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Is the New Miami Boom Fueled by ‘Dirty Money’?

Posted by Jeremy Resnick | Jan 21, 2014 | 0 Comments

Previously, we blogged about issues with South Florida real estate and how it has been and can be used as a mechanism for the laundering of foreign monies into the United States. In addition, we have raised concern over the effect this phenomenon as it relates to the increased prices for South Florida real estate.

The article can be read in full below. I would also suggest that anyone who is interested read this article from the Nation: http://www.thenation.com/article/176486/miami-where-luxury-real-estate-meets-dirty-money?page=0,0

Here are some interesting facts from the articles:

1. Real estate is traditionally the preferred asset for criminals and thieves looking to stash money.
2. Jorge Pérez, a developer known as the “Condo King,” told a local real estate conference earlier this year that all these foreign buyers make Miami the only city in America where the cash model works.
3. Significant numbers of foreign condo buyers are political figures and businesspeople seeking to illegally export capital abroad, launder profits or evade taxes.
4. According to a May 2011 Treasury Department report. “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.”
5. In February, a member of Russia's ruling party, Vladimir Pekhtin, was forced to resign from the Duma when a blogger published documents showing that he owned three Miami properties worth more than a combined $2 million.
6. In September of 2012, The New York Times reported that wealthy Argentines had been pouring money into Miami real estate “by expensive and sometimes illegal means.” 7. Hugo Chávez's presidency prompted massive illegal capital flight by wealthy Venezuelans, with vast sums pouring into Miami. Some local realtors to joke that Chávez should have been named condo “Salesman of the Year.”
8. Alvaro Lopez Tardon, the alleged leader of a Spanish drug gang, is currently facing trial in Miami on charges that he bought fourteen condos and a fleet of luxury vehicles to launder $26.4 million in cocaine profits.
9. Florida's rate of mortgage fraud was higher than anywhere else in the country between 2000 and 2008. In the latter year, Don Saxon, Florida's top mortgage industry regulator, was forced to resign after a Miami Herald investigation found that 10,000 criminals–including burglars, cocaine traffickers and identity thieves–had been approved to broker home loans in Florida and had committed at least $85 million in mortgage fraud.
10. Charles Intriago, a former assistant U.S. attorney and Florida's special counsel on organized crime recently was quoted as follows: “There is a wave of willful blindness about the source of a good portion of the money coming into real estate investments in South Florida . . . . There is no way in hell that all of that money is coming out of Mother Teresa's convent.”

This recent article from the World Property Channel raise some additional concerns.

http://www.worldpropertychannel.com/featured-columnists/global-property-beat/miami-housing-boom-miami-real-estate-luxury-real-estate-money-laundering-the-nation-south-beach-condos-peter-zalewski-dirty-money-7502.php

About the Author

Jeremy Resnick

Attorney Damien Aranguren is a native Floridian and was raised in Osceola County. Damien graduated with his undergraduate degree from the University of Central Florida in 2004. He received his Juris Doctor degree from Stetson University College of Law in 2008  before being hired as an Assistant A...

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