As the previous article showed, opacity persists even where transparency frameworks exist. But ownership structures tell only part of the story. Risk is not confined to who owns property, it is shaped by how property is used across the market.

Prime property, prime risk

The purchase of real estate allows for the movement of large amounts of funds all at once in a single transaction as opposed to multiple transactions of smaller values. This concentration of value amplifies risk, particularly where enhanced due diligence is poorly applied or inconsistently enforced. High value residential property therefore remains a persistent target for laundering and wealth concealment, especially when acquired through layered corporate or trust arrangements.

Small property, serious harm

Illicit property use is not confined to luxury assets. Lower value residential properties have been repeatedly linked to terrorism financing, cash‑based laundering, and organised crime. In these cases, scale rather than price creates harm: multiple, modest acquisitions or rentals can be used to generate funds, obscure activity, or provide operational infrastructure for criminal networks.

Lettings: where regulations stop at the front door

Under the UK’s National Risk Assessment, letting activity has historically been assessed as presenting lower money laundering risk. To fall within the scope of the Money Laundering Regulations, rent must exceed a prescribed threshold (€10,000 per month, soon to be £10,000).

This threshold‑based approach has created a structural blind spot. Large volumes of rental activity occur below the regulatory threshold, despite evidence of exploitation. Criminal groups have increasingly used rented properties for large‑scale cannabis cultivation, organised crime accommodation, and other illicit purposes. Recent investigations into rogue letting agents linked to widespread property damage and criminal use underscore how limited scrutiny in this segment can generate significant harm.^[1]The cannabis farm scandal: how a rogue lettings agency destroyed countless homes | Cannabis | The Guardian

Shops, warehouses and wash cycles: commercial property as criminal infrastructure

Walk through almost any UK high street today and a pattern has begun to emerge in plain sight. Prime retail units that once housed banks, clothing chains or bookshops are increasingly occupied by a new mix of businesses: American candy stores^[2]The sour truth of Oxford Street’s candy shop curse | The Standard, vape shops^[3]Barbers and vape stores among 2,700 high street shops raided in money-laundering crackdown | The Independent, barbers, nail bars, phone repair outlets and minimarts. Many appear legitimate. Some are busy. Others, more noticeably, are not.

Commercial property presents a parallel set of risks. High‑street shops, warehouses and light industrial units are frequently exploited by UK‑based organised crime groups associated with drugs, waste crime, modern slavery and human trafficking. These premises can be purchased or rented not only to launder proceeds, but to facilitate further offending, including cash‑intensive businesses that blend illicit funds with legitimate turnover.

Short term lets, long term opacity

Short term letting platforms introduce a further layer of opacity into the property ecosystem. While they are designed to facilitate legitimate, flexible use of residential assets, their structure, high transaction volumes, rapid tenant turnover, and fragmented oversight, can also create opportunities for misuse.

Investigations in the UK have demonstrated how short term letting platforms can be exploited for a range of criminal activity, from properties being used by organised crime groups for purposes such as brothels and drug operations, to wider patterns of fraud and financial misuse facilitated by high transaction volumes and limited oversight^[4]The promise and perils of the sharing economy: The impact of Airbnb lettings on crime – Lanfear – 2024 – Criminology – Wiley Online Library.

The issue is not the platform itself, but the combination of speed, scale and limited verification that allows activities to occur without the continuity of scrutiny typically associated with longer term tenancies or traditional hospitality models. As a result, short term lets can function not only as accommodation, but as a flexible layer within broader financial and criminal networks, further blurring the boundary between property use and financial infrastructure.

Unlike traditional lettings, most short term rental activity falls outside the scope of the UK’s AML framework. This creates a structural gap where property can be transacted and monetised at scale without the level of due diligence expected elsewhere in the real estate sector.

Case studies in hidden ownership

Hidden ownership in UK property rarely arises through a single failure. More commonly, it emerges through the interaction of professional enablers, opaque corporate structures, fragmented oversight, inconsistent due diligence, weak beneficial ownership verification, and delayed regulatory intervention. The result is a system in which property can transition from housing or commercial infrastructure into a mechanism for anonymity, wealth preservation, sanctions circumvention, and the integration of potentially illicit capital into the legitimate economy. The following case studies illustrate how these vulnerabilities have operated in practice within the UK property market.

Case Study 1: The Bangladesh Portfolio – Politically Exposed Wealth Hidden Behind Corporate Structures

One of the clearest recent examples of hidden ownership and politically exposed wealth entering the UK property market emerged through investigations into property acquisitions linked to individuals associated with former Bangladeshi government officials.

A joint investigation by Transparency International UK and The Guardian^[5]Bangladeshis linked to Hasina regime appear to have made UK property transactions in past year | Real estate | The Guardian identified that powerful and politically connected figures, under the previous Sheikh Hasina regime, exploited senior positions to allegedly loot state contracts and the banking system, channelling nearly £400 million into UK property^[6]Investigation finds £400 million worth of UK property owned by Bangladeshi investors accused of corruption | Transparency International UK.

The investigation reportedly uncovered:

• almost 350 UK properties;
• high value homes and luxury apartments across London and Surrey;
• extensive use of UK and offshore corporate structures;
• acquisitions involving politically exposed persons (PEPs) and their associates.

Many of the properties were reportedly held through:

• offshore entities registered in secrecy jurisdictions;
• UK companies with layered ownership arrangements;
• nominee structures; and
• trust arrangements limiting visibility of the ultimate beneficial owner.  

The significance of the case lies not only in the scale of the property portfolio, but in how the ownership structures complicated efforts to identify who ultimately controlled the assets, the origin of the wealth used to acquire them and whether sufficient AML scrutiny had been applied at the point of purchase.

The case also exposed a recurring weakness within the UK property market: politically exposed wealth can enter through apparently legitimate investment channels long before concerns emerge publicly through investigative journalism, geopolitical developments, or overseas corruption investigations.

Subsequent action by the National Crime Agency (NCA) reinforced these concerns. For example, in 2025, the NCA secured freezing orders over significant London property assets linked to the former Bangladeshi minister Saifuzzaman Chowdhury.

These developments illustrate how hidden ownership structures can enable high risk capital to become embedded within UK real estate while limiting transparency precisely at the point where preventive controls are most needed.

Case Study 2: The Azerbaijani Laundromat – Shell Companies, UK Property, and the Globalisation of Dirty Money

The “Azerbaijani Laundromat” remains one of the most significant examples of how opaque corporate structures, weak oversight, and international banking vulnerabilities enabled the movement of billions of dollars of suspicious wealth through the European financial system, with substantial links to the UK. The scheme exposed not only the mechanics of large scale money laundering, but also the role of UK corporate entities and property structures in facilitating the integration of politically exposed wealth into the legitimate economy.

First uncovered in 2017 by the Organized Crime and Corruption Reporting Project (OCCRP) in partnership with multiple international media organisations, the Azerbaijani Laundromat^[7]The Azerbaijani Laundromat | OCCRP involved approximately US$2.9 billion moving through a network of shell companies and bank accounts between 2012 and 2014.

According to the investigation, the laundromat functioned as a money laundering mechanism, political slush fund and a reputational influence operation. It was used by Azerbaijani elites to disguise the origin of funds, purchase luxury assets, influence European political figures and move wealth into apparently legitimate structures.

One of the most significant features of the scheme was the central role played by UK registered entities. The OCCRP investigation identified a small group of UK‑registered limited partnerships at the centre of the laundromat. Although registered in the UK, the beneficial ownership of these entities was obscured through offshore corporate partners based in secrecy jurisdictions including the British Virgin Islands, Belize, the Seychelles and others.

The use of UK limited liability partnerships (LLPs) and Scottish limited partnerships (SLPs) was particularly significant because, at the time they carried the appearance of legitimacy associated with UK incorporation yet allowed substantial opacity regarding beneficial ownership and, as a result, enabled large scale international financial flows.

This combination made UK corporate structures highly attractive vehicles for laundering suspicious funds.

Luxury Property and Wealth Integration

The wider Azerbaijani Laundromat investigations later exposed links between politically connected Azerbaijani wealth and substantial UK property holdings. Subsequent OCCRP reporting identified luxury London property connected to members and associates of Azerbaijani President Ilham Aliyev’s family, much of it hidden behind offshore trusts and opaque ownership structures^[8]Azerbaijan’s Ruling Aliyev Family and Their Associates Acquired Dozens of Prime London Properties Worth Nearly $700 Million | OCCRP.

The investigations reinforced a recurring pattern within UK property related financial crime:

• politically exposed wealth enters the UK through layered corporate structures;
• luxury real estate is acquired as a stable store of value;
• ownership visibility becomes fragmented; and,
• regulatory intervention often occurs years later.

In one particularly high profile matter, London based DJ Mikaela Jav (Izzat Khanim Javadova), a cousin of President Aliyev and her husband, agreed to forfeit more than £4 million linked to funds associated with the Azerbaijani Laundromat^[9]Azerbaijani Couple, Including President’s Cousin, Owns Properties Worth Millions in London and Ibiza | OCCRP following National Crime Agency action^[10]Azeri elite agrees to hand over £4 million.

In another case, UK authorities moved to freeze bank accounts and later multiple London properties linked to Azerbaijani politician Javanshir Feyziyev and his family following allegations that assets were connected to laundromat funds^[11]UK Freezes Azerbaijani Lawmaker’s £39m Properties | OCCRP.

These examples illustrated how property can become the final integration stage for suspicious wealth, transforming opaque international financial flows into apparently legitimate and legally protected assets. However, recognising risk does not equate to controlling it. Despite a growing evidence base and increasingly visible misuse, the UK’s response has remained patchy.

The final article examines how enforcement operates in practice and why it so often arrives too late to prevent harm.

About the authors

Priya Giuliani is a specialist in financial crime investigations and compliance, with 30 years’ experience, including a decade as a Partner. She advises clients proactively on assessing and managing financial crime risk, with a focus on governance, oversight, conduct, and the training of Senior Managers and Boards.

Her investigative experience provides deep insight into how financial crime, such as money laundering, terrorist and proliferation financing, sanctions breaches, tax evasion, bribery, corruption, and fraud, can occur, including through the use of professional enablers. She is highly experienced in designing and evaluating the control frameworks required to manage these risks effectively. Priya has also been appointed on numerous Skilled Person engagements.

Widely regarded as a highly experienced and well-qualified expert in financial crime risk management and investigations, she works closely with clients to develop proportionate and effective control frameworks.

Priya has led dozens of investigations alongside law enforcement agencies into the laundering of proceeds of crime derived from drug trafficking, human trafficking, and carousel fraud through UK and international property markets. She has also investigated how property investment and lettings companies, particularly those with large portfolios of low value, high volume housing stock, have been used to generate funds to support terrorist activity.

Leanard Phillip is a senior governance and financial crime compliance specialist, MLRO, and regulatory adviser with extensive experience across the banking, UK real estate, and fintech sectors. He is the Founder and Executive Director of Optimum Compliance Consultancy Limited and has advised firms on anti-money laundering (AML), counter-terrorist financing (CTF), sanctions compliance, regulatory risk management, and governance frameworks.

Leanard has held senior financial crime leadership roles within major international organisations, including responsibility for AML and sanctions oversight within the UK property sector. He has also led and supported a number of Financial Services and Markets Act (FSMA) skilled person reviews, remediation programmes, and financial crime transformation projects across financial institutions within the City of London.

He is particularly recognised for his recent work on financial crime risk within real estate, including sanctions exposure, beneficial ownership transparency, unexplained wealth orders, and the misuse of UK property for money laundering and organised crime. Leanard regularly contributes to industry discussions on economic crime, regulatory reform, and the intersection between illicit finance and wider social and economic harm.

In addition to his advisory work, Leanard serves as a mentor, trainer, and speaker on AML, sanctions, and financial crime compliance matters both in the UK and internationally.

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