Mortgage fraud networks are active across the country: FD

Drug criminals are laundering money through fraudulent mortgages across the country, not just in Amsterdam. The Dutch banking association NVB is therefore calling for stricter measures, the Financieele Dagblad reported on Monday.

The ease with which criminal networks used fake mortgage securities in a large-scale scheme to buy up hundreds of homes in the Amsterdam region makes the existence of other networks across the country very likely, Amsterdam police chief Pim Jansonius told the newspaper.

According to Jansonius, the total number of homes acquired through fraud could be as high as 8,000.

“We see that people who were involved in drug trafficking are turning to mortgage fraud. It's a good way to launder money and it's less dangerous. Plus, the chances of getting caught are much lower,” he said.

The investigation in Amsterdam uncovered a network of six mortgage advisory firms, financial services companies and other real estate agents.

The mortgage advisors submitted fake mortgage applications to banks at least twice a month, based on falsified documents such as pay slips and financial statements. In total, police estimate that 800 homes have been purchased in this way since 2018.

The banks are not prepared to detect criminal mortgage applications, said Eelco Dubbeling, director of the Dutch banking association NVB. “This is very worrying. It is time for us to close the door to criminals. We need to talk to the new Minister of Justice about this,” he said.

Another six regional police units are currently investigating similar scams, while a unit in North Holland discovered dozens of fraudulent mortgages in the names of one-man businesses such as cleaning and window cleaners. In The Hague, a mortgage fraud ring led to suspected drug criminals.

To prevent mortgage fraud, systemic deficiencies in the mortgage system must be addressed, Jansonius said.

“Banks should be allowed to check with the tax office whether the income information provided by the customer is correct, which is currently illegal,” he said.

He also said that chamber of commerce registrations should be more strictly checked. “Currently, a criminal can set up a company from his mobile phone and apply for a mortgage half an hour later,” Jansonius said.