They are all assholes and they do in fact run the country. As I like to remind myself, if I ever needed clean laundry I can get a dirty Lawyer.
Report Describes Lawyers’ Advice on Moving Suspect Funds Into U.S.
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 —
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 recent weeks, federal law enforcement officials have said they are beginning to focus investigations on lawyers and other professionals who facilitate money laundering. The Treasury Department announced a program to require real estate firms to help it uncover and track people who use shell companies to purchase high-end properties.
This week, a bipartisan group of lawmakers is planning to introduce a bill in the House of Representatives to require more transparency into shell companies nationwide. And later this week, activists in London will hold what they are calling a Kleptocracy Tour, a bus ride past properties that they said had been associated with illicit money. They plan to hold a similar tour in New York in April.
The Global Witness report was based on a sting operation in which Global Witness’s investigator told lawyers that he worked for an African minister of mines who had accumulated millions of dollars from companies that were seeking business in his country. The investigator told the lawyers that the minister wanted to buy a townhouse in New York and possibly a jet or a yacht.
While none of the lawyers are accused in the report of criminal wrongdoing, Global Witness said 12 of the 13 lawyers its investigator had met with discussed ways to move money.
For instance, John Jankoff of Jankoff & Gabe P.C. told the investigator that the minister could set up a Swiss bank account. “If it’s not in his name,” Mr. Jankoff said, according to the report, “then he needs what is known as a straw man.”
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.”
Mr. Silkenat told The Times by email that his comment was meant to address privacy concerns that the supposed minister might have. He said he had tried to make clear in the meeting that “we would be a wholly ill suited choice as legal counsel for any potential client who was looking to violate U.S. or foreign money laundering or other laws.”
The American Bar Association suggests that government officials who come in as clients should have enhanced scrutiny, but the association’s guidelines are voluntary. In its report, Global Witness said that Mr. Silkenat had sent them a letter from an ethics lawyer who said that there is no expectation that lawyers investigate clients at a first meeting.
Two lawyers — Mr. Koplik and Gerald Ross of Fryer & Ross L.L.P. — went as far as suggesting to the Global Witness investigator that they could get the minister’s money into the United States secretly by using their law firms’ bank accounts, the report said.
Global Witness described this as a “loophole” in the financial system, saying that banks were not required to know the identity of lawyers’ clients.
“And you don’t have to declare to bank authorities where the money comes from, because you said you even don’t know who they are?” the investigator asked Mr. Ross, according to the report.
“They’ve asked me, ‘So you have a lot of money coming in,’” Mr. Ross replied, according to the report. “I said, ‘Yes, it’s real estate deals.’ ‘Oh, thank you very much.’”
In a call with The Times, Mr. Ross said all his clients used limited liability companies for legitimate reasons. “It’s not because they’re hiding money,” he said. “It’s because they’re afraid of being screwed by somebody.”