4 ms·

What isn’t clear is how exactly is this laundering the money? How do they buy billions of RE for cash? If it’s not cash, then these must be traceable electroni

by moltar 8y ago

What isn’t clear is how exactly is this laundering the money? How do they buy billions of RE for cash? If it’s not cash, then these must be traceable electronic transactions? Why do they need to rent it? Seems like it’d take forever to launder the amount. Can’t they just buy and sell from each other? Buyer A buys one unit from B, sell to C. B buys from C sells to A. Etc.

olefoo 8y ago
There are plenty of banks that operate with rather flexible attitudes towards the onerous financial regulations most US residents are familiar with. Add in the archipelago of tax havens and opaque ownership structures and for criminals operating above a certain level; accessing the global financial system is less of a problem than you might think. The problem then becomes one of legitimizing money that was obtained through criminal means. And in this case the definition of criminal extends to otherwise legitimate enterprise carried out by actors who are under sanction from the US government.
toast0 8y ago
Buy real estate with clean money. Raise rents frequently and rapidly; once the current tenants leave, have pretend tenants that pay with dirty money. Voila, clean rent money, no need to maintain the building. Or buy real estate for some clean money, reported as the purchase amount, but also some dirty money, under the table. If you sell it, the you've got clean money for the difference between the reported sales price and the reported purchase price. You could even give the buyer dirty money to raise the sales price.
- expertentipp 8y ago
  > Buy real estate with clean money. Raise rents frequently and rapidly; once the current tenants leave, have pretend tenants that pay with dirty money. Voila, clean rent money, no need to maintain the building. This would explain so many empty buildings in Prague or Berlin, while skyrocketing rents in the available real estate.
- aristophenes 8y ago
  This is the first thing I read here, including the article, that actually makes any sense explaining how this might increase rents
  - pnongrata 8y ago
    If you buy apartments and don't rent it because it doesn't matter, you take away potentially rentable places, decreasing supply which increases rent for everyone.
    - aristophenes 8y ago
      This is very true. Also, not an argument made by this article.
bleriot 8y ago
This might explain it a little better: https://therealdeal.com/issues_articles/money-laundering/ https://therealdeal.com/issues_articles/money-laundering/
te_chris 8y ago
Dodgy banks giving mortgages to offshore companies mostly. Offshore jurisdiction has no reporting requirements of ownership. This is what makes London work - and how it's possible for unknown individuals to buy £16mil soho penthouses (partner was a private practice property lawyer).

by moltar 8y ago

olefoo 8y ago

There are plenty of banks that operate with rather flexible attitudes towards the onerous financial regulations most US residents are familiar with. Add in the archipelago of tax havens and opaque ownership structures and for criminals operating above a certain level; accessing the global financial system is less of a problem than you might think. The problem then becomes one of legitimizing money that was obtained through criminal means. And in this case the definition of criminal extends to otherwise legitimate enterprise carried out by actors who are under sanction from the US government.

toast0 8y ago

Buy real estate with clean money. Raise rents frequently and rapidly; once the current tenants leave, have pretend tenants that pay with dirty money. Voila, clean rent money, no need to maintain the building. Or buy real estate for some clean money, reported as the purchase amount, but also some dirty money, under the table. If you sell it, the you've got clean money for the difference between the reported sales price and the reported purchase price. You could even give the buyer dirty money to raise the sales price.

expertentipp 8y ago
> Buy real estate with clean money. Raise rents frequently and rapidly; once the current tenants leave, have pretend tenants that pay with dirty money. Voila, clean rent money, no need to maintain the building. This would explain so many empty buildings in Prague or Berlin, while skyrocketing rents in the available real estate.
aristophenes 8y ago
This is the first thing I read here, including the article, that actually makes any sense explaining how this might increase rents
- pnongrata 8y ago
  If you buy apartments and don't rent it because it doesn't matter, you take away potentially rentable places, decreasing supply which increases rent for everyone.
  - aristophenes 8y ago
    This is very true. Also, not an argument made by this article.

bleriot 8y ago

This might explain it a little better: https://therealdeal.com/issues_articles/money-laundering/ https://therealdeal.com/issues_articles/money-laundering/

te_chris 8y ago

Dodgy banks giving mortgages to offshore companies mostly. Offshore jurisdiction has no reporting requirements of ownership. This is what makes London work - and how it's possible for unknown individuals to buy £16mil soho penthouses (partner was a private practice property lawyer).