Thread: Miami ‘Condo King’ Who’s Friends with Trump Turned Down an Offer to Build the Wall

Is Miami's Latest Real Estate Boom Fueled by Criminals and Money Laundering?

BY KYLE MUNZENRIEDER

Miami is less than four years removed from an epic real estate crash that wrecked the local economy, but it seems lately that new luxury condos are breaking ground every week. Most of the local economy is still in shambles. Unemployment remains high. The vast majority of local residents are still struggling. So for whom are all those luxury penthouses meant? Shady foreigners looking to drop ill-gotten cash on real estate, according to a report in the Nation.

"South Florida has always been a favorite destination for international visitors and political figures, whether it is for vacation or to purchase property along its sandy and sunny beaches," reads a May 2011 Treasury Department report cited by the Nation. "As such, Miami finds itself in the distinct position of being a reoccurring hot spot for funds pilfered by politically exposed persons (PEPs) and other criminal proceeds."

Among the cases mentioned by the Nation:

• A member of the Russian legislature who was forced to resign after it was found he owned $2 million worth of property he didn't disclose.
• Alvaro Lopez Tardon, an alleged Spanish drug lord, is facing trial for buying 14 condos in Miami in cash to launder more than $24 million in cocaine money.
• A score of Venezuelans who illegally funneled their cash into Miami real estate after the election of Hugo Chávez.
• The U.S. Government returning $2.7 million to Nicaragua after it was stolen by the country's president, Arnoldo Alemán, and partially invested in Miami real estate.

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However, who exactly owns many high-end condos in Miami is difficult to track. Many are registered to business entities incorporated in Delaware or other offshore tax havens. Local politicians and business leaders in Florida are apparently fighting hard against laws that would require more sunlight in the shady area of foreign property ownership in America.

"There is a huge amount of dirty money flowing into Miami that's disguised as investment," Jack Blum, a Washington attorney specializing in money-laundering cases, tells the Nation. "The local business community sees any threat to that as a threat to the city's lifeblood."

The piece ends with this darkly funny account:

Jack Blum, the money-laundering investigator, recounted to me a work trip to Miami two years ago, when he was stunned to see condominiums going up in the poor Liberty City neighborhood. "I was in a cab and asked the driver what was going on," he said. "He didn't miss a beat -- he said, 'That's from money laundering.' When it's that obvious to cabdrivers, you know the situation is bad. But that's what the city's economy is built on, and it is a monumental challenge to fix it."

Sadly, this is nothing new. Miami's booms have always been built on criminal activity and money laundering. What the piece doesn't get into is the effect on Miami's lower and middle classes.

Gentrification remains rampant. As developers carve out new areas to erect skyscrapers (Edgewater is only the latest hot spot), it causes rents to rise in the surrounding areas, spurring waves of gentrification and rent escalation elsewhere in a county that already has areas where income inequality is as bad as it is some parts of the Third World.

But hey, at least developers are getting rich(er), and no local leaders -- business, real estate, political, or otherwise -- seem particularly eager to stop it.

http://www.miaminewtimes.com/news/is...dering-6522867

OCTOBER 14, 2016 10:00 AM

Before Donald Trump attacked foreigners, he helped sell them condos

Donald Trump built his presidential candidacy disparaging foreigners, describing Mexican immigrants as “rapists,” comparing Syrians refugees to a “Trojan horse” and promising to build a “great wall” on the southern border.

But in South Florida, Trump helped local developers sell condos to buyers from Latin America and Russia, including people allegedly involved in corruption and wrongdoing, as well as to dozens of anonymous offshore companies.

In 2004, Trump signed a licensing deal for an 813-unit condo project called Trump Towers in the city of Sunny Isles Beach. The Apprentice star’s gold-plated name was used to market the units to wealthy foreigners.

The Miami Herald found that at least 13 Trump Towers buyers have been the subject of government investigations, either personally or through their companies. They include members of a Russian-American organized crime group, a Venezuelan oilman convicted in a bribery scheme and a Mexican banker accused of robbing investors of their life savings.

Nothing Trump and his partners did was illegal, although they profited from a South Florida real estate market that regulators and former law enforcement officials believe is tainted by dirty cash. That’s because lobbying has left real estate unregulated compared to many other industries where money laundering abounds. The purchases highlighted by the Herald show how easily illicit funds from around the world can worm their way into local real estate.

WHEN MEXICO SENDS ITS PEOPLE, THEY’RE NOT SENDING THEIR BEST. … THEY’RE SENDING PEOPLE THAT HAVE LOTS OF PROBLEMS, AND THEY’RE BRINGING THOSE PROBLEMS WITH US. THEY’RE BRINGING DRUGS. THEY’RE BRINGING CRIME. THEY’RE RAPISTS. AND SOME, I ASSUME, ARE GOOD PEOPLE.
Donald Trump

Now, Trump is running an “America first” presidential campaign fueled by voters feeling battered by the same global economy he fed off as a developer.

“It strikes me as hypocritical,” said Richard Gordon, who played a key role in designing anti-money-laundering rules for the International Monetary Fund and World Bank after the Sept. 11 attacks. “He’s repeatedly made comments about immigrants bringing crime to the U.S. … [But] his principles appear to be doing whatever he can for himself to make money.”

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While Trump’s name adorns Trump Towers —signs plastered on the construction site described him as one of the project’s “visionaries”— the Trump Organization didn’t own or build the project, or an earlier Trump-branded development several blocks north called Trump Grande. Michael Dezer, the developer who first recognized the massive potential of Sunny Isles Beach, was the driving force behind the condos. His company handled sales.

Trump received a fee for each unit sold. Buyers around the world trusted his brand, hoping his credibility and status would rub off on them when they invested. Trump was especially attractive in Russia, where his purported business connections and frequent praise for Vladimir Putin have become a political flashpoint.




Ultimately, Trump helped transform Sunny Isles Beach — once a low-slung vacation spot north of Miami Beach popular for its kitschy motels — into an imposing, high-rise haven for rich Russians and Latin American millionaires.

As a businessman, real estate was Trump’s meal ticket. But it’s also an area where his financial interests could clash with U.S. policy, as the federal government cracks down on money laundering and tax evasion.

After the publication of the Panama Papers — an exposé of how the rich secretly move money through offshore shell companies, sometimes into Miami real estate — the Obama administration called for new regulations.

“Every law enforcement agency wants more tools to pursue shell companies,” said Brian Bruh, former director of the Financial Crimes Enforcement Network (FinCen), a U.S Treasury Department agency.“Unfortunately, the United States is gaining a reputation as an easy place to launder money.”

Earlier this year, FinCen launched a temporary program to monitor shell companies buying pricey real estate in South Florida. The dragnet has contributed to a slowdown in luxury sales.

Should Trump win the election, the developer would be unlikely to support more enforcement, said Richard Painter, former chief White House ethics lawyer for President George W. Bush.

Fewer opaque shell companies mean fewer buyers for Trump-branded condos, posing a conflict of interest, Painter said.

“It’s going to have a financial impact on his businesses,” said Painter, who added Trump would face a similar conflict in deciding whether to continue sanctions imposed against Russia after its 2014 intervention in the Ukrainian crisis.

The Trump campaign declined to comment for this story.

Mr. Worldwide

Trump’s popularity was at its peak when he agreed to participate in Trump Towers, a complex of three 45-story buildings with 813 total condos that opened from 2008 to 2010. His reality show was a hit, and his involvement boosted sales and raised prices.

“I think The Apprentice has changed a lot of things, “ Trump told the Herald in 2006. “My father wouldn’t believe this one. It really took the brand to a different level.”

While the campaign refused comment, Alan Garten, the Trump Organization’s general counsel, did agree to an interview. He said the Trump Towers licensing agreement required the company to help prepare marketing and advertising materials, but not to engage in sales.

“The developer is the one that sells the units,” Garten said. “While we may assist in some of the marketing, it’s the developer running the show. …We didn’t enter into any contracts. We didn’t sell anyone any units. We’re the brand.”
And he said shady buyers are an industry-wide problem for luxury real estate, not one unique to Trump projects.

“It’s completely unfair and completely misleading to suggest that we had anything to do with these people,” Garten said. “It has nothing to do with the Trump name or brand. It has to do with the market.”

Federico Bonomi


Federico Bonomi is one of the owners of popular Argentine fashion brand Kosiuko. In 2006 and 2014, Argentine prosecutors called executives at Kosiuko and other clothing companies to testify over allegations their clothes were manufactured in sweatshop conditions. His company, which would not discuss the matter with the Herald, has not been charged, although several factory owners were brought to trial.


Regulators have worried about luxury real estate markets awash in dirty money for more than a decade.

The USA Patriot Act originally called for real estate professionals to screen clients for signs of money laundering and corruption — until lobbying won the industry an exemption from rules that apply to banks and other financial institutions. (Stockbrokers, mortgage lenders, check cashing stores, precious metal dealers and casinos are among the businesses required to report suspicious transactions.)

The issue came up again during the recession when international buyers took advantage of falling prices in Miami to scoop up condos, sometimes dozens at a time, with few questions asked. The wave of foreign cash spawned jobs and property tax revenues in South Florida, and cleared mountains of empty condos left by overbuilding.

MIAMI IS LITERALLY THE ONLY REFUGE WHERE WEALTHY SOUTH AMERICANS CAN ENJOY THEIR SUCCESS. I REMEMBER IN THE DAYS OF TRUMP TOWERS THEY WOULD CLOSE ON THE APARTMENT WITH US THEN IMMEDIATELY GO BUY A FERRARI.
Gil Dezer, developer

But now that the economy has recovered, there’s another side to Miami’s latest real estate boom: Offshore investments are inflating housing prices beyond what most locals can afford. The region has become one of the nation’s least affordable places to live. An October analysis by Bloomberg found income inequality is greater in Miami than in any major U.S. city.

Out of the shadows

In order to reconcile Trump’s business career with his statements as a politician, the Herald examined property records at Trump Towers, where condos generally trade for between $600,000 and $3.2 million.

More than 60 percent of units are owned by corporations.

These companies are called “shells” because they exist only to hold real estate. Shell companies have established legal uses such as liability protection. In addition, foreign nationals can lower their U.S. tax burden by owning real estate through offshore corporations. But corporate laws in many jurisdictions, both foreign and domestic, allow owners of these companies to stay hidden. Instead of listing their own names, buyers can put down lawyers, accountants, real estate agents and other fronts on corporate filings.

More than 170 Trump Towers units are owned by opaque offshore corporations or Delaware companies, structures designed to conceal their owners.

+

Dennis Fitzgerald, an attorney and former Drug Enforcement Administration agent, said shell companies can cloud the paper trail to a point where it can’t be followed. “It’s a stone wall in a lot of investigations,” he said.

There are ways to pierce the corporate veil, however.

The Herald combed through property records, corporate paperwork, mortgage documents and renovation permits.

Behind the documents, it found bankers, businessmen and politicians from around the world, as well as people who’ve run afoul of the law. Those who’ve been formally investigated or convicted of crimes include:

▪ Anatoly Golubchik and Michael Sall, members of a Russian-American organized crime group convicted in the United States for their role in an illegal high-stakes sports betting ring. The gambling operation catered almost exclusively to “oligarchs”from the former Soviet Union, according to a federal indictment. An alleged leader of the operation was Alimzhan Tokhtakhounov, a Russian businessman also accused of rigging events at the 2002 Winter Olympics in Salt Lake City. In court filings, prosecutors said two Trump Towers units owned by Golubchik and Sall were subject to forfeiture as “proceeds obtained … from racketeering activity.” The two homes are valued at $2.3 million and are still listed in the names of Golubchik and Sall. Efforts to reach them through their lawyers were unsuccessful.

▪ Rafael Olvera Amezcua, a Mexican financier investigated in his home country for allegedly defrauding investors. Mexican regulators seized his credit union, FICREA, two years ago, saying Olvera had purloined $184 million. He allegedly used the money to buy high-end real estate across the United States. His $1.8 million Trump Towers unit is currently registered in his son’s name. Olvera owns condos at other upscale buildings in South Florida, as well as suburban homes and a medical office building. In Mexico, a judge ordered Olvera’s detention last year, prompting the government to ask the United States for his extradition and Interpol to send out an alert for his arrest. But another judge issued a decision protecting Olvera, leaving the case in limbo. A bankruptcy trustee for the credit union is suing Olvera, his son and several associates in Miami-Dade County civil court. Olvera did not respond to a request for comment made through his attorney.

▪ Peter Kiritchenko, a Ukrainian businessman arrested on fraud charges in San Francisco in 1999. Prosecutors convinced Kiritchenko to testify against Pavel Lazarenko, Ukraine’s former prime minister. The government said the pair laundered hundreds of millions of dollars. Lazarenko was convicted of money laundering in the United States in 2004. Kiritchenko pleaded guilty to one count of receipt of stolen property, but said he had been an unwilling participant in the scheme. He and his daughter own two units at Trump Towers. Total value: $2.56 million. The Herald could not reach Kiritchenko.

▪ Roberto Rincon, a Venezuelan oil industry contractor who pleaded guilty earlier this year to tax evasion and violating the Foreign Corrupt Practices Act. Rincon and a business partner were accused of paying millions of dollars in bribes to win $1 billion worth of contracts from Venezuela’s state oil company, PDVSA.

He is believed to be cooperating with American prosecutors in a wide-ranging investigation into PDVSA.

The Trump Towers unit is held by an anonymous shell company. But Rincon’s son signed a permit for an interior renovation — a public document in Miami-Dade County — and paid property taxes on the condo through a company that shares an address with his father’s oil equipment business in Houston. The unit was listed for sale at $3.1 million four days after Rincon’s guilty plea was announced. (A lawyer for Rincon said he does not own the property.)

Bernardo Nussbaum Ruf


Bernardo Nussbaum Ruf is an Ecuadorean media mogul. His company was the target of an anti-monopoly inquiry for its alleged control over many of the country’s radio frequencies. Nussbaum denied the allegations and no charges were brought.


^{Unlike banks, developers and property brokers have few obligations to scrutinize clients. Criminals know they can park cash in American real estate with little vetting, enabling corruption and lawbreaking around the world, according to former law enforcement officials.}

People “looking to hide investments use real estate all the time,” said Michael Levine, a trial consultant who chased money launderers as a DEA supervisor. “A lot of the luxury development [from Miami to Palm Beach] has been drug money.”

State governments eager for incorporation fees are part of the problem.

Setting up a shell company in Delaware and a handful of other states often doesn’t require ID and “is easier than getting a library card, or a gym membership, or credit card,” said Shima Baughman, a law professor at the University of Utah who studies corporate rules.

The Herald was unable to uncover the names of the owners of nearly 80 shell companies that hold Trump Towers units, roughly 10 percent of the total.

Crackdown

The federal government has started chipping away at the real estate industry’s exemption from know-your-client rules that affect other industries.

In January, the U.S. Financial Crimes Enforcement Network launched a monitoring program to detect money laundering in luxury Manhattan and Miami-Dade homes. It requires title insurers to report the real owners behind shell companies buying expensive residential properties.

Officials later expanded the operation to the Los Angeles, San Francisco, San Diego and San Antonio areas, as well as Broward and Palm Beach counties.

One unit at Trump Towers shows how difficult it is to penetrate layers of corporate secrecy.

Moisés Alves de Oliveira Neto

Moisés Alves de Oliveira Neto is commercial director for Hospfar, a pharmaceutical company in Brazil. He and two other executives were charged in February with overbilling a regional government for medicines. A judge hearing the case blocked more than $3 million tied to the company at the time, alleging they were “illicitly indulging themselves in the public purse.” The case is ongoing. He did not return calls.


In 2011, a Slovenian luxury car dealer named Andrej Jersic sold his Trump Tower condo for nearly $1.6 million, a steep loss from the $2.1 million he had paid three years earlier.

The buyer was Rice Island Inc., an anonymous company headquartered in the Marshall Islands. The impoverished Pacific island nation boosts its economy by collecting fees on shell companies registered there. On its website, the Marshall Islands’ corporate registry division states:

“There is no mandatory requirement to file the names of directors, officers or shareholders.”

In Florida public records, Rice Island lists an address on the 23rd floor of a Brickell office building. But that office doesn’t seem to exist. The leasing agent for 800 Brickell Ave. says the tower has only 15 floors.

Because there’s often no way to find the real owners of offshore companies, they are “the perfect vehicle for criminal activity,” said Kenneth Rijock, a former Miami attorney and convicted money launderer who is now a financial crimes consultant.

Jersic was later found guilty of tax evasion in Slovenia and sentenced to prison. He is appealing the decision.

Reached by email, Jersic said he had not committed any crimes. He believed the owner of Rice Island was Brazilian, but did not have more information.

Trump town

Sunny Isles Beach is Trump’s city: big, brash and expensive.

Last year, 29 percent of waterfront condo sales in Sunny Isles Beach were in Trump-branded buildings, according to Peter Zalewski of real estate website Cranespotters.com.

“The Sunny Isles brand, the vibe, the lifestyle: they all come from Trump,” Zalewski said.

Luiz Carlos Attie


Luiz Carlos Attie is the mayor of Cristalina in Brazil. Investigators examined his role in a scandal over missing city pension money that focused on his cousin, a manager of the pension fund. Attie was not charged. Court records show three open criminal investigations against Attie in Brazil, although details are scant and it’s not clear if they are connected to his cousin. One involves “damage of public patrimony,” a term for harming the public good. Another involves criminal complaints of slander. Investigators have not revealed the nature of their inquiry in a third case. His office did not return calls from the Herald.


The mix of owners at Trump Towers reflects South Florida’s status as a magnet for foreign flight capital.

Latin Americans own 41 percent of units, with the majority coming from Brazil, Argentina, Mexico and Venezuela. Nearly 20 percent belong to Americans, while Russians (7 percent) and Canadians (5 percent) are well-represented too.

The Herald used public records, news reports and social media to determine buyers’ home countries. It was unable to figure out the nationality of 22 percent of buyers.

It’s not clear exactly how much Trump made from sales at the Sunny Isles Beach towers. He has refused to release his taxes, saying he is under routine audit.Financial disclosure forms filed as part of his presidential bid show he still profits from his licensing deals with Michael Dezer.

(Miami’s biggest builder, Jorge Pérez, was also a partner until the financial crisis forced him to drop out.)

In 2014 and 2015, Trump reported receiving between $100,000 and $1 million in annual royalties from Dezer.

Those fees come from a hotel at Trump Grande — a collection of three high rises farther north on the oceanfront strip — not the condos. Trump profited only from original condo sales, not resale transactions. Nine of the 13 transactions highlighted by the Herald were original sales.

Marcos Pereira Lombardi


Marcos Pereira Lombardi owns media outlets in Brazil, where he has been investigated for allegedly getting an insider deal on government land and fixing gasoline prices. Pereira says the investigations were without merit.


Gil Dezer now leads his father Michael’s company. The younger Dezer, who is backing Trump for president, said Trump and his team weighed in on lobby and unit designs, asking for higher ceilings and bigger doors.

But he said the Trump Organization never met with buyers before closing. And he added that his company wasn’t able to background buyers.

“There’s not much we can do with respect to background checks of our buyers,” wrote Dezer, who declined a phone interview, in an email. “All deposits come in by wire and we are not allowed to discriminate on who we will accept or not accept in the building. Just imagine the problems and lawsuits if we started telling people they cannot purchase.”

(The Fair Housing Act prevents discrimination based on race, disability, religion, national origin and other factors.)

Dezer said foreign buyers often use opaque shell companies to protect their privacy, fearing kidnapping or extortion back home.

“Miami is literally the only refuge where wealthy South Americans can enjoy their success,” Dezer wrote. “I remember in the days of Trump Towers they would close on the apartment with us then immediately go buy a Ferrari.”

Tatiana Coelho de Andrade Xavier

Tatiana Coelho de Andrade Xavier has been investigated in Brazil for alleged customs fraud. Charged in the case was Marcio Silva Xavier, who had previously been sentenced as the result of a probe that targeted government corruption, fake billing and false pricing on customs documents involving the import of everything from cars to electronics. She could not be reached.


Sunny Isles Beach is also attractive for Russians, who have accounted for between 2 and 3 percent of international buyers in South Florida since 2011, according to the Miami Association of Realtors. Trump Towers boast more than double that percentage.

Trump’s brand was crucial for marketing the units in Russia, said George Baronov, a Russian-born realtor who worked as a lead broker on the project.

“The name brand set the standard for gold-living, for luxury,” Baronov said. “There’s a big trust factor with Russians. …They felt secure investing in the name.”

Trump Towers brokers attended real estate shows in Moscow and St. Petersburg. They traveled to Nice and Cannes, where wealthy Russians congregate.

“All the oligarchs love the French Riviera,” Baronov said.
Today, Sunny Isles Beach is sometimes called Little Moscow, with Russian restaurants, groceries and signs.

“In the Soviet Union, Miami Beach was a place of dreams,” said Ilia Shumanov, deputy director for the Russian chapter of Transparency International, an anti-corruption advocacy group. “It was heaven. People who have money, they want to spend it in this place.”

Mauro Luiz Soares Zamprogno

Mauro Luiz Soares Zamprogno was arrested in 2007 on allegations of corruption and money laundering. Brazilian prosecutors said employees of the state oil company, Petrobras, shared inside information with Zamprogno and associates so they could win contracts collectively valued at $32 million.

Zamprogno was secretly taped by Brazilian federal police having a phone discussion with a Petrobras employee over the percentage breakdown of their alleged illicit gains. It’s not clear how the case was resolved. He could not be reached.


Transparency International monitors the outflow of capital from Russia to South Florida, particularly when it comes to people with political connections.

“It’s very easy to hide money in the U.S.,” Shumanov said. “You can be the owner of the property not in your name but as a shareholder of a shell company and nobody will know.”

As for Trump, Shumanov said Russians generally admire the New Yorker, especially after he hosted the Miss Universe pageant in Moscow. (A Russian version of The Apprentice, called The Candidate, failed to catch on.)
Many Russians think of Trump as a “kindred spirit,” he said.

http://www.miamiherald.com/news/poli...108150442.html
Read more here: http://www.miamiherald.com/news/poli...#storylink=cpy

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I don't like this - BUT - if you are selling expensive condos, you are going to sell them to people who have money. That includes foreigners and/or drug dealers. That's just a fact.

This is anti-Trump propaganda from the DNC. Why it's on our forum is beyond me.

Originally Posted by Judy

This is anti-Trump propaganda from the DNC. Why it's on our forum is beyond me.

I don't accept the DNC is any different than a lot of so called Republicans - but certainly it is the media pushing this.

China and our dealings with China has had a devastating effect on our economy. They could not have done this without pay offs to our government officials and corporate heads. They are buying up politicians and parts of America right and left.

Saudi Arabia has been pulling strings in Washington for a very long time.

Can we talk about Israel?

It is OK and right that we discuss any dealings done with the President, but if we are going to talk business dealings - shouldn't we be a little more even handed.

If drugs were made legal, or were curtailed, there would be rampant bank closures. In fact, some years ago, there was an article stating many major cities would be bankrupt if drugs were actually curtailed.

Wall Street would have a major hiccup - or more likely seizure, if this happened.

One has to wonder at picking up the 'big bad Russia' rhetoric and giving pass to other involvement in more grievous enterprises by many more entities in this country.

Originally Posted by Judy

This is anti-Trump propaganda from the DNC. Why it's on our forum is beyond me.

So you've never posted propaganda in favor of or against another politician or political party here at ALIPAC?

Propaganda

[prop-uh-gan-duh]
Spell Syllables

• Examples
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See more synonyms on Thesaurus.com

noun

1. information, ideas, or rumors deliberately spread widely to help or harm a person, group, movement, institution, nation, etc.

2. the deliberate spreading of such information,rumors, etc.

3. the particular doctrines or principles propagated by an organization or movement.

Originally Posted by nntrixie

. . . One has to wonder at picking up the 'big bad Russia' rhetoric and giving pass to other involvement in more grievous enterprises by many more entities in this country.

Last week was Russian week.

This week is Chinese week.

Sooner or later everyone gets a turn.

Chinese pursuit of MoneyGram raises espionage fears


MoneyGram... admitting to criminally aiding and abetting wire fraud and failing to maintain an effective anti-money laundering program...