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Given the incredible amounts of dirty money that goes into global property/real estate there is an element of chutzpah about dinging crypto https://www.goodrea

Given the incredible amounts of dirty money that goes into global property/real estate there is an element of chutzpah about dinging crypto https://www.goodreads.com/book/show/1906500.McMafia https://www.goodreads.com/book/show/1906500.McMafia

drawkbox 8y ago
When they looked into high-end real-estate in 2016, up to 30% of all deals were suspicious of being money laundering. [1] They looked just primarily at New York, Miami, Los Angeles and other big markets. > The rules cover properties purchased for more than $3 million in Manhattan, properties over $1 million in the southern Florida locations, over $2 million in the California locations and more than $3 million in the Hawaii locations. > Treasury said that among the transactions covered by the rules over the past year "about 30 percent... involve a beneficial owner or purchaser representative that was also the subject of a previous suspicious activity report." It makes you wonder how much the real estate market is inflated due to money laundering and foreign funds flowing in for washing or investments, keeping real customers out of the market. Fact is money laundering is a problem in real-estate, art, crypto, political campaigns [2] (with Citizens United) and more. [1] https://www.cnbc.com/2017/08/24/a-third-of-luxe-real-estate-deals-involve-suspicious-activity.html https://www.cnbc.com/2017/08/24/a-third-of-luxe-real-estate-... [2] https://theintercept.com/2016/08/03/citizens-united-foreign-money-us-elections/ https://theintercept.com/2016/08/03/citizens-united-foreign-...
- gammateam 8y ago
  > subject of a suspicious activity report OH come on. Bank tellers file suspicious activity reports for any arbitrary reason. The only people these SARs ensnare are poor-ish people that accidentally structured a cash transaction and it looked like they were trying to avoid the $10,000 reporting threshold. I've read enough appeals court cases to see that it doesn't catch actual money laundering from illicit sources. And with the real estate industry successfully lobbying Congress from an exemption to anti-money laundering laws, I don't think these wealthy people will ever be investigated from a "Suspicious Activity Report" since there isn't a legal framework to further investigate.
  - drawkbox 8y ago
    Agreed on messing with small players and real estate getting favorable treatment, but did you miss the part where they were in million+ properties with shell corporations? > Treasury this week expanded and extended a program targeting luxury real estate deals in New York, Miami, Los Angeles and other big markets to prevent the use of real estate for money-laundering by overseas buyers. The program was designed to prevent buyers from using shell company's or LLC's to hide the identities of the real buyers.
    - gammateam 8y ago
      Yeah I remember when that article came out. Did it work? The federal government doesn't regulate what kind of business entities their states offer. And you can always use a lawyer on the incorporation forms if that state asks for more info and have your whole entity protected by client attorney privilege. There's no probable cause to raid the lawyer, and the money is magically clean in the property now.
- Retric 8y ago
  When you exclude the bulk of the market, saying the 1/3 of the remainder does not say much.
- snarf21 8y ago
  I was told that some of it isn't completely money laundering but the only way to get legitimate money out of countries like China.
- DINKDINK 8y ago
  >"about 30 percent... involve a beneficial owner or purchaser representative that was also the subject of a previous suspicious activity report." There are so many issues with conclusions like this but the simplest question to ask first is, "What's the SAR rate for the equivalent tronche of people who aren't involved in money laundering?". This analysis probably suffers from Berkson's Paradox: https://www.youtube.com/watch?v=daiEkxSaRlU https://www.youtube.com/watch?v=daiEkxSaRlU
lmm 8y ago
Cracking down on real estate (or metals, per another comment) has to be done carefully because there are legitimate reasons to want to own metals or real estate. There's no analogous legitimate reason you'd want to own a particular string of random numbers; evading the rule of law is the entire market in those.
- darawk 8y ago
  The desire to own large quantities of precious metals is definitely no more legitimate than the desire to own cryptocurrency.
  - geezerjay 8y ago
    I disagree. In the very least, precious metals are shiny and dont rust. You can't wear crypto.
    - lawn 8y ago
      It will look funny to wear gold bricks.
    - darawk 8y ago
      Sure, but you can't transmit gold cheaply and frictionlessly across national boundaries.
  - hueving 8y ago
    Precious metals have a very long history of protecting against inflation risk, which is why many investors own them. Crypto currency is not anywhere near that category because they haven't been around even 20 years and the prices suffer from severe instability.
dba7dba 8y ago
I also came in to comment about property/real estate being THE biggest and safest vehicle for hiding dirty money.

drawkbox 8y ago

When they looked into high-end real-estate in 2016, up to 30% of all deals were suspicious of being money laundering. [1] They looked just primarily at New York, Miami, Los Angeles and other big markets. > The rules cover properties purchased for more than $3 million in Manhattan, properties over $1 million in the southern Florida locations, over $2 million in the California locations and more than $3 million in the Hawaii locations. > Treasury said that among the transactions covered by the rules over the past year "about 30 percent... involve a beneficial owner or purchaser representative that was also the subject of a previous suspicious activity report." It makes you wonder how much the real estate market is inflated due to money laundering and foreign funds flowing in for washing or investments, keeping real customers out of the market. Fact is money laundering is a problem in real-estate, art, crypto, political campaigns [2] (with Citizens United) and more. [1] https://www.cnbc.com/2017/08/24/a-third-of-luxe-real-estate-deals-involve-suspicious-activity.html https://www.cnbc.com/2017/08/24/a-third-of-luxe-real-estate-... [2] https://theintercept.com/2016/08/03/citizens-united-foreign-money-us-elections/ https://theintercept.com/2016/08/03/citizens-united-foreign-...

gammateam 8y ago
> subject of a suspicious activity report OH come on. Bank tellers file suspicious activity reports for any arbitrary reason. The only people these SARs ensnare are poor-ish people that accidentally structured a cash transaction and it looked like they were trying to avoid the $10,000 reporting threshold. I've read enough appeals court cases to see that it doesn't catch actual money laundering from illicit sources. And with the real estate industry successfully lobbying Congress from an exemption to anti-money laundering laws, I don't think these wealthy people will ever be investigated from a "Suspicious Activity Report" since there isn't a legal framework to further investigate.
- drawkbox 8y ago
  Agreed on messing with small players and real estate getting favorable treatment, but did you miss the part where they were in million+ properties with shell corporations? > Treasury this week expanded and extended a program targeting luxury real estate deals in New York, Miami, Los Angeles and other big markets to prevent the use of real estate for money-laundering by overseas buyers. The program was designed to prevent buyers from using shell company's or LLC's to hide the identities of the real buyers.
  - gammateam 8y ago
    Yeah I remember when that article came out. Did it work? The federal government doesn't regulate what kind of business entities their states offer. And you can always use a lawyer on the incorporation forms if that state asks for more info and have your whole entity protected by client attorney privilege. There's no probable cause to raid the lawyer, and the money is magically clean in the property now.
Retric 8y ago
When you exclude the bulk of the market, saying the 1/3 of the remainder does not say much.
snarf21 8y ago
I was told that some of it isn't completely money laundering but the only way to get legitimate money out of countries like China.
DINKDINK 8y ago
>"about 30 percent... involve a beneficial owner or purchaser representative that was also the subject of a previous suspicious activity report." There are so many issues with conclusions like this but the simplest question to ask first is, "What's the SAR rate for the equivalent tronche of people who aren't involved in money laundering?". This analysis probably suffers from Berkson's Paradox: https://www.youtube.com/watch?v=daiEkxSaRlU https://www.youtube.com/watch?v=daiEkxSaRlU

lmm 8y ago

Cracking down on real estate (or metals, per another comment) has to be done carefully because there are legitimate reasons to want to own metals or real estate. There's no analogous legitimate reason you'd want to own a particular string of random numbers; evading the rule of law is the entire market in those.

darawk 8y ago
The desire to own large quantities of precious metals is definitely no more legitimate than the desire to own cryptocurrency.
- geezerjay 8y ago
  I disagree. In the very least, precious metals are shiny and dont rust. You can't wear crypto.
  - lawn 8y ago
    It will look funny to wear gold bricks.
  - darawk 8y ago
    Sure, but you can't transmit gold cheaply and frictionlessly across national boundaries.
- hueving 8y ago
  Precious metals have a very long history of protecting against inflation risk, which is why many investors own them. Crypto currency is not anywhere near that category because they haven't been around even 20 years and the prices suffer from severe instability.

dba7dba 8y ago

I also came in to comment about property/real estate being THE biggest and safest vehicle for hiding dirty money.