During his time in office, former Mayor Michael Bloomberg was a cheerleader for encouraging the mega-wealthy to relocate to New York City.
“Wouldn’t it be great if we could get all the Russian billionaires to move here?” he told New York magazine in September.
Bloomberg’s dream might have come true, although in a less celebrated way than he possibly intended.
According to court records and secret documents obtained by the International Consortium of Investigative Journalists, Manhattan has become America’s own island haven for shady characters from overseas looking to funnel their wealth into the U.S. through New York’s luxury real estate industry.
Since 2008, roughly 30 percent of condo sales in pricey Manhattan developments have been to buyers who listed an international address or bought in the name of a limited liability company or some other corporate entity, a maneuver often employed by foreign purchasers.
Because many buyers go to great lengths to hide their interests in New York properties, it’s impossible to put a number on what proportion of buyers from overseas are laundering ill-gotten gains. Many act in an above-board manner and use tax loopholes that are legal in their home countries. But it’s clear that New York’s public officials and its real estate industry embrace the wealthy and powerful without much thought to where their money comes from.
Combine that give-us-your-rich ethos with state and local policies that lavish tax breaks on Manhattan’s wealthiest homeowners and federal policies that allow real estate agents to close their eyes to whether their clients are trafficking illicit money, and the results are predictable: New York is a magnet for the super-rich homebuyers from other lands bearing money of sometimes dubious provenance. The flood of foreign capital pouring into New York properties makes it easy for suspect figures to hide their fortunes amid Manhattan’s residential gold rush, according to money laundering experts, court documents and secret offshore records.
The lax standards that allow some foreigners to launder money through American real estate sometimes mean that Manhattan’s financial and cultural elite end up with some mysterious figures as their neighbors.
Read the full story on ICIJ.org.