Real Estate Marketing & Beyond
An article in the New York Post examines just who is investing in real estate in the city. It points out that in the past the US was instrumental in getting countries like Switzerland, who were famous for allowing money-laundering through number bank accounts, to turn things around.
Now things are quite different in Switzerland but New York City has become an increasingly safe haven for dirty money, due to the use of shell companies. The article points out that the increase in the use of such shell companies is troubling. During the past five years approximately $8 billion worth of apartments worth $5 million or more have been purchased. This amount is three times higher than the years before. Even more concerning is the fact that half of these properties have been bought for cash and have been purchased through shell companies allowing the person or persons behind the company to remain unknown.
New York City
Unlike Swiss banks who must legally know who their clients are, things are quite different in the United States where there is no legal need for lawyers and real estate developers to find out who they are dealing with. Thankfully the federal government is now beginning to close this legal loophole and the US Treasury Department has announced the creation of a public ownership registry in New York City and Miami. If this scheme is successful, it may eventually be implemented nationwide. Even though the New York Post obviously thinks this is a good thing, it does feel that this kind of secrecy should have been made illegal a long time ago As not only does it hide the identity of the persons concerned but it makes investigations or seizures of property nearly impossible.
In spite of increasing demand by law enforcement officials to change the situation, up until now it has been largely ignored due to lobbying by accounting, real estate and legal industries. These shell companies not only hide dodgy overseas buyers, but also enabled American criminals to hide their money. Many of these are people who have defrauded Medicare, made illegal contributions to American political candidates and embezzled money from public schools, or from the elderly.
The end to secrecy over buying property in the US has considerable support as one concern is that countries where money is out flowing are becoming destabilized while those countries receiving the illicit cash are developing property bubbles and the high cost of housing is pricing out ordinary residents.
Photo Credit: Dezalb via pixabay
