12 ms·

US real estate a safe haven for billions in dirty money, report says

216 points by warrenm 5y ago

myth_drannon 5y ago
Local politicians are addicted to this money, nothing will be done to prevent it. Look at Toronto and Vancouver.
- munk-a 5y ago
  At least in Vancouver there has been a pretty dramatic shift from the days of Christy Clark to try and raise the transparency of house ownership. We've still got a long way to go but it looks like those politicians are being shown the door.
- kevin_thibedeau 5y ago
  Wyoming builds its economy on it: https://www.wyomingpublicmedia.org/open-spaces/2015-08-14/a-decade-after-scandal-wyoming-is-once-again-a-hotspot-for-business-formation https://www.wyomingpublicmedia.org/open-spaces/2015-08-14/a-...
Grakel 5y ago
Non citizens should not be able to own property they never personally occupy.
- nickthegreek 5y ago
  At least an upper bound on how much they should be able to own would be nice.
  - Grakel 5y ago
    Yeah, as much as they can occupy. Every bedroom they have to personally sleep in for a month. :)
- rank0 5y ago
  What about a foreign business? Or even a domestic business owned by non-citizens?
  - Apocryphon 5y ago
    You know, why not? Why shouldn't local jurisdictions and communities have claim to that property and land that's laying fallow.
    - warrenm 5y ago
      Why shouldn't they? Because that's communism - where the state owns everything
      - Apocryphon 5y ago
        That's just eminent domain.
      - lukifer 5y ago
        Many of the OG "classical liberals" had a much more nuanced take on privatizing land, supporting something more like usage rights, rather than fee-simple or alloidal land titles (private enclosure of land beyond subsistence was associated with aristocracy): "All the property that is necessary to a man for the conservation of the individual and his propagation of the species is his natural right, which none can justly deprive him of; but all property superfluous to such purposes is the property of the public, who by their laws have created it, and who may therefore by other laws dispose of it, whenever the welfare of the public shall demand such disposition." - Benjamin Franklin "Whenever there is in any country, uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right. The earth is given as a common stock for man to labour and live on. If, for the encouragement of industry we allow it to be appropriated, we must take care that other employment be furnished to those excluded from the appropriation. If we do not the fundamental right to labour the earth returns to the unemployed." - Thomas Jefferson There is a wide range of middle-ground between the extremes of carving up the earth into micro-fiefdoms of absolute ownership, vs. all land being controlled by apparatchiks in the State Politburo. One of the most moderate is a tax on "ground rents", as proposed by Ricardo, Paine, and many others [0], to compensate the community for their exclusion, and fairly return the profits from "proximity value" (services and infrastructure that makes land more desirable). Even Milton Friedman referred to Land Value Tax as the "least worst tax" [1], with drastically reduced (if not zero!) "deadweight loss", compared to taxes on income or sales. [0] https://en.wikipedia.org/wiki/Ground_rent https://en.wikipedia.org/wiki/Ground_rent [1] https://www.youtube.com/watch?v=yS7Jb58hcsc https://www.youtube.com/watch?v=yS7Jb58hcsc
- gutitout 5y ago
  How about a vacancy tax?
  - brink 5y ago
    How about we stop trying to solve everything with more taxes? This kind of solution tends to hurt the less wealthy. The weight placed on the backs of the taxpayers is heavy enough.
    - munk-a 5y ago
      Vacancy taxes tend to only hit the wealthy. There are certainly regressive taxes we should examine (like sales tax on staple goods) but vacancy taxes tend to target high earners pretty effectively. Taxes are generally a good thing since they allow society to function well.
    - nathanvanfleet 5y ago
      Richer people own more property than poor people. You're using an old saw that says taxation is worse for the poor but it's not. It's also simple to give breaks for purchases under x dollars or redemptions or for family homes that are occupied etc.
      - pessimizer 5y ago
        > an old saw that says taxation is worse for the poor Is there one? Consumption taxes on are of course worse for the poor, but taxes on fiefdoms?
    - HWR_14 5y ago
      Vacancy taxes exclusively hurt the wealthy who aren't renting out their land. That should help the less wealthy who don't have idle land.
    - triceratops 5y ago
      Are there a lot of poor people leaving property they own vacant?
- warrenm 5y ago
  Why not?
- 908B64B197 5y ago
  Who should be able to buy this vacation house: Markus, Swedish born foreigner who moved to America with his wife to work at an academic research lab or Liang, born in Saipan thanks to birth tourism (so a natural born US Citizen), using the money his parents managed to get out of China to grab as much real estate as he can.
- __turbobrew__ 5y ago
  I think that goes too far, there should simply be a tax on any real estate not personally occupied by the owners — citizens and non citizens alike.
VirusNewbie 5y ago
This was incredibly apparent to me when I recently bought a house. The seller was foreign, and had picked and escrow company that hadn't been in business for long. I was originally worried it was a scam and someone was trying to run off with my money, but that wasn't the gig. The two owners of the escrow company had owned multiple other escrow companies that were shut down. No complaints against them, so it's not like they were taking people's money and running. The escrow 'company' didn't have any sort of need for a paper trail of where money came from when buying my house. I imagine if I had shown up with a suitcase full of cash speckled with blood and coke they wouldn't have cared. There's likely no record of where all the money came from for me, (tech money) nor any of the other foreign buyers they regularly service. They're likely shut down again and opened with a new name.
- OldHand2018 5y ago
  FYI, the seller didn't choose the escrow company. Either your agent/attorney or the seller's agent/attorney did. And you had the legal right to choose the company providing almost all of those services. Well, in most states you do. Federal law provides that you can choose a subset of them.
  - irrational 5y ago
    We recently sold a home. We did choose the escrow company. Neither we, nor the buyers, used an agent/attorney. We did the same thing when buying our new house. No agents or attorneys involved and the sellers chose the escrow company. These days, with the Internet, it really is tremendously easy to fill out all the paperwork correctly and do everything yourself. The total time we spent from beginning to end was a few hours total, which saved tens of thousands of dollars on each transaction. 10/10 I’d forgo using an agent/attorney next time as well.
    - topkai22 5y ago
      Not only that, you absolutely should shop the optional services (like title, escrow, etc.) We saved thousands in fees because me and my agent made a couple of phone calls to get competing bids after the seller (really the sellers agent) tried to direct us to a very expensive set of options.
wmf 5y ago
Due to a quirk in treaties, the US does not have to notify other countries about US assets held by non-US-citizens. This makes the US the ideal place to hide money for most of the world.
- gutitout 5y ago
  Ironic that as a US citizen they want to know and audit all accounts. Try opening a bank account in Switzerland with a US passport. The US goes so far that foreign banks would rather not deal with you at all. Says something about the way Citizens are viewed in this country.
  - wavefunction 5y ago
    I am unsympathetic to the reaction of Swiss banking officials who are apparently deeply emotionally affected by the imposition to report on the financial assets of wealthy people with financial interests in the US. Switzerland's history of providing financial services to the very worst people in the world is not much of a bush to hide behind.
    - kurthr 5y ago
      It's not just Switzerland. France also makes it so difficult to hold an account that it's not worth it. It's understandable since the paperwork they have to do is also enormous for the small profit they would make.
      - Tsarbomb 5y ago
        The only country where it is actually fairly simple is Canada, because Canadian banks already have the infrastructure to automatically tattle on you to Uncle Sam and the IRS.
        wiredfool 5y ago
        It wasn’t hard in Ireland when I got bank accounts here a few years back.
ordinaryradical 5y ago
You shouldn’t be able to buy property using an LLC. Real people’s legal names should be required on every transaction. If you’re later found to be facilitating a transaction for a money launderer you go to jail too. Bam, we just solved 80% of this problem.
- lotsofpulp 5y ago
  That is not feasible. What is feasible is simply making the owners of companies visible via a search on a government website.
  - mjmahone17 5y ago
    Why is requiring each property to have a named, non-LLC owner not feasible?
    - monkeywork 5y ago
      who should be marked down as the property owner of Apple's campus?
      - deleted 5y ago
        [deleted]
      - fzzzy 5y ago
        Tim Apple
        kube-system 5y ago
        He doesn't own Apple. The owners of some ~17 billions shares of AAPL own Apple.
        fzzzy 5y ago
        It was a joke. Tim Apple is not a person that exists.
norov 5y ago
When do people start protesting over all of the decent housing being gobbled up by those who are not living in these houses?
- comeonseriously 5y ago
  My guess? Sooner rather than later. I think a LOT of things are going to come to a head sooner rather than later. Even those of us who make good money should be worrying about the direction things are going.
  - simonh 5y ago
    Employment is up, wages are up, booze is cheap.
    - vosper 5y ago
      And young people, oftn the most screwed over by housing and employment conditions, still don't vote https://www.nytimes.com/2020/10/08/upshot/youth-voting-2020-election.html https://www.nytimes.com/2020/10/08/upshot/youth-voting-2020-... (probably that's part of why they're the most screwed over)
    - comeonseriously 5y ago
      Wages are up. But inflation has eaten that and more away, so in terms of real money, wages at best are flat and at worse have gone down.
  - deleted 5y ago
    [deleted]
- warrenm 5y ago
  Who cares who's buying it? What do you have against people buying a property and then renting it out?
  - gambiting 5y ago
swiley 5y ago
And the government has the nerve to come after software devs for some tiny fraction of this. Some days I feel like the anarchists are right.
- esalman 5y ago
  It is easier to harass the weak.
  - someguydave 5y ago
    It is easier to harass the obedient and honest. But there comes a point where they have enough and leave.
fock 5y ago
Germany too: https://www.oh-projekt.com/ https://www.oh-projekt.com/ - owned by Ajmal Rahmani [1], Afghan MP, son of Mir Rahman Rahmani, speaker of the Afghan parliament. Nephew to a Northern Alliance general - Baba Jan - who conveniently held a part of Bagram airbase until 2001, so that he supposedly had a nice jumpstart for his trucking business. Trucking business got fined for some millions of dollars after he bribed his way to US army officials (10k/month) [2,3]. Noone cares, probably because he has bought a cypriotic passport [4] – yet every politician wants to tackle real estate price (certainly not lowered by blood money searching for a safe haven) and feels a duty to the poor Afghan people. [1] this links his person with OH-Projekt https://politis.com.cy/politis-news/kypros/o-entimotatos-thorakismenos-sympolitis-mas-ajmal-rahmani/ https://politis.com.cy/politis-news/kypros/o-entimotatos-tho... - given that there's probably not that many Afghans with the same name and the 100+ Mio€ in cash to do these projects... [2] https://www.thenation.com/article/archive/how-us-funds-taliban/ https://www.thenation.com/article/archive/how-us-funds-talib... [3] https://www.justice.gov/opa/pr/two-afghan-companies-plead-guilty-bribing-us-officials-and-agree-pay-44-million-fines https://www.justice.gov/opa/pr/two-afghan-companies-plead-gu... [4] https://www.aljazeera.com/news/2020/8/28/exclusive-cyprus-sold-passports-to-politically-exposed-persons https://www.aljazeera.com/news/2020/8/28/exclusive-cyprus-so...
mensetmanusman 5y ago
This is an amazing companion article from the Atlantic: https://www.google.com/amp/s/amp.theatlantic.com/amp/article/580471/ https://www.google.com/amp/s/amp.theatlantic.com/amp/article... It’s sad that our leaders let America be abused like this to enrich themselves.
- macinjosh 5y ago
  All leaders are human. All humans are flawed. This is why government is always corrupted in someway. There is no way around it. Additionally, the humans who fancy themselves as not flawed to the point where they are able to effectively lead and decide for others is a major red flag that they are not. Which to me is the great irony of democracy.
- VWWHFSfQ 5y ago
  Non-AMP link (if you're a subscriber): https://www.theatlantic.com/magazine/archive/2019/03/how-kleptocracy-came-to-america/580471/ https://www.theatlantic.com/magazine/archive/2019/03/how-kle...
bpodgursky 5y ago
We could solve every problem mentioned in these comments by just building a lot more houses. Housing scarcity makes it an investment asset. Make that not true.
- AnimalMuppet 5y ago
  And as long as people keep buying them up for investments, keep building more. Just keep taking their money, and keep building enough that their investment keeps going down in value. Eventually they'll stop. And along the way, you'll also help people who can't afford housing. There are two problems with this approach. One, a whole lot of people have the value of their home as part of their retirement plan. If you start driving that down as a deliberate policy, they aren't going to be happy. Two, we're currently facing a major shortage of building materials.
poulsbohemian 5y ago
As a licensed real estate agent in two states, I've got some familiarity with the topics at play in this article and discussion, but I'm not really clear on the point of the article. Can real estate be used to hide ill-gotten gains? Sure, as I'm sure plenty of other schemes can as well. What's interesting is that this article makes no mention of FIRPTA (IE: when they sell it they are going to get taxed on it) and each of the examples they give seem to be of someone who was eventually arrested or sanctioned (IE: the system is working as expected). Escrow has come up several times in this discussion, as have the responsibilities of buyers and sellers... so look, at least in the two states where I do business, the selection of an escrow company is the mutual agreement of buyer and seller. In fact in some places a real estate agent can even act as your closing agent in place of an escrow company, if that's really what you want. Escrow is there to act as a neutral third party, and so long as you have proof of funds to close, it's generally irrelevant to them where those funds came from so long as it meets the conditions of the contract. Several people in this thread have voiced the opinion that escrow should have greater responsibilities related to KYC, but that would be a significant shift in their responsibilities and really opens some interesting cans of worms. If you have reason to suspect your escrow company is operating in a questionable way, there are state agencies to provide oversight. What's maybe the more interesting angle to the topics of this article are the number of parties working to make real estate a completely automated process, IE: I click a button and I magically buy a property. As it stands, transactions generally have a lot of humans eyes on them, and when things don't look right (IE: fraud) it's that human attention that flags things, and I'm not sure (even as a former software engineer) how technology would have flagged some of the scenarios I've encountered. Regarding people who were able to do the paperwork yourself and get the transaction through to a successful closing without issue, go buy a lottery ticket because your story is not typical - there's a reason why real estate agents and real estate attorneys exist. I spend an insane number of hours each week handholding buyers and sellers through complex transactions. The paperwork is the "easy" part, and it can still get you sued if someone forgets a checkbox. Water rights, property boundaries, zoning, feasibility, trade fixtures... it's incredible how many things I have to assist with, and there's absolutely no such thing as a "typical" transaction.
esalman 5y ago
US immigration system is fundamentally broken. You'll be asked no question about your source of income if you buy property in excess of half a million dollars- you'll get expedited green card service instead. People with black money all over the world make use of such loopholes- and guess what- they continue to screw US once they are here. Meanwhile you have hundreds of thousands of hard-working individuals with clean tax records and no criminal history in immigration limbo for 10-20 years- many of whom never get back any of the SS or medicare tax they contribute.
- credit_guy 5y ago
  >> if you buy property in excess of half a million dollars- you'll get expedited green card service instead It’s not quite like that. You need to create jobs. At least 10 of them [1]: “ aliens who have invested or are actively in the process of investing $1 million (or $500,000 in targeted employment areas) in a new commercial enterprise that will benefit the U.S. economy and create at least 10 full-time positions for qualifying employees. These aliens are also called ‘EB-5 immigrant investors’ “. [1] https://www.uscis.gov/green-card/green-card-eligibility/green-card-for-immigrant-investors https://www.uscis.gov/green-card/green-card-eligibility/gree...
  - esalman 5y ago
    Technically you are right. I'm saying it is rife with abuse though- https://cis.org/Report/Map-Sites-EB5-Visa-Fraud-and-Folly-United-States https://cis.org/Report/Map-Sites-EB5-Visa-Fraud-and-Folly-Un...
    - credit_guy 5y ago
      The Constitution protects the private property. Yet, every year there are a number of burglaries. Does it follow the Constitution encourages the burglars?
      - esalman 5y ago
        The burglars are not taking advantage of a loophole in the constitution though. Let me give you an example- some investors bypass the employment provision mentioned here by presenting construction workers, or even tenants on the property as employees.
tzone 5y ago
I sometimes wonder how many of the commenters actually read the article itself. All the discussion in comments is about residential properties when in the article it clearly says: " Another concern the report outlines is that the U.S. anti-money laundering regime is focused on residential purchases, when a significant portion of the cases GFI reviewed involve commercial real estate transactions. " Or another: “When you talk about residential real estate, the heart of it is identifying who is the beneficial owner, [because] if you find out who the beneficial owner is, it also tells you who the criminal is,” Kumar told ICIJ. “In a commercial real estate investment, you don’t have to own the majority stake to be a criminal. You can own 2% of a $500 million property, and you are [still] laundering millions through it.”
- didntknowya 5y ago
  more just showing the subconscious xenophobia that exists- i.e. i don't approve of my foreign neighbor so there must be something shady going on
- jl2718 5y ago
  Does this explain WeWork?
  - tim333 5y ago
    I don't think WeWork was involved with that kind of stuff. Now >Eric Trump in 2014: 'We have all the funding we need out of Russia' is more questionable.
aceon48 5y ago
Duh
curation 5y ago
This is what real estate is for; they are and have been all my life stocks. We are ruled by Market Logic so that everything becomes quantified (Mbembe Necropolitics) including the Public Commons of Human Shelter.
- rualca 5y ago
  > We are ruled by Market Logic so that everything becomes quantified (Mbembe Necropolitics) including the Public Commons of Human Shelter. Things like public commons of human shelter do have a cost, as they require allocating and spending resources to build and maintain and to exist. If you need to buy materials to build and/or pay someone to work on it, whether to build it or maintain it, then it has a quantifiable cost.

216 points by warrenm 5y ago

myth_drannon 5y ago

Local politicians are addicted to this money, nothing will be done to prevent it. Look at Toronto and Vancouver.

munk-a 5y ago
At least in Vancouver there has been a pretty dramatic shift from the days of Christy Clark to try and raise the transparency of house ownership. We've still got a long way to go but it looks like those politicians are being shown the door.
kevin_thibedeau 5y ago
Wyoming builds its economy on it: https://www.wyomingpublicmedia.org/open-spaces/2015-08-14/a-decade-after-scandal-wyoming-is-once-again-a-hotspot-for-business-formation https://www.wyomingpublicmedia.org/open-spaces/2015-08-14/a-...

Grakel 5y ago

Non citizens should not be able to own property they never personally occupy.

nickthegreek 5y ago
At least an upper bound on how much they should be able to own would be nice.
- Grakel 5y ago
  Yeah, as much as they can occupy. Every bedroom they have to personally sleep in for a month. :)
rank0 5y ago
What about a foreign business? Or even a domestic business owned by non-citizens?
- Apocryphon 5y ago
  You know, why not? Why shouldn't local jurisdictions and communities have claim to that property and land that's laying fallow.
  - warrenm 5y ago
    Why shouldn't they? Because that's communism - where the state owns everything
    - Apocryphon 5y ago
      That's just eminent domain.
    - lukifer 5y ago
      Many of the OG "classical liberals" had a much more nuanced take on privatizing land, supporting something more like usage rights, rather than fee-simple or alloidal land titles (private enclosure of land beyond subsistence was associated with aristocracy): "All the property that is necessary to a man for the conservation of the individual and his propagation of the species is his natural right, which none can justly deprive him of; but all property superfluous to such purposes is the property of the public, who by their laws have created it, and who may therefore by other laws dispose of it, whenever the welfare of the public shall demand such disposition." - Benjamin Franklin "Whenever there is in any country, uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right. The earth is given as a common stock for man to labour and live on. If, for the encouragement of industry we allow it to be appropriated, we must take care that other employment be furnished to those excluded from the appropriation. If we do not the fundamental right to labour the earth returns to the unemployed." - Thomas Jefferson There is a wide range of middle-ground between the extremes of carving up the earth into micro-fiefdoms of absolute ownership, vs. all land being controlled by apparatchiks in the State Politburo. One of the most moderate is a tax on "ground rents", as proposed by Ricardo, Paine, and many others [0], to compensate the community for their exclusion, and fairly return the profits from "proximity value" (services and infrastructure that makes land more desirable). Even Milton Friedman referred to Land Value Tax as the "least worst tax" [1], with drastically reduced (if not zero!) "deadweight loss", compared to taxes on income or sales. [0] https://en.wikipedia.org/wiki/Ground_rent https://en.wikipedia.org/wiki/Ground_rent [1] https://www.youtube.com/watch?v=yS7Jb58hcsc https://www.youtube.com/watch?v=yS7Jb58hcsc
gutitout 5y ago
How about a vacancy tax?
- brink 5y ago
  How about we stop trying to solve everything with more taxes? This kind of solution tends to hurt the less wealthy. The weight placed on the backs of the taxpayers is heavy enough.
  - munk-a 5y ago
    Vacancy taxes tend to only hit the wealthy. There are certainly regressive taxes we should examine (like sales tax on staple goods) but vacancy taxes tend to target high earners pretty effectively. Taxes are generally a good thing since they allow society to function well.
  - nathanvanfleet 5y ago
    Richer people own more property than poor people. You're using an old saw that says taxation is worse for the poor but it's not. It's also simple to give breaks for purchases under x dollars or redemptions or for family homes that are occupied etc.
    - pessimizer 5y ago
      > an old saw that says taxation is worse for the poor Is there one? Consumption taxes on are of course worse for the poor, but taxes on fiefdoms?
  - HWR_14 5y ago
    Vacancy taxes exclusively hurt the wealthy who aren't renting out their land. That should help the less wealthy who don't have idle land.
  - triceratops 5y ago
    Are there a lot of poor people leaving property they own vacant?
warrenm 5y ago
Why not?
908B64B197 5y ago
Who should be able to buy this vacation house: Markus, Swedish born foreigner who moved to America with his wife to work at an academic research lab or Liang, born in Saipan thanks to birth tourism (so a natural born US Citizen), using the money his parents managed to get out of China to grab as much real estate as he can.
__turbobrew__ 5y ago
I think that goes too far, there should simply be a tax on any real estate not personally occupied by the owners — citizens and non citizens alike.

VirusNewbie 5y ago

This was incredibly apparent to me when I recently bought a house. The seller was foreign, and had picked and escrow company that hadn't been in business for long. I was originally worried it was a scam and someone was trying to run off with my money, but that wasn't the gig. The two owners of the escrow company had owned multiple other escrow companies that were shut down. No complaints against them, so it's not like they were taking people's money and running. The escrow 'company' didn't have any sort of need for a paper trail of where money came from when buying my house. I imagine if I had shown up with a suitcase full of cash speckled with blood and coke they wouldn't have cared. There's likely no record of where all the money came from for me, (tech money) nor any of the other foreign buyers they regularly service. They're likely shut down again and opened with a new name.

OldHand2018 5y ago
FYI, the seller didn't choose the escrow company. Either your agent/attorney or the seller's agent/attorney did. And you had the legal right to choose the company providing almost all of those services. Well, in most states you do. Federal law provides that you can choose a subset of them.
- irrational 5y ago
  We recently sold a home. We did choose the escrow company. Neither we, nor the buyers, used an agent/attorney. We did the same thing when buying our new house. No agents or attorneys involved and the sellers chose the escrow company. These days, with the Internet, it really is tremendously easy to fill out all the paperwork correctly and do everything yourself. The total time we spent from beginning to end was a few hours total, which saved tens of thousands of dollars on each transaction. 10/10 I’d forgo using an agent/attorney next time as well.
  - topkai22 5y ago
    Not only that, you absolutely should shop the optional services (like title, escrow, etc.) We saved thousands in fees because me and my agent made a couple of phone calls to get competing bids after the seller (really the sellers agent) tried to direct us to a very expensive set of options.

wmf 5y ago

Due to a quirk in treaties, the US does not have to notify other countries about US assets held by non-US-citizens. This makes the US the ideal place to hide money for most of the world.

gutitout 5y ago
Ironic that as a US citizen they want to know and audit all accounts. Try opening a bank account in Switzerland with a US passport. The US goes so far that foreign banks would rather not deal with you at all. Says something about the way Citizens are viewed in this country.
- wavefunction 5y ago
  I am unsympathetic to the reaction of Swiss banking officials who are apparently deeply emotionally affected by the imposition to report on the financial assets of wealthy people with financial interests in the US. Switzerland's history of providing financial services to the very worst people in the world is not much of a bush to hide behind.
  - kurthr 5y ago
    It's not just Switzerland. France also makes it so difficult to hold an account that it's not worth it. It's understandable since the paperwork they have to do is also enormous for the small profit they would make.
    - Tsarbomb 5y ago
      The only country where it is actually fairly simple is Canada, because Canadian banks already have the infrastructure to automatically tattle on you to Uncle Sam and the IRS.
      - wiredfool 5y ago
        It wasn’t hard in Ireland when I got bank accounts here a few years back.

ordinaryradical 5y ago

You shouldn’t be able to buy property using an LLC. Real people’s legal names should be required on every transaction. If you’re later found to be facilitating a transaction for a money launderer you go to jail too. Bam, we just solved 80% of this problem.

lotsofpulp 5y ago
That is not feasible. What is feasible is simply making the owners of companies visible via a search on a government website.
- mjmahone17 5y ago
  Why is requiring each property to have a named, non-LLC owner not feasible?
  - monkeywork 5y ago
    who should be marked down as the property owner of Apple's campus?
    - deleted 5y ago
      [deleted]
    - fzzzy 5y ago
      Tim Apple
      - kube-system 5y ago
        He doesn't own Apple. The owners of some ~17 billions shares of AAPL own Apple.
        fzzzy 5y ago
        It was a joke. Tim Apple is not a person that exists.

norov 5y ago

When do people start protesting over all of the decent housing being gobbled up by those who are not living in these houses?

comeonseriously 5y ago
My guess? Sooner rather than later. I think a LOT of things are going to come to a head sooner rather than later. Even those of us who make good money should be worrying about the direction things are going.
- simonh 5y ago
  Employment is up, wages are up, booze is cheap.
  - vosper 5y ago
    And young people, oftn the most screwed over by housing and employment conditions, still don't vote https://www.nytimes.com/2020/10/08/upshot/youth-voting-2020-election.html https://www.nytimes.com/2020/10/08/upshot/youth-voting-2020-... (probably that's part of why they're the most screwed over)
  - comeonseriously 5y ago
    Wages are up. But inflation has eaten that and more away, so in terms of real money, wages at best are flat and at worse have gone down.
- deleted 5y ago
  [deleted]
warrenm 5y ago
Who cares who's buying it? What do you have against people buying a property and then renting it out?
- gambiting 5y ago

swiley 5y ago

And the government has the nerve to come after software devs for some tiny fraction of this. Some days I feel like the anarchists are right.

esalman 5y ago
It is easier to harass the weak.
- someguydave 5y ago
  It is easier to harass the obedient and honest. But there comes a point where they have enough and leave.

fock 5y ago

Germany too: https://www.oh-projekt.com/ https://www.oh-projekt.com/ - owned by Ajmal Rahmani [1], Afghan MP, son of Mir Rahman Rahmani, speaker of the Afghan parliament. Nephew to a Northern Alliance general - Baba Jan - who conveniently held a part of Bagram airbase until 2001, so that he supposedly had a nice jumpstart for his trucking business. Trucking business got fined for some millions of dollars after he bribed his way to US army officials (10k/month) [2,3]. Noone cares, probably because he has bought a cypriotic passport [4] – yet every politician wants to tackle real estate price (certainly not lowered by blood money searching for a safe haven) and feels a duty to the poor Afghan people. [1] this links his person with OH-Projekt https://politis.com.cy/politis-news/kypros/o-entimotatos-thorakismenos-sympolitis-mas-ajmal-rahmani/ https://politis.com.cy/politis-news/kypros/o-entimotatos-tho... - given that there's probably not that many Afghans with the same name and the 100+ Mio€ in cash to do these projects... [2] https://www.thenation.com/article/archive/how-us-funds-taliban/ https://www.thenation.com/article/archive/how-us-funds-talib... [3] https://www.justice.gov/opa/pr/two-afghan-companies-plead-guilty-bribing-us-officials-and-agree-pay-44-million-fines https://www.justice.gov/opa/pr/two-afghan-companies-plead-gu... [4] https://www.aljazeera.com/news/2020/8/28/exclusive-cyprus-sold-passports-to-politically-exposed-persons https://www.aljazeera.com/news/2020/8/28/exclusive-cyprus-so...

mensetmanusman 5y ago

This is an amazing companion article from the Atlantic: https://www.google.com/amp/s/amp.theatlantic.com/amp/article/580471/ https://www.google.com/amp/s/amp.theatlantic.com/amp/article... It’s sad that our leaders let America be abused like this to enrich themselves.

macinjosh 5y ago
All leaders are human. All humans are flawed. This is why government is always corrupted in someway. There is no way around it. Additionally, the humans who fancy themselves as not flawed to the point where they are able to effectively lead and decide for others is a major red flag that they are not. Which to me is the great irony of democracy.
VWWHFSfQ 5y ago
Non-AMP link (if you're a subscriber): https://www.theatlantic.com/magazine/archive/2019/03/how-kleptocracy-came-to-america/580471/ https://www.theatlantic.com/magazine/archive/2019/03/how-kle...

bpodgursky 5y ago

We could solve every problem mentioned in these comments by just building a lot more houses. Housing scarcity makes it an investment asset. Make that not true.

AnimalMuppet 5y ago
And as long as people keep buying them up for investments, keep building more. Just keep taking their money, and keep building enough that their investment keeps going down in value. Eventually they'll stop. And along the way, you'll also help people who can't afford housing. There are two problems with this approach. One, a whole lot of people have the value of their home as part of their retirement plan. If you start driving that down as a deliberate policy, they aren't going to be happy. Two, we're currently facing a major shortage of building materials.

poulsbohemian 5y ago

As a licensed real estate agent in two states, I've got some familiarity with the topics at play in this article and discussion, but I'm not really clear on the point of the article. Can real estate be used to hide ill-gotten gains? Sure, as I'm sure plenty of other schemes can as well. What's interesting is that this article makes no mention of FIRPTA (IE: when they sell it they are going to get taxed on it) and each of the examples they give seem to be of someone who was eventually arrested or sanctioned (IE: the system is working as expected). Escrow has come up several times in this discussion, as have the responsibilities of buyers and sellers... so look, at least in the two states where I do business, the selection of an escrow company is the mutual agreement of buyer and seller. In fact in some places a real estate agent can even act as your closing agent in place of an escrow company, if that's really what you want. Escrow is there to act as a neutral third party, and so long as you have proof of funds to close, it's generally irrelevant to them where those funds came from so long as it meets the conditions of the contract. Several people in this thread have voiced the opinion that escrow should have greater responsibilities related to KYC, but that would be a significant shift in their responsibilities and really opens some interesting cans of worms. If you have reason to suspect your escrow company is operating in a questionable way, there are state agencies to provide oversight. What's maybe the more interesting angle to the topics of this article are the number of parties working to make real estate a completely automated process, IE: I click a button and I magically buy a property. As it stands, transactions generally have a lot of humans eyes on them, and when things don't look right (IE: fraud) it's that human attention that flags things, and I'm not sure (even as a former software engineer) how technology would have flagged some of the scenarios I've encountered. Regarding people who were able to do the paperwork yourself and get the transaction through to a successful closing without issue, go buy a lottery ticket because your story is not typical - there's a reason why real estate agents and real estate attorneys exist. I spend an insane number of hours each week handholding buyers and sellers through complex transactions. The paperwork is the "easy" part, and it can still get you sued if someone forgets a checkbox. Water rights, property boundaries, zoning, feasibility, trade fixtures... it's incredible how many things I have to assist with, and there's absolutely no such thing as a "typical" transaction.

esalman 5y ago

US immigration system is fundamentally broken. You'll be asked no question about your source of income if you buy property in excess of half a million dollars- you'll get expedited green card service instead. People with black money all over the world make use of such loopholes- and guess what- they continue to screw US once they are here. Meanwhile you have hundreds of thousands of hard-working individuals with clean tax records and no criminal history in immigration limbo for 10-20 years- many of whom never get back any of the SS or medicare tax they contribute.

credit_guy 5y ago
>> if you buy property in excess of half a million dollars- you'll get expedited green card service instead It’s not quite like that. You need to create jobs. At least 10 of them [1]: “ aliens who have invested or are actively in the process of investing $1 million (or $500,000 in targeted employment areas) in a new commercial enterprise that will benefit the U.S. economy and create at least 10 full-time positions for qualifying employees. These aliens are also called ‘EB-5 immigrant investors’ “. [1] https://www.uscis.gov/green-card/green-card-eligibility/green-card-for-immigrant-investors https://www.uscis.gov/green-card/green-card-eligibility/gree...
- esalman 5y ago
  Technically you are right. I'm saying it is rife with abuse though- https://cis.org/Report/Map-Sites-EB5-Visa-Fraud-and-Folly-United-States https://cis.org/Report/Map-Sites-EB5-Visa-Fraud-and-Folly-Un...
  - credit_guy 5y ago
    The Constitution protects the private property. Yet, every year there are a number of burglaries. Does it follow the Constitution encourages the burglars?
    - esalman 5y ago
      The burglars are not taking advantage of a loophole in the constitution though. Let me give you an example- some investors bypass the employment provision mentioned here by presenting construction workers, or even tenants on the property as employees.

tzone 5y ago

I sometimes wonder how many of the commenters actually read the article itself. All the discussion in comments is about residential properties when in the article it clearly says: " Another concern the report outlines is that the U.S. anti-money laundering regime is focused on residential purchases, when a significant portion of the cases GFI reviewed involve commercial real estate transactions. " Or another: “When you talk about residential real estate, the heart of it is identifying who is the beneficial owner, [because] if you find out who the beneficial owner is, it also tells you who the criminal is,” Kumar told ICIJ. “In a commercial real estate investment, you don’t have to own the majority stake to be a criminal. You can own 2% of a $500 million property, and you are [still] laundering millions through it.”

didntknowya 5y ago
more just showing the subconscious xenophobia that exists- i.e. i don't approve of my foreign neighbor so there must be something shady going on
jl2718 5y ago
Does this explain WeWork?
- tim333 5y ago
  I don't think WeWork was involved with that kind of stuff. Now >Eric Trump in 2014: 'We have all the funding we need out of Russia' is more questionable.

aceon48 5y ago

Duh

curation 5y ago

This is what real estate is for; they are and have been all my life stocks. We are ruled by Market Logic so that everything becomes quantified (Mbembe Necropolitics) including the Public Commons of Human Shelter.

rualca 5y ago
> We are ruled by Market Logic so that everything becomes quantified (Mbembe Necropolitics) including the Public Commons of Human Shelter. Things like public commons of human shelter do have a cost, as they require allocating and spending resources to build and maintain and to exist. If you need to buy materials to build and/or pay someone to work on it, whether to build it or maintain it, then it has a quantifiable cost.