aside BuzzFeed’s Research Regarding President’s Properties And Possible Money Laundering Connections

BuzzFeed’s research indicates that more than 1,300 Trump condominiums were bought not by people but by shell companies or LLCs, and that the purchases were made without a mortgage, avoiding inquiries from lenders. Some of these properties were resold within a 6 month’s time frame. When the properties are valued in the millions of dollars, then experts consider these factors to be possible signs of money laundering.

For me, another factor would be the number of Russian oligarchs who purchased the president’s condos who exhibit all of the above signs. I suspect that this is just one money trail that is being followed by the FBI.  According to BuzzFeed, Trump condo sales reportedly are under scrutiny by the FBI’s Special Counsel Robert Mueller, whose team includes Justice Department prosecutor Kyle Freeny, a money-laundering expert.

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Here’s the rest of the story…

On January 12, 2018, Thomas Frank of Buzzfeed penned the following report, “Secret Money: How Trump Made Millions Selling Condos To Unknown Buyers.”(“A BuzzFeed News review of every sale of a Trump-branded condominium in the United States provides the first comprehensive look at how many went to unidentified buyers who paid cash, an indication of possible money laundering.”)

More than one-fifth of Donald Trump’s US condominiums have been purchased since the 1980s in secretive, all-cash transactions that enable buyers to avoid legal scrutiny by shielding their finances and identities, a BuzzFeed News investigation has found.

Records show that more than 1,300 Trump condominiums were bought not by people but by shell companies, and that the purchases were made without a mortgage, avoiding inquiries from lenders.

“Those two characteristics signal that a buyer may be laundering money, the Treasury Department has said in a series of statements since 2016. Treasury’s financial-crimes unit has, in recent years, launched investigations around the country into all-cash shell-company real-estate purchases amid concerns that some such sales may involve money laundering. The agency is considering requiring real-estate professionals to adopt anti-money-laundering programs.”

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“All-cash purchases by shell companies do not by themselves indicate illegal or improper activity, and they have become more common in recent years in both Trump buildings and other luxury home sales across the United States. Developers such as Trump have no obligation to scrutinize their purchasers or their funding sources.”

“But federal investigations “continue to reveal corrupt politicians, drug traffickers and other criminals using shell companies to purchase luxury real estate with cash,” Treasury’s former financial-crimes chief Jennifer Shasky Calvery said at a Capitol Hill hearing in 2016.”

“Treasury’s Financial Crimes Enforcement Network (FinCEN) broadcast that concern in an August 2017 advisory to the real-estate industry warning that all-cash real-estate purchases by shell companies are “an attractive avenue for criminals to launder illegal proceeds while masking their identities.”

“Trump condo sales that match Treasury’s characteristics of possible money laundering totaled $1.5 billion, BuzzFeed News calculated. They accounted for 21% of the 6,400 Trump condos sold in the US. Those figures include condos that Trump developed as well as condos that others developed in his name under licensing deals that pay Trump a fee or a percentage of sales.”

“But a months-long BuzzFeed News examination of every Trump condominium sale in the US shows that such sales surged in the late 2000s and early 2010s, when some Trump businesses were in financial trouble and when Donald Trump Jr. made his now-famous remark about the Trump Organization seeing “a lot of money pouring in from Russia.”

From left to right: Trump Tower in New York City, Trump International Hotel and Tower in Chicago, and Trump International Hotel Las Vegas.
Getty Images; Alvesgaspar / Flickr; Lovelove17243875683 / Flickr

“The surge was driven by the opening of 11 Trump condo buildings between 2008 and 2010 as Trump shifted his real-estate business from developing high-rises to licensing them. Nine were Trump-licensed, and they drew hundreds of shell companies that paid an average of $1.2 million in cash for a condo. In six of the licensed buildings, cash-paying shell companies bought at least a third of the condos, records show.”

“It’s not clear how much Trump received from the sale of Trump-licensed condos, but when Trump announced his candidacy in 2015, he said his “real estate licensing deals” and other brands were worth $3.3 billion.”

“At the Trump SoHo Hotel Condominium New York in Manhattan, 77% of the sales were to shell companies that paid cash. One of the project’s Russia-born developers was convicted of money laundering in the 1990s. A pending lawsuit calls Trump SoHo a “monument to spectacularly corrupt money-laundering and tax evasion,” though it says in a footnote that “there is no evidence that Trump took any part in, or knew of, their racketeering.”

“Hundreds of the secretive Trump condo sales contain additional characteristics that FinCEN and experts warn may be indicative of money laundering.”

Trump International Hotel And Tower in New York City.
ames D. Morgan / Getty Images
  • “More than $205 million in sales were to corporations based in foreign jurisdictions known for keeping corporate records and banking information secret. The corporations were based mostly in the British Virgin Islands and Panama, two places the Treasury Department has linked to money laundering.”
  • “Corporations registered in Delaware, which FinCEN says provides “the least transparency” with corporate records of any state, bought an additional 75 Trump condos in all-cash sales that totaled $129 million. “If the corporation is set up in places where there’s some level of confidentiality, which includes Delaware, that’s another red flag,” John Madinger, a retired Treasury official and IRS special agent who investigated financial crimes, said about property sales.”
  • “Eighty-three percent of the secretive sales occurred in markets that FinCEN is investigating for possible money laundering in real estate sales. In those markets – Manhattan, South Florida, and Honolulu – FinCEN is examining every luxury-home sale to a shell company that paid cash.”
  • “At least 28 shell companies resold their Trump properties within six months of buying them in cash. The National Association of Realtors says that immediate resales can indicate money laundering, “especially if the resale price is significantly higher or lower than the original purchase price.”

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“At the Trump International Hotel and Tower in Manhattan, a shell company bought a nine-room condo for $2.26 million on Sept. 10, 1997, and sold it 8 weeks later to another shell company – for $3 million, a 33% gain.”

“In Miami-Dade County, Florida, a shell company bought a two-bedroom condo in a Trump-licensed building on Aug. 12, 2010, for $956,768. The company sold the condo to another shell company for $525,000 that same day.”

  • “Half of the secretive sales – with a total value of $769 million – were made to a particularly opaque type of shell company called a limited-liability company, or LLC, which FinCEN says is “inherently vulnerable to abuse.”
  • “Thirty-nine secretive sales were for more than $5 million in current dollars – an amount that one anti-money-laundering advocate says should prompt a seller to scrutinize the buyer. All but 4 of the sales were in buildings that Trump developed, earning him $241 million.”

“It’s not that common for someone to buy expensive real estate with cash, and if it’s a shell company, you want to find out who the buyer is and the sources of their funds,” said Shruti Shah, vice president of programs and operations at the Coalition for Integrity, an anti-corruption group. “It could be illicit money from foreign corruption, drug trafficking, human trafficking.”

“With their soaring glass facades, top-flight amenities and bold Trump logos, the condo buildings are the most visible symbol of the president’s multi-billion-dollar business empire”.

“Nine of the buildings are in Manhattan, 7 are in South Florida, and 1 each is in Chicago; Honolulu; Las Vegas; Jersey City, New Jersey; Stamford, Connecticut; and White Plains, New York.”

 NYC PropertiesNote: Trump was the developer unless otherwise specified.

“BuzzFeed News’ months-long investigation is the first to examine sales of Trump condominiums for indicators of possible money laundering and the most comprehensive analysis to date of all 22 Trump condo towers in the US.”

“BuzzFeed News examined Trump condo sales using online property records to determine the original buyers of each unit and whether they obtained a mortgage or paid cash. For buyers that were legal entities and not people, BuzzFeed News analyzed them using corporation records, property records, and other online documents to determine whether they were established businesses or shell companies, which typically generate little economic value.”

“The investigation identified 1,326 all-cash sales – some involving more than 1 condo unit – to shell companies.”

“The property records analyzed by BuzzFeed News would not by themselves reveal money laundering – only warning signs. BuzzFeed News examined non-Trump buildings in Manhattan and South Florida and found that roughly the same percentage of units were sold to shell companies in all-cash transactions as in Trump buildings.”

“Such sales are increasingly common in the expensive real estate markets where Trump has operated such as Manhattan and Florida’s Miami-Dade County. Rich investors often buy expensive homes through shell companies for legitimate purposes such as tax advantages, legal protection, and privacy.”

Florida PropertiesNote: Trump was the developer unless otherwise specified.

“When the signature Trump Tower opened in Manhattan in 1983, shell companies based in secretive foreign jurisdictions such as Panama, Cayman Islands, and the British Virgin Islands bought 43 condos in cash, BuzzFeed News found. Delaware-based corporations bought another 6 condos in cash.”

“The State Department says the British Virgin Islands has “significant money laundering risks,” Panama is “an attractive target for money laundering,” and in Cayman Islands, money laundering mostly involves “fraud, tax evasion and drug trafficking.”

“Delaware is “a haven for transnational crime,” according to the anti-corruption group  Transparency International, because “extreme corporate secrecy enables corrupt people, shady companies, drug traffickers, embezzlers and fraudsters to cover their tracks when shifting dirty money from one place to another.”

“Trump himself signed the deed for each secretive sale at Trump Tower and collected $28 million.”

“Understanding how much Trump made from all-cash sales to shell companies is complicated by a shift in the way Trump did business. Before the shift, Trump developed the buildings himself, keeping the profits. But in the 2000s he began licensing the use of his name on buildings for a fee or a percentage of sales or both, leaving the construction and sales to others. Of the $1.5 billion in secretive sales documented by BuzzFeed News, $870 million – 58% – came from such licensing deals.”

“Despite his association with Manhattan, Trump has not developed a condo building there since 2003, when he opened the Trump Park Avenue. He has developed just 2 condo buildings in the US since 2003 – high-rises in Chicago and Las Vegas. At the same time, he has licensed 12 Trump-branded towers: 7 in Florida, 4 in the New York City area and one in Hawaii.”

Note: Trump was the developer unless otherwise specified.

“Neither Trump nor his licensees have disclosed terms of the agreements. Trump also has declined to release his tax returns.”

“Trump’s federally required financial disclosures for 2015 and 2016, however, give a glimpse into his real-estate licensing business and show that it generates significantly less revenue than his condo sales. The disclosures show that Trump received $69 million from condos that he sold and between $500,000 and $5 million from condos sold by licensees in the US.”

Note: Trump was the developer unless otherwise specified.

“The developer of a Trump-licensed condo building in Hollywood, Florida, said there was nothing unusual about its sales, which occurred between 2009 and 2013. BuzzFeed News found 43% of the buyers there were cash-paying shell companies that spent $136 million buying 85 units.”

“There are many reasons for setting up entities to own real estate, especially for estate planning and the purchase of a second home, which is extremely common in South Florida.”

“The growing interest in Trump condo sales comes amid unprecedented scrutiny of possible money laundering through real estate. The Trump administration will likely face a decision on whether to crack down on the kind of all-cash, shell-company purchases that have enriched him.”

“Money laundering entails blending “dirty” money into the financial mainstream through a series of transactions and legal entities that conceal its origin. The United Nations estimates that $800 billion to $2 trillion is laundered each year.”

“High-end real estate has effectively become a safety deposit box for laundered money because there is a no-questions-asked way of doing business,” said Clark Gascoigne, deputy director of the Financial Accountability and Corporate Transparency Coalition, an international anti-corruption group.”

“That’s particularly true in the US, where surveys by the National Association of Realtors show that 21% of homebuyers were LLCs in 2016, up from 5% in 2007. For sales over $3 million, LLCs bought 42% of the homes in 2016, the Realtors found.”

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“Gascoigne calls the United States “the easiest place to set up an anonymous company to potentially launder your money.”

“Manhattan real estate lawyer Adam Leitman Bailey added, “Unlike securities brokers, we do not have a know-your-customer rule.”

“The Treasury Department has been under pressure for years from Congress and inter-national groups to crack down on money laundering that occurs through all-cash real-estate purchases. FinCEN has been considering a regulation since 2003 that would require people involved in real-estate closings, such as sales agents, lawyers, appraisers and title insurers, to scrutinize transactions for money laundering.”

“In a 2016 report on US anti-money laundering efforts, the Financial Action Task Force on Money Laundering, the leading intergovernmental body fighting money laundering, said that without such scrutiny, “There is a significant risk that high-end real estate is used for money laundering purposes.”

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“FinCEN took a first step in March 2016 when it began to investigate all-cash shell-company purchases of luxury homes in Manhattan and Miami-Dade County, Florida, which are the two markets where Trump has been most active. The agency defined luxury homes as those selling for at least $3 million in Manhattan and $1 million in Miami-Dade.”

“In July 2016, FinCEN released a startling finding: more than a quarter of the people who controlled the shell companies in Manhattan and Miami-Dade had at one time engaged in “possible criminal activity.”

“Trump condo sales reportedly are under scrutiny by special counsel Robert Mueller, whose team includes Justice Department prosecutor Kyle Freeny, a money-laundering expert. Mueller is investigating Trump’s connections to Russia and Russia’s interference in the 2016 presidential election. He charged former Trump campaign chairman Paul Manafort in October with laundering millions of dollars he received for work in Ukraine before joining the Trump campaign.”

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“The Senate intelligence committee has sought records in its Trump-Russia probe from FinCEN, which monitors possible money laundering. “Cash transactions are an increasingly important part of what needs to be examined,” Sen. Ron Wyden, a Democrat on the Senate intelligence committee, told BuzzFeed News. “I’m focused on following the money.” 

“Rep. Adam Schiff, the House intelligence committee’s ranking Democrat, said BuzzFeed News’ findings “concern me a great deal.” The committee should investigate whether “financial entanglement was one of the active measures the Russians used in the United States,” Schiff said. “It was one of the measures they’ve used in other countries.”

“Bloomberg News has reported that Mueller is investigating the Trump SoHo as well as “Russian purchases of apartments in Trump buildings.” Several news outlets have  reported that one of the Trump SoHo developers, Russia native Felix Sater, who pleaded guilty to racketeering in a money laundering case in 1998, testified recently before the House intelligence committee.”

“Former White House strategist Steve Bannon is quoted in Michael Wolff’s new book saying that Mueller’s investigation “is all about money laundering.” And the two founders of a research firm that commissioned a controversial intelligence dossier wrote in a New York Times op-ed that their investigation of Trump found “widespread evidence” that Trump had worked with “dubious Russians in arrangements that often raised questions about money laundering.”

See: Secret Money: How Trump Made Millions Selling Condos – BuzzFeed