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The Department of Justice is moving to take hold of a Mongolian government official's New York real estate as it increases its spotlight on property as a means of international money laundering.
On Tuesday, the DOJ filed a complaint to seize $14M worth of Manhattan apartments owned by Sukhbataar Batbold, alleging the units were bought with the profits from an international corruption scheme, violating federal money laundering laws.
Batbold was Mongolia's prime minister from 2009 to 2012 and currently serves on Mongolia's parliament.
According to the DOJ, Batbold abused his position as prime minister to give profitable contracts selling copper from Mongolian-controlled mines to companies owned by his son or other associates. The complaint states Batbold and his family sold Mongolian natural resources worth millions and concealed it by buying two swanky Manhattan apartments, violating Mongolian anti-corruption laws.
As a result, the New York City properties are subject to be forfeited, Principal Deputy Assistant Attorney General Nicole M. Argentieri said, according to the Office of Public Affairs.
"Kleptocrats should take note: the Criminal Division is unwavering in its resolve to recover proceeds of official corruption and take the profit out of crime," Argentieri said.
The U.S. has been upping its efforts to crack down on international money laundering via real estate, particularly in the wake of Russia's invasion of Ukraine and the United States' subsequent sanctions. Russian oligarchs' foothold in U.S. real estate is vast.
In February, the Treasury Department's financial crimes unit introduced a rule requiring real estate pros involved in all-cash transactions to flag suspicious activity.
This is intended to send a message that the U.S. is no longer an option for criminals wanting to hide money in American real estate, said Ian Gary, executive director of the Financial Accountability and Corporate Transparency Coalition. The Department of Treasury estimates $2.3B illegally flowed through the U.S. from 2015 to 2020.
Treasury officials are looking to launch additional anti-money laundering reform in U.S. commercial real estate markets later this year.
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