Reported by BRETT ERICKSON

(Excerpt shared below. To read full report, go to: https://thehill.com/opinion/finance/5575054-us-real-estate-money-laundering/amp/)

The latest investigation from the Organized Crime and Corruption Reporting Project landed like a quiet indictment of Washington’s complacency. 

Reporters traced over $100 million in U.S. real estate to the sons of Iraqi-Kurdish leader Masoud Barzani. The properties were held through shell companies named after Pirates of the Caribbean characters, financed by offshore accounts and serviced by a Delaware lawyer who paid household bills and luxury purchases through “administrative” accounts. 

No one has been charged with a crime — and that is the point. Because every element of the scheme — lawyers forming entities, trusts masking ownership, cash real-estate deals with no financing — largely falls outside U.S. anti-money-laundering law. 

The U.S. still exempts lawyers, accountants and real-estate professionals from the Bank Secrecy Act. They are not required to identify clients, monitor transactions or file suspicious-activity reports. They can move millions through limited-liability companies, administer offshore trusts or close cash real-estate deals, all while remaining invisible to regulators. 

This isn’t an oversight. It’s deliberate. Every Financial Action Task Force evaluation since 2006 has flagged this as a major deficiency. Nothing has changed. 

So while the world’s largest economy lectures others on transparency, it still allows foreign political elites to buy U.S. property anonymously, with lawyers and title agents acting as intermediaries who bear no substantial anti-money laundering obligations. That’s exactly how the Barzani purchases happened. The U.S. didn’t miss them — it just never required anyone to look. 

Across the Pacific, regulators are moving the opposite direction. In a recent conversation, Australian Transaction Reports and Analysis Center CEO Brendan Thomas told me, “Strengthening oversight of professional service sectors — including lawyers, accountants and real estate professionals — is a major priority for Australia. These sectors are being actively exploited by organized crime, particularly in the real estate market. Without regulatory control, the risks only grow.”  

Australia’s tranche 2 reforms will finally bring lawyers, accountants and real-estate agents under anti-money laundering supervision. It took years of debate, but the rationale is simple: These are the gatekeepers, the professionals who open access to the financial system. When they’re unregulated, organized crime and foreign kleptocrats exploit them.