Drug criminals running mortgage fraud networks throughout Netherlands: report

Criminals from the drug trade are setting up large-scale mortgage fraud networks throughout the Netherlands. Several regional police forces shared signals about this after the Amsterdam police discovered that drug criminals had purchased hundreds of homes in the capital through mortgage fraud in recent years. Nationwide, at least 8,000 homes are in criminal hands, the Financieele Dagblad reported.

According to the police, the ease with which criminals can get a mortgage using fake documents is alarming and has a huge attraction effect. “We are currently seeing criminals grow from drug trafficking to this form of fraud. Particularly because it is an easier revenue model and also offers the opportunity to launder drug money,” Amsterdam police chief Pim Jansonius told FD. “At the same time, they run less risk since, in the drug trade, you never know who is going to chase you: the police or fellow criminals. The chance of being caught in fraud is also significantly smaller.”

In July, the Amsterdam police reported uncovering a criminal network consisting of a realtor with a history in drug trafficking, administrative offices, and mortgage advisors. The network arranged mortgages with fraudulent payslips and employer statements against cash payments of around 10,000 euros per home.

After the media picked up the story, several police units contacted their Amsterdam colleagues. “It turns out that six units in the country are conducting or will conduct investigations into virtually identical criminal clusters of a similar size to those in Amsterdam. We received similar signals from the three other units,” Jansonius said.

He called the extent of these networks “alarming.” Thousands of homes are being removed from the regular housing market nationwide, he said. “It disrupts society and undermines the integrity of the financial sector. Criminals involved earn tens of millions from it, and banks provide billions in mortgages,” said Jansonius.

The police chief advocates for allowing banks to check with the Tax Authority whether the income stated on a payslip checks out. Privacy legislation currently prohibits that. Banks should also better check Chamber of Commerce registration - check if the company has filed any annual statements, Jansonius recommended. “Currently, criminals can set up a company from prison and apply for a mortgage half an hour later. In our investigation, we have not seen a single company that files annual statements.”

The Dutch Banking Association (NVB) confirmed that mortgage fraud is a growing problem, and banks are unable to defend against it themselves. “This is very worrying,” NVB director Eelco Dubbeling told FD. “It is time that we structurally close the gate to criminals. We would like to discuss this with the new Minister of Justice.”