A new corruption probe linked to Trump is a scathing indictment of the US real-estate industry

[n2doc]

As US president Donald Trump whirled around Poland on July 6, a story in the Financial Times (paywall) turned up an interesting new development relating to his real-estate empire. Felix Sater, a Trump associate and a convicted criminal, is cooperating with an international probe into Kazakh money laundering, some of which allegedly went through a Trump property.


According to the FT, former Kazakh cabinet minister Viktor Khrapunov spent $3.1 million buying three apartments in Trump Soho through shell companies using funds that the Kazakh government alleges he stole from the state. The FT reports that Sater, a Russian-born US citizen convicted in 1998 of a fraud in partnership with the New York and Russian mafia, acted as a fixer to help Khrapunov’s family buy the properties. Khrapunov claims he is innocent and is being persecuted by the regime of Nursultan Nazarbayev, Kazakhstan’s strongman president.

Could this damage Trump?


While the Kazakh investigation is unlikely to shed any light on possible ties between Trump’s election campaign and Russian interference in last year’s US election, says Alexander Cooley, author of Dictators Across Borders: Power and Money in Central Asia, if it prompts special prosecutor Robert Mueller to probe Trump’s real-estate transactions, it could become uncomfortable. The Trump Organization has courted Russian buyers and, like many high end sellers of US real estate in large American cities, it sells properties to mysterious shell companies.

more

https://qz.com/1023003/the-kazakh-corruption-probe-tied-to-trump-is-a-scathing-indictment-of-americas-real-estate-industry/

[The Velveteen Ocelot]

1. Real estate transactions are a tried-and-true means of money laundering.

I have no doubt that if Trump is ever busted for anything it will be this.

[sarah FAILIN]

2. how does this work?

I know everyone says they do this, but is the seller giving the purchaser a kickback? I understand how casinos work to launder money, but I don't get it with real estate.

[drray23]

4. If you have money to launder, you agree to buy a property at an inflated price

Way above market value. This extra money is now laundered and can be used for something else.
So basically, the seller is on it with you and uses the real estate property as an excuse to launder money.

[Hugin]

5. The buyer pays many times what the property is worth...

Last edited Fri Jul 7, 2017, 12:53 PM - Edit history (1)

The seller then places the proceeds into a corrupt financial institution where the buyer can reclaim the "laundered" money, usually a bank.

Of course, the seller "skims" a little of the money off before sending the money back... For their trouble.

[The Velveteen Ocelot]

6. Usually by setting up shell corporations in foreign countries

and using foreign banks to move cash. There are organizations in Belize, for example, which will set up a corporation for you. For a fee you’ll receive a certificate of incorporation, minutes of board meetings, etc., and even a list of fake people for your board of directors. Then you set up another such company in another country, and make the first one its parent. Maybe you create more companies to be the parents of each other. Pretty soon it's almost impossible to learn the true owners of these shell corporations.

Then you can open up a bank account in another foreign country in the name of the top parent company, and transfer the money to be laundered into that account. You then use that money to buy some expensive real estate, like a multimillion-dollar condo or office building in NYC for more than it's worth. Hold the property for a year or two, then you can sell it for a profit. The money is now clean, and it will be very difficult to find out who really was involved.

[Wounded Bear]

7. Here's a sample...

It's one that Rachel Maddow detailed on one of her shows about Trump and the Russians...

http://www.seattletimes.com/nation-world/why-did-a-russian-pay-95m-to-buy-trumps-palm-beach-mansion/

Basically, Trump bought the property, then sold it 4 years later for double what he paid. Nice "investment" eh?

[spanone]

3. K&R...

[Sugar Smack]

8. I'm sorry--

I'll read the rest once I'm done laughing about that image: trump "whirling around Poland".

[american_ideals]

9. This FT story is HUGE. "International money laundering probe".

That means it's not just Mueller's hands the fate of America is in.
An international money laundering probe that implicates Sater is huge, huge, huge. I'm waiting for Josh Marshall to get done with his vacation and report on this FT article.

[dalton99a]

10. Kick

[Baitball Blogger]

11. Real Estate Industry needed a probe.

Best money-laundering and/or inducement vehicle and I hope the investigation reaches Florida.