As you’re probably aware by now, at the beginning of April, the International Consortium of Investigative Journalists dropped a bombshell when they published leaked documents that have since become known as the Panama Papers. In total, there are some 11 million documents which allegedly make clear that worldwide corruption is happening thanks to a clandestine financial network that ensures large sums of money never get taxed.
Ties to Miami Real Estate
If some of the information is accurate, the network has fingerprints all over Miami. For years, it’s been well known that the luxury real estate market here is eyed by buyers all over the world, many of whom make purchases anonymously. This was seen as one of the driving forces behind the Miami luxury condo boom – click here to see the website.
Now, though, a much different picture is being brought to light—one that depicts these beautiful homes as simply hiding places for billions of dollars.
Shell Companies and Condos
The way it would allegedly work is that the law firm of Mossack Fonseca would set up foreign shell companies for the wealthy members of this network. This is the firm that the leak originated from and, as they’re based in Panama, that’s how the name started.
A client of Mossack Fonseca’s could then put money into one of these shell companies and that organization would then purchase a luxury unit somewhere in Miami—we’re definitely not lacking for options, after all.
This sort of transaction would effectively hide the money from governments looking to levy taxes on people like Paulo Octávio Alves Pereira, just one man who was allegedly a part of this scheme.
Paulo Octávio Alves Pereira
In Brazil, Paulo Octávio Alves Pereira is known as a politician who is under indictment on charges of corruption. However, prior to his political life, he made his fortune by developing shopping centers throughout his home country.
When his old boss had to step down as governor of Brasilia after being arrested for bribery, Paulo Octávio Alves Pereira stepped in. However, he was quickly slapped with the same charges.
At some point, Pereira took an interest in Miami real estate, though. He purchased a beautiful unit at the luxurious St. Regis Bal Harbour, where 24-hour room service is just one of many amenities available to residents.
However, this would make him just one of 19 foreign nationals named in the report who reportedly bought properties in Miami-Dade County. He also makes a much more exclusive list as being one of the eight who has been linked to some type of crime back in their home countries.
The U.S. Treasury Department’s Own Investigation
Keep in mind that the U.S. Treasury Department had launched its own investigation just a couple months ago into these shadowy dealings. They specifically took aim at the shell companies that were scooping up real estate for anonymous buyers and paying in cash.
Considering foreign nationals spent $6.1 billion in South Florida homes last year, the department certainly has its work cut out for them, though the Panama Papers definitely help.