The purchase of real estate with cash is one of the most used ways to practice money laundering – an operation carried out with the objective of placing illicitly obtained resources on the legal market. It should be noted, however, that it is not a crime to buy a property with cash.
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“Two crimes are involved in money laundering. One is what made illicit money possible, and the second is this placement (of resources) in the formal market”, says Fabiano Angélico, a researcher at the University of Lugano, Switzerland, and a doctoral candidate in public administration by Fundação Getúlio Vargas.
Suspicions arise in the scenario in which there is a large amount of real estate traded in cash. This Tuesday (30), a report published by the UOL portal showed that at least 51 properties owned by President Jair Bolsonaro (PL) and his family were purchased with cash. According to UOL, the report raised, over seven months, the records in notaries of real estate negotiations made by Bolsonaro, his children and other relatives.
The survey identified transactions of 107 properties from 1990 until now. In 51 of them, the notary’s records indicate payment in “national currency”, a formal term used for cash transactions. When questioned, the president replied: “What’s the problem, buying some property with cash?” (see more in the video below).
‘What’s the problem, buying a property with cash?’, asks Bolsonaro
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What encourages money laundering
The practice of laundering money in real estate is common in several countries. And in Brazil there are three major factors that encourage this practice.
- Information failed. The real estate industry does not produce all the necessary information involving real estate negotiations. This data should be sent to the Financial Activities Control Council (Coaf). The agency is a financial intelligence unit of the federal government that acts precisely in preventing and combating money laundering.
“The companies, the private sector, produce these reports. However, in Brazil and in several parts of the world, the real estate sector is known for not providing adequate and complete reports”, says Angélico.
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Coaf only works on demand, that is, it has no police power. What would change this scenario is a greater awareness of the private sector that it is their role to pass on the necessary and complete information about the sector’s transactions.
“It is necessary to have training, a code of ethics. It is necessary that the sector itself create a form with complete and not summarized information”, says the researcher from the University of Lugano.
- There are drawer contracts. The registration of purchase and sale of real estate is public, but Brazil tolerates the so-called drawer contracts – when the negotiation is done directly between those who want to sell and buy the good.
“This creates confusion, which is good for criminality, because it becomes more difficult to investigate”, says Angélico.
- The price is subjective. There is no clarity in the prices of real estate traded in Brazil. They are fluctuating, which makes the value of real estate subjective, also contributing to making any investigation even more difficult.
“A criminal commits a crime, a corrupt person takes money for what? It’s not to put under the mattress. It’s to enjoy”, says Angélico. “And the main way to make good use of money is to live in a good house. This is something attractive for the criminal. He seeks social ascension”, says the expert.
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