It makes sense to look to large cities with a high growth rate when searching for suspicious real estate related activities. That is why it should come to no surprise that in Miami, one out of every three cash purchases in this high-end market can be linked to shady shell companies.
Take Tareck El Aissami, Venezuelan Vice President and drug kingpin, who used the proceeds from his narcotic trafficking ring to fund his limited liability company to acquire approximately $7 million worth of luxury apartments in Miami. Between 2011 and 2013, he purchased three units at the Millennium Tower. Due to the high volume of similar real estate transactions, the U.S. Department of Treasury has initiated a plot program aimed to root out laundered money and other ill-gotten gains… Miami has one of the highest rates of suspicious activity included in the program. Other cities include Brooklyn, Queens, and San Antonio.
Opposition comes from individuals that value the privacy during real estate transactions, such as real estate attorney Russell Jacobs. Jacobs does not support government intervention, believing that individual homeowners should have the right of privacy during legal transactions to use shell companies. Mr. Jacobs conducts seminars with real estate professionals on how to structure real estate deals to avoid disclosure.
While opinions are certainly ranging on this matter, it is important to consult with a legal professional—no matter your individual stance. As Jacobs states, “with [casting] a net this wide, you get people who have done nothing wrong. You are hurting economies.” Working with a real estate professional helps in avoiding these issues.