With attention growing on the use of shell companies in high-end real estate, an activist organization released a report Sunday night that said several New York real estate lawyers had been caught on camera providing advice on how to move suspect money into the United States.
The report is the result of an undercover investigation carried out in 2014 by Global Witness, a nonprofit activist organization that has been pushing for stricter money-laundering rules.
The lawyers featured in the report include a recent president of the American Bar Association.
“It wasn’t hard to find lawyers to suggest ways to move suspect funds into the United States,” said Stefanie Ostfeld, a spokeswoman for Global Witness. “We went undercover because it is the only way we could show what really happens behind closed doors. The findings speak for themselves — something urgently needs to change.”
The real estate industry has been under growing scrutiny as evidence has emerged that suspect money is flowing into luxury real estate. Global Witness cited an investigation last year in The New York Times that documented numerous foreign officials and their family members buying multimillion-dollar properties in Manhattan and quantified the rising use of shell companies in real estate transactions.
In the report, lawyers describe tactics for moving money secretly. Another lawyer, Marc Koplik of Henderson & Koplik L.L.P., said, “So we have to scrub it at the beginning, if we can, or scrub it at the intermediary location that I mentioned,” according to the report. He also said smaller money managers and trustee firms were “closer to what true private bankers used to be.”
Lawyers who were named in the report, or their representatives, told The Times that they took issue with Global Witness’s undercover methods. And a lawyer for Mr. Jankoff and another lawyer for Mr. Koplik said they were unwilling to comment because Global Witness had not been willing to show them advance versions of the full videos, which were posted on Global Witness’s website and featured in a segment Sunday night on “60 Minutes.”
In the report, Global Witness also said it had met with James Silkenat, a recent president of the American Bar Association. Mr. Silkenat, who works at Sullivan & Worcester, did tell the investigator that he would have to know more about the minister’s money, would have to make sure no crimes were committed before taking him on and would report any crimes he found out about to authorities.
Nonetheless, Mr. Silkenat told the investigator that there may be “other banking systems that are less rigorous on this than the U.S.” and that “we could provide you with the list of countries where the banking systems require less detail on ownership or source of funds.”Full Story