The fallout of dirty money
The American banking system’s welcome mat for kleptocrats and their stolen loot has come at a big price at home as well as abroad. Reviewing two new books on the subject – The Wealth Hoarders by Chuck Collins and American Kleptocracy by Casey Michel – Jake Bernstein highlights the impact on real estate markets:
The Patriot Act allowed the treasury secretary to exempt industries from customer due diligence. Six months after its enactment, the Bush-Cheney Treasury Department issued exemptions for the real estate industry, lawyers holding escrow accounts for clients, private equity, and hedge funds. All were subsequently abused by kleptocrats and other malefactors, but US real estate in particular has been a staggeringly attractive destination for dirty money. Global Financial Integrity, a Washington-based think tank, recently tallied more than one hundred publicly reported real estate money laundering cases in the US over the past five years and arrived at the figure of $2.3 billion worth of transactions.
Ironically, what makes real estate in America alluring to the international criminal set is our rule of law. Property rights are generally protected in the United States. Disputes are adjudicated by an independent judiciary. Under this safety blanket, real estate assets appreciate….
In cities like New York and Miami—or London and Vancouver—high-end residential real estate buyers, often cloaked in anonymity, have crowded out locals and compounded inequality, turning metropolises into playgrounds of the global elite.
