Dirty cash is fueling condo recovery: ex-prosecutor

Miami /
Oct.October 14, 2013 10:22 AM

One of the country’s foremost money laundering experts is crediting corrupt foreign government officials and narcotraffickers with South Florida’s robust condo market recovery, including an astounding 170-plus towers — more than 22,500 units — on the drawing board.

Charles Intriago knows what he’s talking about as a former assistant U.S. attorney and the state’s special counsel on organized crime. Today, he takes on crooks as president of the Association of Certified Financial Crime Specialists, based in Miami, and he is certain that one way they are cleaning their illicit cash — in an unquantifiable way — is by investing in South Florida properties.

“There is a wave of willful blindness about the source of a good portion of the money coming into real estate investments in South Florida,” said Intriago, who founded and later sold the MoneyLaundering.com website. “There is no way in hell that all of that money is coming out of Mother Teresa’s convent.”

And it’s not as if the law had made it that tough to cover up how the bad guys made their dough. Anti-money laundering statutes focus monitoring on the banking industry rather than the real estate industry. On top of that, disclosure requirements allow many enterprises such as limited liability corporations to own property — and the individuals behind them usually are never identified.

“If I were a guy looking to hide dirty money, the first place I would go is real estate,” Intriago said.

Lots of people with noteworthy backgrounds are apparently thinking the same way Intriago does.

This month, The Nation magazine put “Miami: Where Luxury Real Estate Meets Dirty Money” on its cover. The piece connects the money-laundering dots in South Florida, identifying a handful of prominent eastern Europeans and South Americans with luxury condos:

– Vladimir Pekhtin was a senior member of Russia’s parliament early this year, when he resigned after documents revealed he owned three Miami homes worth more than $2 million.
– Cristobal Lopez, a casino operator with ties to Argentina President Cristina Fernandez de Krichner, owns a $1.6 million condo in Trump Tower in Sunny Isles Beach.
– Jose Luis Manzano, a former interior minister in Argentina, owns two condos at Seacoast 5151 in Miami Beach.

“Obviously not all of the money flowing into Miami from abroad is illegitimate,” the magazine stated. “Yet there are abundant signs — beyond the city’s traditional role as a repository for dirty cash and the fact that much of the inflow is from countries particularly rife with corruption — that significant numbers of foreign condo buyers are political figures and businesspeople seeking to illegally export capital abroad, launder profits or evade taxes.”

The Nation’s report comes less than two months after the South Florida Business Journal examined how Alvaro Lopez Tardon, the alleged leader of Spain’s Los Miami drug gang, purchased at least a dozen condo units from developers using limited liability companies.

“The story might sound like a flashback to the ‘Cocaine Cowboys’ days of the 1970s and 1980s, as former drug traffickers in the 2006 documentary stated that drug money built many of the highrises in Miami,” the newspaper reported.

The reports help explain some of the strong demand during this latest condo building boom, where three new projects have been completed and 40 more towers are under construction, industry watchers said.

Going forward, the topic of dirty money in South Florida real estate will probably be a recurring theme and it’s not hard to see why — existing anti-money laundering laws; a weak U.S. dollar; attractive prices; and a perception that Miami real estate is a safe haven compared to many overseas markets.

Peter Zalewski is the founder of Condo Vultures LLC, a consultancy and publishing company, as well as Condo Vultures Realty LLC and CVR Realty brokerages and the Condo Ratings Agency, an analytics firm. The Condo Ratings Agency operates CraneSpotters.com, a preconstruction condo projects website, in conjunction with the Miami Association of Realtors.


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