Red flags for potential money laundering in real estate include completing luxury real estate purchases. (Select Two.)

This choice describes shell companies used for clearly stated legitimate purposes such as privacy and asset protection, without the additional suspicious indicator of unrelated third parties or unexplained fund origins.

Purchasing real estate in the names of unrelated third parties is a primary money laundering indicator because it conceals the true beneficial owner, making it difficult to trace illicit funds back to their actual source. This layering technique is specifically flagged in AML guidance as a high-risk behavior in real estate transactions, as it deliberately distances the criminal from the asset.

Using proceeds from a prior property sale or investment liquidation represents a documented, traceable source of funds, which is the opposite of a money laundering indicator.

Using legal entities and intermediaries to shield purchaser identity is a red flag because it creates additional opacity around ownership, a key money laundering tactic. FinCEN and FATF both highlight the use of complex ownership structures with multiple intermediaries as a significant indicator of potential illicit activity in real estate.

While back-to-back loans using cash collateral can be a laundering method in some contexts, this choice as presented does not specifically describe a pattern flagged as a red flag for completing a real estate purchase.