Pandora Papers ties Miami multifamily investor to offshore trusts linked to disgraced Catholic order

Pensam Capital allegedly received $14M from offshore trusts tied to Legion of Christ

Miami /
Oct.October 05, 2021 06:00 PM
1 South Pine Island Road in Plantation, FL (Nottingham Pine, Getty)

1 South Pine Island Road in Plantation, FL (Nottingham Pine, Getty)

UPDATED, Oct. 6, 3:25 p.m.: A Miami-based multifamily investment firm received $14 million for its properties from offshore trusts tied to a disgraced Catholic order still reeling from past revelations of pedophilia, the Pandora Papers revealed.

Pensam Capital received the investments from two New Zealand trusts linked to the Legion of Christ for at least eight apartment complexes Pensam purchased in Florida, Texas, Indiana, Illinois and Iowa, according to the International Consortium of Investigative Journalists.

ICIJ coordinated the investigation based on a trove of 11.9 million previously confidential records. The records link current and former heads of state, celebrities and others to offshore trusts secretly holding hundreds of millions of dollars in assets on their behalf and, in some cases, funneling money into investments, including real estate.

In the latest revelation, two trusts linked to Legion of Christ — AlfaOmega Trust and Salus Trust — were set up in New Zealand sometime after 2010, when the Vatican said it would seize operations of the order and start an investigation into sexual abuse allegations. The trusts then allegedly funneled money into various investment opportunities, including Pensam’s properties. In some cases, the trusts used Delaware-registered limited liability companies, such as when they funneled $2 million into a Plantation multifamily complex that was owned until recently by Pensam.

ICIJ does not identify the apartment community, only saying it was sold in June for $46 million. The Real Deal reported that Pensam sold a multifamily complex at 1 South Pine Island Road in Plantation for that price, also in June.

Although the revelations do not point to anything nefarious or illegal, they show that the Legion of Christ was well-heeled at a time when victims of sexual abuse by priests were fighting in court for payouts. Its two trusts held roughly $300 million, according to ICIJ.

The investigation also shows that U.S. real estate companies such as Pensam benefit from pools of money from deep-pocketed investors and promise them good returns, with Pensam pegging its target rate of return at roughly 15 percent, according to ICIJ.

At the same time, these real estate companies employ aggressive tactics such as charging high fees for late rent and filing evictions against their low- and middle-income renters. Dozens of former and current Pensam tenants told ICIJ that management at the communities was slow to respond to problems like mold and mildew, dangerous elevators, broken appliances and flooding. But when renters were late on rent, Pensam and BH Management Service, its management partner on many of its properties, were quick to push for evictions, and add steep fees for late rent, according to ICIJ’s review of court records.

In its response to ICIJ, Pensam said it has not received any indication showing its investors are led by the Legion of Christ.

Pensam “adheres to a comprehensive ‘know your customer’ compliance program when analyzing whether to accept a new investor or continue a relationship with an existing investor,” the company said in its statement. Pensam “did not, and has not, received any information that would lead Pensam to believe that any of its investors have been or are currently governed or managed by the Legion of Christ.”

A spokesperson for BH Management Services told ICIJ that the management company is “responsible for coordinating rent collection from tenants, which we do under strict adherence of lease agreements and the law, including the [Centers for Disease Control and Prevention] order on evictions during the Covid-19 pandemic.”

One Pensam tenant in the Plantation complex invoked the CDC eviction moratorium in his court filings, but still lost the case because he did not attach the CDC form, ICIJ reported.

For its part, the Legion of Christ said it did not know about the operations or terms of the two trusts, adding they were funded by descendants of a prominent Mexican industrialist family, including Father Luis Garza Medina, a top Legion leader. Garza’s spokesperson also denied having control over the trusts.

[ICIJ] – Lidia Dinkova





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