Narcos on the front line: How drug cartels are raising Australian house prices

Cartels are now laundering billions through Australian properties, leaving mum and dad investors to “bid against crims”. See how in our new episode of Narcos on the front line.

Exclusive: Criminal cartels paying cash for commercial properties and empty apartments are corrupting Australia’s property market.

Police have revealed significant concerns about the criminals laundering hundreds of millions of dollars through property purchases.

Criminals are buying commercial properties as a safe asset for their illegal cash, but then using the rental income as a way to justify some of their dodgy dollars.

High-rise apartments have been particularly vulnerable, with criminals simply leaving them empty.

And mums and dads trying to get into a family home “can be bidding against criminals,” police say.

Drug money made up some of the $122 billion of properties paid for in cash last year in Australia.

Skyrocketing real estate property prices are also affected by crims washing their cash.

Watch episode 4 of the Narcos on the front line series above.

“What we’ve seen on the back of operations is that TSOC (Transnational Organised Crime) groups of specifically Money Laundering Operations, they’re investing their profits in property in order to establish a sense of legitimacy in terms of the lifestyle they were living,” Detective Superintendent Craig Bellis of the Australian Federal Police’s money laundering division said.

“Buying a number of commercial properties and renting them out gives you that veiled sense of being able to justify where your income is coming from,” he said.

Detective Superintendent Craig Bellis of the AFP’s money laundering division. Picture: Jason Edwards

“But there’s probably occasions where people are bidding on houses, where they’re bidding against people that aren’t worried about inflation, they’re not worried about interest rate rises because they’re not borrowing that money because it’s come from criminal purposes.”

The Australian Federal Police smashed an alleged money laundering ring in February, seizing more than $150 million in property, cash and luxury goods.

Nine people were arrested with 20 properties in Sydney and a 360-hectare parcel of land near Sydney’s second airport was seized.

Chinese money laundering groups have been particularly active in Australia, acting as a shadow bank for drug deals brokered there.

AFP Commander Paula Hudson with a Porsche, Lamborghini, and a Bentley. Picture: Jason Edwards

AFP Commander Paula Hudson revealed the AFP has confiscated $900 million of alleged criminal assets since 2019, among the assets a $430,000 black Lamborghini.

Another $200 million has been seized from criminals living offshore.

“I think about honest, hardworking citizens and particularly at this time, everyone’s doing it tough. People are trying to pay mortgages, try to put meals on the table for their families, doing an honest, hard day’s work, day in and day out,” Commander Hudson, who is in charge of the AFP’s Criminal Asset Confiscation Taskforce, said.

“Yet on the other side of the coin, I see criminals lavishly spending money on, you know, $40,000 bottles of cognac, hundreds of thousand dollars of handbags or $400,000 worth of cars. It’s an affront to our way of life.”

Commercial property, including the $4.1 million warehouse photographed, is among more than 1500 seized items under the control of the Australian Financial Security Authority (AFSA).

“We work with the AFP based on any intelligence they have to try and track down assets both locally and internationally,” AFSA’s national manager service delivery Marcel Savary said.

Originally published as Narcos on the front line: How drug cartels are raising Australian house prices