4 ms·

You don't think all these owned, yet empty luxury apartments in cities isn't money laundering? Give me your occam's razor version then, because that's my take (

You don't think all these owned, yet empty luxury apartments in cities isn't money laundering? Give me your occam's razor version then, because that's my take (and clearly many other people think the same). What's the most likely explanation? In the UK there are loads of examples of this. Maybe the US is miles ahead of the UK on this, but somehow I doubt it. https://www.lawsociety.org.uk/topics/property/anti-money-laundering-in-property https://www.lawsociety.org.uk/topics/property/anti-money-lau... > Money laundering through property is a major problem And the example you give of a van full of cash is naive. That isn't how it goes down, and if I'm honest, I think you know that.

danaris 4y ago
I suspect you may be falling victim to the problem shown in XKCD 2501 [0]: "Well, I've paid a lot of attention to it, so I know all about money laundering, but the average person probably only knows one, maybe two basic methods." "And that a van full of cash never works, of course." "Of course!" [0] https://xkcd.com/2501/ https://xkcd.com/2501/
credit_guy 4y ago
Real estate transactions can be used for money laundering, but it's extremely unlikely this would happen for the cases discussed here. Here's two possible money laundering schemes involving real estate: 1. you buy a multi-unit and rent it out to a number of tenants. You tell them you like them so much that you'll charge them a bit below market price. You'll charge them $1000 per month, when the actual market price would be $1200. The only thing you ask is that theyt sign a contract for $1400/month. You tell them not to worry, they'll need to only pay $1000, the $1400 is a technicality for mortgage purposes, or whatever. Now, every month, when they pay you $1000, you add $400 that you have obtained separately from selling drugs, or some other criminal activity, and you got to the bank and deposit that. you have all the documents to show the source of your funds is legit. The bank inquires about this source of funds, as per the Anti-Money-Laundering regulations. But you're covered. 2. You buy run down properties with legit funds. Then you improve them significantly. You pay the contractors with cash (obtained illegally). Later, you sell the properties. You don't try to make a profit. All you care is the guys who buy the properties are absolutely spotless. Now the proceeds of the sales of the properties are clean. You just converted money spent on renovations in money received on property sales. The weak link in the system is the contractors who are ok with cash payments. Now it's your turn. Can you please come up with a plausible scenario where one would launder money via a $100 million apartment next to Central Park in New York City?
- guntherhermann 4y ago
  Here are some examples: https://crimeline.co.uk/wp-content/uploads/2017/07/Shreeve.pdf https://crimeline.co.uk/wp-content/uploads/2017/07/Shreeve.p... https://crimeline.co.uk/wp-content/uploads/2017/07/Rollins.pdf https://crimeline.co.uk/wp-content/uploads/2017/07/Rollins.p... http://www.bailii.org/ew/cases/EWCA/Crim/2006/2155.html http://www.bailii.org/ew/cases/EWCA/Crim/2006/2155.html I won't abide by your requirements (cash in a van / $100m property), because those weren't my initial arguments. Money fraud through property happens. Money fraud through luxury property happens. It happens. It's rife (In the UK, especially London). Maybe the US is ahead of the curve, but I remain skeptical. I didn't ask for you to give examples of how money fraud through property could happen, I asked for you to state the simplest explanation for all these empty luxury properties existing, that isn't explained through fraud. Who is buying them? It's corruption!
  - credit_guy 4y ago
    You are moving the goalposts. Initially you said money laundering, now you are saying fraud, or money fraud, whatever the difference would be. Or corruption. As for empty luxury properties. I live across a tower, which could be called supertall, since it's just a few feet shy of 800 ft. A penthouse unit is available for sale now for $40MM. It's not the absolute very high end of luxury, but it's very nearly there. It's nighttime now, and I can see the lights. About 80% of the units are lit. In the units on the lower floors, I can see people moving about. I think the whole thing about empty properties is mostly an urban legend. But on the other hand, until 2 years ago, I lived in an apartment where I could see directly a property owned by Leonardo DiCaprio. I've never seen the guy there. At most I could see various contractors doing various renovations, but never the actor himself. Can I ascribe the emptiness of the property to "corruption"? No. I think DiCaprio has enough money to afford to buy a unit in downtown Manhattan, and leave it empty. Are there other people like DiCaprio? Why not? The world is big. You asked me for my Occam's razor explanation. That's my Occam's razor. In our society, there's also another version of Occam's razor, and this one is a particular case of it: it's called "innocent until proven guilty", or "benefit of the doubt". I like it, and I use it. You can feel free to use the assumption of guilt. It's your prerogative.

danaris 4y ago

I suspect you may be falling victim to the problem shown in XKCD 2501 [0]: "Well, I've paid a lot of attention to it, so I know all about money laundering, but the average person probably only knows one, maybe two basic methods." "And that a van full of cash never works, of course." "Of course!" [0] https://xkcd.com/2501/ https://xkcd.com/2501/

credit_guy 4y ago

Real estate transactions can be used for money laundering, but it's extremely unlikely this would happen for the cases discussed here. Here's two possible money laundering schemes involving real estate: 1. you buy a multi-unit and rent it out to a number of tenants. You tell them you like them so much that you'll charge them a bit below market price. You'll charge them $1000 per month, when the actual market price would be $1200. The only thing you ask is that theyt sign a contract for $1400/month. You tell them not to worry, they'll need to only pay $1000, the $1400 is a technicality for mortgage purposes, or whatever. Now, every month, when they pay you $1000, you add $400 that you have obtained separately from selling drugs, or some other criminal activity, and you got to the bank and deposit that. you have all the documents to show the source of your funds is legit. The bank inquires about this source of funds, as per the Anti-Money-Laundering regulations. But you're covered. 2. You buy run down properties with legit funds. Then you improve them significantly. You pay the contractors with cash (obtained illegally). Later, you sell the properties. You don't try to make a profit. All you care is the guys who buy the properties are absolutely spotless. Now the proceeds of the sales of the properties are clean. You just converted money spent on renovations in money received on property sales. The weak link in the system is the contractors who are ok with cash payments. Now it's your turn. Can you please come up with a plausible scenario where one would launder money via a $100 million apartment next to Central Park in New York City?

guntherhermann 4y ago
Here are some examples: https://crimeline.co.uk/wp-content/uploads/2017/07/Shreeve.pdf https://crimeline.co.uk/wp-content/uploads/2017/07/Shreeve.p... https://crimeline.co.uk/wp-content/uploads/2017/07/Rollins.pdf https://crimeline.co.uk/wp-content/uploads/2017/07/Rollins.p... http://www.bailii.org/ew/cases/EWCA/Crim/2006/2155.html http://www.bailii.org/ew/cases/EWCA/Crim/2006/2155.html I won't abide by your requirements (cash in a van / $100m property), because those weren't my initial arguments. Money fraud through property happens. Money fraud through luxury property happens. It happens. It's rife (In the UK, especially London). Maybe the US is ahead of the curve, but I remain skeptical. I didn't ask for you to give examples of how money fraud through property could happen, I asked for you to state the simplest explanation for all these empty luxury properties existing, that isn't explained through fraud. Who is buying them? It's corruption!
- credit_guy 4y ago
  You are moving the goalposts. Initially you said money laundering, now you are saying fraud, or money fraud, whatever the difference would be. Or corruption. As for empty luxury properties. I live across a tower, which could be called supertall, since it's just a few feet shy of 800 ft. A penthouse unit is available for sale now for $40MM. It's not the absolute very high end of luxury, but it's very nearly there. It's nighttime now, and I can see the lights. About 80% of the units are lit. In the units on the lower floors, I can see people moving about. I think the whole thing about empty properties is mostly an urban legend. But on the other hand, until 2 years ago, I lived in an apartment where I could see directly a property owned by Leonardo DiCaprio. I've never seen the guy there. At most I could see various contractors doing various renovations, but never the actor himself. Can I ascribe the emptiness of the property to "corruption"? No. I think DiCaprio has enough money to afford to buy a unit in downtown Manhattan, and leave it empty. Are there other people like DiCaprio? Why not? The world is big. You asked me for my Occam's razor explanation. That's my Occam's razor. In our society, there's also another version of Occam's razor, and this one is a particular case of it: it's called "innocent until proven guilty", or "benefit of the doubt". I like it, and I use it. You can feel free to use the assumption of guilt. It's your prerogative.