Wellington real estate company fails to meet anti-money laundering obligations

The Department of Internal Affairs (DIA) has warned a Wellington real estate company for failing to report suspicious activity on several properties.

The Wellington branch of Mills Gibbon and Co received the warning after failing to meet its anti-money laundering and counter-financing of terrorism (AML/CFT) obligations.

By failing to keep records, not maintaining an AML/CFT programme and not conducting customer due diligence, the business fell short of what the DIA expects of companies.

A statement from the DIA said it was particularly concerned about the failure to report suspicious activity on rental properties.

All real estate companies must report suspicious activity to the police financial intelligence unit. Because the company failed to do this, it must now take action to improve its practices.

The company is not alleged to have been involved in any money laundering or financing of terrorism but must take immediate action to rectify its areas of non-compliance.

Mike Stone, director of AML/CFT at the DIA, said real estate was often used as a means of laundering money and therefore all businesses needed to have robust structures to mitigate the risk of being misused by criminals.

”A compliant real estate sector is essential to prevent, detect and deter criminals from using real estate as a method to clean their dirty money. We need real estate agents to understand the significant role they play in the AML/CFT system and in protecting the integrity of our financial system, and of the real estate industry as a whole.”

Mills Gibbon and Co was issued a formal warning from the DIA in October and has since shown commitment to improving its AML/CFT compliance.

Vita Molyneux is a Wellington-based journalist who covers breaking news and stories from the capital. She has been a journalist since 2018 and joined the Herald in 2021.