Dirty money’s hiding spots: How corruption funds disappear overseas

Imagine billions of dollars siphoned from public funds – money meant to build schools, hospitals and infrastructure – vanishing into a web of offshore accounts, luxury real estate and shell companies. This isn’t fiction; it’s the stark reality of how corruption drains resources from Africa and other regions, leaving people to bear the cost.

In our deep-dive analysis of 78 cases, using data available from court records, leaked information, investigative reports and other public sources, we followed the money trail to uncover not only where stolen or hidden funds from Africa end up, but also the mechanisms and tools used to hide them. Our analysis is based on cases of corruption confirmed by court decisions, as well as credible allegations of corruption and hiding of wealth offshore.

Our findings reveal the destinations, methods and assets most commonly used by corrupt actors to launder stolen money. They also highlight the urgent need for action to close these loopholes.

Our research reveals a staggering network of companies, properties, bank accounts and luxury goods – a total of 375 assets worth at least US$3.7 billion, spread across 74 jurisdictions. This figure likely represents the tip of the iceberg, as it only includes assets identifiable through public sources.

Notably, close to 80 per cent of assets were held abroad, often far from where the corruption originally occurred. We found:

• Companies: The British Virgin Islands (BVI), Panama and Seychelles emerged as top incorporation hubs for anonymous companies used to conceal assets and stolen funds.
• Real estate: France, the United Kingdom (UK), the United Arab Emirates (UAE) and the United States (US) were the preferred locations for purchasing properties connected to suspicious activities.
• Bank accounts: Hong Kong, Switzerland, the UK, the UAE and the US appear as key destinations for bank accounts used to pay bribes, move or store dirty funds.

Detailed information on bank accounts was limited to just 43 of the 78 cases, suggesting the actual number of accounts involved is much higher. Yet, the findings illustrate the size of the challenge, especially when major financial hubs fail to implement effective anti-money laundering measures. For instance, Swiss regulators reported in 2023 that 50 per cent of banks inspected had "largely unsatisfactory" anti-money laundering systems.

If companies are the preferred tool for anonymity, real estate ranks among the top choices for laundering stolen funds. In one-third of the cases we analysed, properties played a central role.

We identified 121 properties worth at least US$560 million, with most located abroad and often owned via companies or trusts.

Popular destinations like France, the UK and the US stand out, among other things, due to regulatory loopholes. In the UK, ownership of real estate can still be hidden through offshore companies held by trusts, bypassing recent transparency reforms. In France, foreign companies can purchase real estate without declaring their true owners, a gap that the EU's 6th Anti-Money Laundering Directive aims to close. In the US, non-financial enablers dealing in real estate are not required to do customer due diligence nor file suspicious transaction reports.

US properties topped the group in value, with luxury villas and apartments reaching US$178 million. New York attracted the most suspicious real estate purchases with seven properties in the state linked to the cases, followed by Maryland (5), California (3), and Florida (3).

Dirty money entered the US real estate market in a variety of ways, some more sophisticated than others. A Nigerian businessman accused of corruption hid his US$25 million mansion behind intricate layers of shell companies registered in the United States and the BVI. Meanwhile, the cousin of a former Gabonese president allegedly purchased three homes in the suburbs of Washington, D.C. with US$1 million in cash. In total, at least six properties were owned using US-based companies to obscure ownership, while Cypriot, Mozambican and Nigerian companies were also used. Toppled Gambian dictator Yahya Jammeh also tried to conceal ownership of a Potomac mansion behind a trust.

We found that companies incorporated in the Seychelles, the BVI, and the US were among the most frequently used to hold the identified properties. While companies from the BVI and Seychelles were primarily used to own real estate abroad, US-based companies were almost exclusively used to hold properties within the US.

We also analysed how payments to acquire properties were made and traced the origin of funds. In a few cases, properties were purchased using funds directly transferred from the country of origin or in physical cash. These transactions raised clear and obvious red flags – for example, the transfer of US$1 million from a Gambian bank to purchase a luxury home under a trust controlled by former Gambian President Yahya Jammeh, or a Gabonese politically exposed person (PEP) reportedly buying three properties with US$1 million in cash. Despite these red flags, such transactions appear to have gone unnoticed or unchecked.

However, the most common method was purchasing properties using funds already held in local bank accounts. Payments from local accounts are less likely to raise suspicions, as those involved in the transaction often assume the bank has already verified the source of the funds. Once corrupt actors successfully transfer stolen money into a country without proper scrutiny, buying property becomes a relatively low-risk way to integrate it.

Cases analysed reveal how PEPs use anonymous companies and trusts to further their own business interests, using companies and trusts incorporated in secrecy jurisdictions to hide their ownership of operational companies. These are companies with legitimate business, often operating in their home countries, with which they do not wish to be associated. This approach serves multiple purposes; for example, it can help hide possible conflicts of interest or facilitate corruption schemes. Companies secretly controlled by PEPs can secure government contracts, obtain lucrative natural resource licenses and concessions, or be used to receive bribes. In some cases, the transfer of shares in an operational company could even represent the bribe itself.

In Angola, for instance, businessman Carlos São Vicente used offshore companies to divert public funds while serving as CEO of AAA Seguros S.A., a partially state-owned insurance company. His wife, Irene Alexandra da Silva Neto, had previously served as vice-minister under President José Eduardo dos Santos. AAA Seguros held a government-granted monopoly on insuring oil sector activities and was partially owned by the state oil company, Sonangol. São Vicente secretly acquired nearly 88 per cent ownership of AAA Seguros through a network of companies registered in Bermuda, known as the AAA Group. He then arranged for AAA Seguros to pay inflated prices for reinsurance contracts to these offshore companies. The excess money was funnelled into São Vicente’s personal bank accounts in countries like Switzerland and Singapore.

In some cases, corrupt actors acquire operational companies as a direct result of corruption. These companies then serve as both a vehicle for laundering funds and a source of financial gain.

For example, Isabel dos Santos, the daughter of Angola's former president, corruptly obtained a 40 per cent stake in a holding company that owned Portuguese energy firm Galp, according to a report from a court-appointed director of Esperaza Holding BV. She manipulated the sale of the shares in the company from Angolan state-oil company Sonangol to a Dutch company owned by her husband, a Dutch court ruled. Isabel dos Santos has denied any wrongdoing. In 2021, the stake in Galp was reportedly worth around US$500 million.

Our findings highlight how major financial hubs, secrecy jurisdictions and weak regulatory frameworks enable corrupt actors to hide and grow their wealth, to the detriment of Africans and societies across the globe. To effectively combat cross-border corruption and the laundering of stolen funds, governments, professionals in the financial and non-financial sectors, and international bodies must take urgent action.

1. Enhance transparency in asset ownership

• Countries should require all assets, including legal entities, bank accounts, properties, art, vehicles and yachts, to be registered with a government authority. Information on assets should be available to competent authorities, such as law enforcement, tax authorities and financial intelligence units, which would increase the ability of authorities to detect stolen assets.
• Countries should ensure that registers of legal entities, trusts, properties and luxury goods are available to journalists and civil society free of charge, so they can exercise their oversight functions. Information on these assets should also be made available to the public.
• Beneficial ownership registers should be established with urgency in countries where they are lacking. All jurisdictions should ensure such registers contain verified and interoperable information, enabling ownership data to be cross-checked against other asset registers to identify the real owners of assets owned through legal entities and arrangements.
• In countries where assets can be purchased through offshore companies or trusts, information on the real owners of these companies or trusts – and consequently of the assets – needs to be recorded and disclosed in the country where the asset is located.
• Jurisdictions that are in the process of establishing legitimate interest-based access to beneficial ownership registers, including EU member states and British Overseas Territories, should guarantee easy and free access for journalists and civil society organisations to the whole register (and not on a case-by-case basis). This will recognise their role in preventing and tackling money laundering and associated offences.

2. Regulate and supervise enablers of corruption

• Governments should subject all professionals in the financial and non-financial sectors, whose services are crucial to the corrupt concealment of assets, to anti-money laundering rules. This must include all financial institutions as well as professionals involved in real estate transactions, creation and administration of companies and trusts, as well as storing, moving and transferring of funds. Such intermediaries should be required to identify beneficial owners of their legal entity clients, conduct due diligence and submit suspicious transactions to an independent financial intelligence unit.
  
• Gatekeeper professions need to be closely supervised. The level of scrutiny and focus on specific activities or sectors should be informed by risk. Adequate on- and off-site inspections should be conducted regularly by an independent supervisory body, with a focus on effectiveness rather than simple compliance with the rules.
• Those who are found to have enabled money laundering should face serious repercussions, including loss of licence as well as administrative and criminal sanctions, as appropriate.

3. Strengthen mechanisms for tracing, seizing, confiscating and returning assets

• Countries should ensure that data on assets is used to inform risk, identify gaps in legislation and inform supervisory and enforcement efforts.
  
• Countries should systematically analyse asset data to identify risk patterns and develop red flag indicators. These indicators should be used to pinpoint high-risk areas as well as cases that should be referred for investigation.
• Countries should substantially increase the resourcing of financial intelligence units to adequately perform their analytical and intelligence-sharing functions to increase the likelihood of suspicious transactions or purchases being detected early on. Financial intelligence units should have access to a broad range of asset ownership data that can be proactively used, in combination with information contained in suspicious transaction reports, to produce intelligence reports for law enforcement authorities.
• Financial intelligence units and other relevant competent authorities should also exchange intelligence and collaborate with counterparts in other countries implicated by the cases.
• Countries should have in place and utilise civil and criminal mechanisms to seize and confiscate assets – including, for example, unexplained wealth orders or non-conviction-based forfeiture.
• Countries should strengthen efforts to confiscate stolen assets and repatriate funds to the benefit of victims of corruption.