DON'T KNOW MY CLIENT

How the Trumps kept their hands clean while taking criminals’ money

Obsession
"America First"
Obsession
"America First"

Yet another searing indictment of US president Donald Trump’s business activities has emerged: The Trump Organization earned millions from a Panamanian licensing deal that allegedly sold property to people with ties to drug cartels. But the scheme wouldn’t have been possible if it weren’t for the broken and corruptible nature of global property markets.

Reuters, NBC, and NGO Global Witness report that brokers pre-sold apartments in the Trump Ocean Club International Hotel and Tower to David Helmut Murcia Guzmán, who has since pled guilty to laundering drug money. Further, around 50% of lead broker Alexandre Ventura Nogueira’s pre-sale buyers for that property were wealthy Russians and Eastern Europeans, some of whom were connected to the Russian mafia, he told Reuters and NBC.

Global Witness estimates that, by 2010, the Trump family business may have made up to $74.5 million from the project in Panama. It was paid a $1.2 million licensing fee for use of the Trump name and had the right to a 1% cut of apartment pre-sales. Some of those commission fees are likely to have come from dirty money, the reports claim, but the Trumps probably can’t be convicted of any crime for taking it.

Why aren’t the Trumps responsible for accepting payments from criminals? When pre-sales were going through from 2007, real estate brokers in Panama weren’t required to vet their clients’ identities, or to check whether their money was laundered or came from criminal activities. Criminals often buy properties using secretive shell companies that are nominally owned by a “director” while the actual owner’s identity remains hidden. Global Witness reports that many of the Russian buyers at Trump Ocean Club used these structures, and Panamanian law didn’t demand the brokers to find out who they were.

The Trumps could be liable to criminal charges in the US, says Global Witness’s Anti-Money Laundering head Mark Hays, but only if they knew or suspected that their buyers paid with laundered money. “We’re not saying they had knowledge but that given all these red flags it appears that they at very least turned a blind eye, and may have actively worked to avoid knowing what’s going on,” Hays alleges.

A Trump Organization spokesman told Reuters that the company had no involvement in the brokerage process and that, “no one at the Trump Organization, including the Trump family, has any recollection of ever meeting or speaking with” Nogueira, who sold many of the apartments.” In contrast, Nogueira told Reuters that he met many times with Trump’s daughter Ivanka, and that the Panama project was her “baby.”

Anti-corruption activists like Global Witness say that every country should require real estate brokers to find out exactly who is buying their properties and where their money came from. The Patriot Act, passed by the George W. Bush administration, was supposed to clamp down on illicit money coming into the US, but it gave the real estate sector what was meant to be a temporary exemption.

Sixteen years later, the government has done little to change regulations—despite the fact that almost half (paywall) of expensive residential properties in the US are owned through shell companies, according to a 2015 New York Times investigation. In New York, lack of a due diligence requirement allegedly benefitted another Trump deal, allowing one former Kazakh cabinet minister to launder $3.1 million through the Trump Soho complex.

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