billions of dollars in illicit funds flow through Australian property annually
Property is used for all three stages of money laundering: placement, layering, and integration
Australia's property market is attractive to foreign criminal enterprises because of its stability, rule of law, and strong property rights
Until Tranche 2, real estate agents were the only major intermediary in property transactions without AML obligations

Tranche 2 doesn't just protect the financial system — it protects agents from being unwitting facilitators of crime. Compliance is about knowing who you're dealing with, so you can focus on the vast majority of clients who are doing the right thing.

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Frequently Asked Questions

How common is money laundering through Australian property?

Very common. AUSTRAC estimates billions of dollars in illicit funds flow through Australian real estate annually. Property is consistently identified as one of the highest-risk sectors in Australia's National Risk Assessment.

Would Tranche 2 have prevented this case?

Tranche 2 would have made it significantly harder. Agents would be required to verify beneficial ownership of shell companies and trusts, screen against sanctions lists, assess source of funds, and report suspicious activity. The complex structures allegedly used would have triggered multiple red flags during CDD.

What are the most common property laundering techniques?

Shell companies and trusts to obscure ownership, nominee purchasers, structuring deposits below thresholds, purchasing with cash from overseas, rapid buy-sell cycles, and deliberately over or under-valuing properties.

Disclaimer: This article is based on publicly available AFP media releases and court reporting. All persons charged are entitled to the presumption of innocence until proven guilty. This article does not constitute legal advice. AMLTranche helps streamline your compliance workflows alongside your professional advisers.

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