Legislation Proposed on Front Co.’s/Foreign Investment

Posted on July 31, 2018July 31, 2018 by Denise Simon

Frankly, Britain has a much worse issue, but big hat tip to Senator Rubio. There are cities in America which are pockets of some nasty dark money in real estate.

There needs to be some real reform to CFIUS, Committee for Foreign Investment in the United States.

Crackdown on dirty money shook Miami real estate. Now, Rubio wants to take it national

Washington– In a move with significant implications for the U.S. housing market, Florida Republican Sen. Marco Rubio is seeking to take a Treasury Department crackdown on dirty money in luxury real estate and expand it from a few high-priced enclaves to the entire nation.

Rubio says his proposal is an attempt to root out criminals who use illicit funds and anonymous shell companies to buy homes — a form of money laundering that hides the cash’s tainted origin from law enforcement and banks. The widespread practice enables terrorism, sex trafficking, corruption, and drug dealing by providing an outlet for dirty cash, according to transparency advocates.

Through an amendment to an unrelated major spending bill, Rubio will ask Treasury to study whether government regulators should force shell companies that buy homes priced at $300,000 or more in cash nationwide to disclose their owners. That could be a figure as high as 10 percent of the nation’s real-estate deals.

A similar reporting requirement affecting transactions priced at $1 million or more has already had a chilling effect on all-cash corporate sales in Miami-Dade County, which has been under Treasury’s microscope since 2016.

“Shell companies involved in shady activities are a big problem, especially throughout South Florida,” Rubio said in a statement to McClatchy and the Miami Herald. “With this provision, a study would be conducted to look at requiring all shell companies that make cash transactions, regardless of their area, to disclose their identities.”

The amendment builds on a previous Treasury disclosure order that applied only to certain markets, including South Florida.

That order — which forced shell companies buying homes with cash to reveal their true owners to the government — has been in place in some areas since March 2016 at various price points. Its effects were immediate and stunning. As soon as the order took hold, shell companies buying homes with cash dropped off the map, a recent study by academic economists found. In Miami-Dade, the number of corporate cash sales plummeted 95 percent, although a strong overall market suggests creative buyers found ways to circumvent the rules, researchers said.

Before the crackdown, corporate cash sales accounted for roughly a third of home-sale volume in Miami-Dade, which is popular with foreign investors.

The amendment has the support of the top Democrat on the Senate Finance Committee, Oregon’s Ron Wyden, as well as Rhode Island Democratic Sen. Sheldon Whitehouse. Both have tried to widen disclosure of true owners of shell companies, which can be listed in the names of lawyers, accountants, and other fronts. The lack of corporate transparency frustrates law-enforcement officials, who say it stymies their investigations.

A vote is expected on the overall bill as soon as this week, Rubio’s office said.

The powerful real-estate industry has fought attempts from the government to have it act as a watchdog against money laundering, as banks, precious-metals dealers, money-service businesses, and other financial institutions are required to do. Many Realtors and developers say their clients are simply wealthy buyers seeking privacy, not criminals.

But over the past two years, Treasury has moved with force into what had been a largely unregulated sector of the U.S. financial system. Starting in Miami-Dade County and Manhattan two years ago, Treasury’s Financial Crimes Enforcement Network (FinCEN) began requiring anonymous shell companies to disclose their true owners when they bought pricey homes with cash.

The temporary directives — called “geographic targeting orders” or GTOs — were later expanded to other housing markets in Florida, New York, Texas, California, and Hawaii where foreign and anonymous investors are gobbling up real estate and driving up prices. The rules require title agents to identify the owners of shell companies buying homes with cash and disclose their names to the federal government.

“The GTOs are working, and it’s time they were expanded. Laundering money through real estate isn’t new, but [what is new is] an effective approach to combat dirty money,” said Clark Gascoigne, deputy director of the Financial Accountability and Corporate Transparency (FACT) Coalition, a watchdog nonprofit.

Rubio’s proposal to take the project national, Gascoigne added, “sends a strong message that we’re serious about protecting the U.S. financial system, the real-estate market, and communities across the country.”

Stephen Hudak, a spokesman for FinCEN, declined to comment.

Cracking down

The Rubio amendment asks Treasury to consider expanding the FinCEN directive to include all cash real-estate transactions over $300,000 anywhere in the United States.

It would give Treasury 180 days to submit a study to Congress providing details about the data that has been collected by FinCEN since 2016 and how it is being used. The agency is also being asked to determine if it needs more authority to combat money laundering and whether expanding the targeting order would be of use. In addition, FinCEN is asked if a registry of company owners — something supported by a bipartisan cast of federal legislators — would help authorities fight money laundering, tax evasion, election fraud, and other illegal activities.

Read More

Rubio Whitehouse Wyden FinCEN GTO amendment.pdf

Previously, the FinCEN disclosure requirement kicked in for corporate cash sales that were priced at $3 million or higher in New York City, $1 million or higher in Miami-Dade, Broward, and Palm Beach, and at different price points in other states. In May, FinCEN enacted a new directive that secretly lowered the number to $300,000 in all GTO areas. Sources familiar with the agency’s thinking say the new order was kept confidential because regulators don’t want to give money launderers a road map for structuring their transactions to avoid reporting.

Rubio’s amendment would start at that lower price point, covering a major chunk of home sales nationwide. Last year, the median U.S. home sold for a price of $247,200, according to the National Association of Realtors.

A cash transaction is one in which there is no mortgage and the property is purchased outright. Cash doesn’t just mean stacks of greenbacks; it also includes such financial instruments as wire transfers, checks, and money orders. Unlike mortgages, cash deals don’t involve heavy scrutiny from banks, which can identify potential money laundering and file suspicious-activity reports to the feds.

The 2016 publication of the Panama Papers spotlighted how anonymous shell companies in faraway tax havens were used to camouflage property purchases in the United States by politicians, drug traffickers, and financial fraudsters. Housing analysts argue that the flow of anonymous money is driving up prices.

“There’s hardly a metropolitan area in the country that is not experiencing a real public-policy issue regarding affordable housing,” said Ned Murray, a housing expert and associate director of Florida International University’s Metropolitan Center. “The whole focus of the real-estate industry is on … supplying homes for wealthy investors that we don’t know much about. It really is a factor for prices and supply.”

Much of the world has responded to the threat of corruption in real estate by requiring greater ownership disclosure. The United States has done relatively less, although Rubio’s amendment could help close the gap.

Those operating in the shadows of the real-estate market certainly seem aware of the Treasury disclosure requirements — and are working to get around them.

Take Carmelo Urdaneta Aqui, who is the former legal counsel to the Venezuelan Ministry of Oil and Mining. He was recently among those charged in a federal $1.2 billion money-laundering case involving funds stolen from Venezuela’s state oil company.

When Urdaneta prepared to close on a brand-new, $5.3 million condo at the Porsche Design Tower in Sunny Isles Beach, he was informed by paperwork from the developer that “taking title [to the unit] under a company or trust may trigger FinCEN reporting requirements,” according to a federal indictment filed last week. He was worried enough about the disclosure that he discussed how to avoid it with a government informant.

Ultimately, Urdaneta set up a company in his wife’s name to do the deal, prosecutors allege.

Developer Gil Dezer’s company built the Porsche Design Tower in Sunny Isles Beach, where units sell for millions of dollars to wealthy out-of-towners.

David Santiago [email protected]

Dezer Development did not say why it alerts potential buyers that they might end up on Treasury’s radar.

“All language relating to legal requirements associated with closings was prepared by Dezer Development’s outside legal counsel,” a spokeswoman wrote in an email to the Herald on Monday.

The 60-story Porsche Design Tower is famous for a car elevator that allows owners to park in “sky garages” within their units. On Friday, federal prosecutors indicated that they would move to seize the unit.

Bad for brokers?

While overall home sales held steady even after the FinCEN rule went into place, the real-estate study found, luxury home prices were slightly softer in markets affected by the GTO.

That suggests that expanding the GTO could have a dampening effect on the nation’s real-estate market, said Jeff Morr, a luxury real-estate broker at Douglas Elliman and chairman of the Miami Master Brokers Forum, an industry group.

“Does it stop money laundering? Probably, yes,” Morr said. “Is it good for the real-estate market? Probably, no.”

But at least making the rule nationwide might take some of the heat off Miami, he said.

“It may make Florida less unattractive now that it’s everywhere,” Morr said. “We shouldn’t be treated differently than other areas.”

The crane has become the unofficial city bird of Miami during the latest construction boom.

Miami Herald

That was exactly the sentiment of the Miami-Dade County Commission when the rule was first enacted in 2016. At the time, commissioners passed a symbolic resolution asking regulators to stop singling out Miami for special scrutiny. The industry still feels the same way.

Legitimate buyers need privacy, too, said Ron Shuffield, president and CEO of EWM Realty International.

“There are wealthy people who don’t want everyone to know that they live at the end of the block,” Shuffield said. “If someone is determined to launder money, they can pick anywhere in the country to do it, from the smallest city in the Midwest to Miami or New York City. It’s only fair that every area have to report. Otherwise, the rules could be scaring people away from certain markets.”

55 Remains from N Korea, Identification Underway

Posted on July 31, 2018July 31, 2018 by Denise Simon

The Defense POW/MIA Accounting Agency (DPAA) stated on its Korean War website that “on several occasions in the past, [North Korean] officials have indicated they possess as many as 200 sets of remains they had recovered over the years. The commitment established within the Joint Statement between President Trump and Chairman Kim would repatriate these.”

WASHINGTON — All Americans welcome the return of remains from the Korean War.

United Nations Command returned 55 cases of remains from North Korea to Osan Air Base, South Korea, July 27, 2018. Members of the command and the Osan community were on hand at the arrival ceremony. Army photo by Sgt. Quince Lanford

The July 27 honorable carry ceremony at Osan Air Base, South Korea, transferred 55 boxes of remains covered by the United Nations flag. Now the work of identification begins.

These remains are presumed to be American, but many other nations fought in the Korean War, and it’s possible the remains may come from one of those nations.

The 1950-1953 Korean War was incredibly violent, with 36,940 Americans killed and another 92,134 wounded. Some 7,699 American service members are listed as unaccounted-for from the conflict.

Remains Examination

The remains will be examined at the Defense POW/MIA Accounting Agency, and experts there will be responsible for identifying the remains. The agency is relatively new — coming into existence in 2015 after the merger of the Joint POW/MIA Accounting Command and the Defense Prisoner of War/Missing Personnel Office.

Many of the fallen service members died in North Korea and were buried by their comrades where they fell. Other U.S. service members were captured and placed in prisoner-of-war camps, where many succumbed to starvation, exposure and torture. Outside those camps are graves of Americans.

The DPAA Laboratory at Hickam Air Force Base, Hawaii, is the first U.S. stop for the recently returned remains. The lab is the largest and most diverse skeletal identification laboratory in the world and is staffed by more than 30 anthropologists, archaeologists and forensic odonatologists, United Nations Command release.

Those experts will sort and examine the remains. In the past, North Korea turned over commingled remains.

The lab experts are painstaking in their examination. The age of the remains — at least 65 years old — will complicate the process. The North Koreans collected the remains, and U.S. investigators will have to do the examination without the forensic information they normally would have, such as the approximate place of the burial and the conditions around it.

All US Accounted-For

All US Unaccounted-For

Korean War Air Loss Database – By Date

Korean War Air Loss Database – By Name

Related reading: Profiles of America’s Unaccounted For Personnel

Examination of dental charts and mitochondrial DNA will be key technologies used to identifying the remains, and the process may take years to complete, DoD officials said.

Facebook Announces Foreign Intrusion Again, 290,000 Accounts

Posted on July 31, 2018July 31, 2018 by Denise Simon

The details: “About two weeks ago we identified the first of eight Pages and 17 profiles on Facebook, as well as seven Instagram accounts, that violate our ban on coordinated inauthentic behavior,” said Nathaniel Gleicher, the company’s head of cybersecurity policy, in blog post. Those pages and accounts have been removed.

“In total, more than 290,000 accounts followed at least one of these Pages, the earliest of which was created in March 2017,” Gleicher said. “The latest was created in May 2018.”

The New York Times was the first to report that the company had identified the operation.

What they’re saying: Gleicher said Facebook has not attributed the campaign to a specific actor like Russia’s Internet Research Agency, which was behind the 2016 campaign.

There are some similarities to what they say before and after the 2016 elections, and Facebook found evidence of some connections between recent accounts and IRA accounts that were disabled last year.

But there are also differences: “For example, while IP addresses are easy to spoof, the IRA accounts we disabled last year sometimes used Russian IP addresses. We haven’t seen those here,” Gleicher said.

Facebook COO Sheryl Sandberg told reporters that the company is still investigating: “This is an early stage for us to be sharing this information because we don’t have perfect information.”

The content included several related to divisive political issues.

One post released by Facebook was posted by a page called “Resisters” and featured an image of President Trump with the text: “If Trump wants to beat Barack Obama’s Twitter record for most liked tweet he only needs to tweet 2 words ‘I resign.'”

The same page also created an event for a counter-protest to the upcoming ““Unite the Right” rally in Washington. “Inauthentic admins of the ‘Resisters’ Page connected with admins from five legitimate Pages to co-host the event,” said Gleicher.

Though the company released some sample posts from the pages, Facebook officials said on a call with reporters that it would not get into the broad details of the content — beyond what it had released publicly — but were working with researchers to evaluate it.

*** Early patterns, language and tactics are once again pointing to Russia, however that is not confirmed.

CNet: Facebook has discovered a new campaign of “inauthentic behavior” that’s used dozens of Facebook pages and accounts, and $11,000 worth of ads, to promote political causes prior to the US midterm elections, the social network said Tuesday.

The world’s largest social network is already in the hot seat with lawmakers over its role in the 2016 US presidential election. Russian trolls affiliated with the Kremlin-linked Internet Research Agency used a combination of paid ads and organic posts to spread misinformation and sow discord among voters ahead of the election.

In the wake of the scandal, Facebook made several changes to its advertising operations. They include a stricter verification process for political ads, and labeling ads with who paid for them. On Tuesday, Facebook’s head of cybersecurity policy, Nathaniel Gleicher, wrote in a company blog post that his team couldn’t say for sure who was behind the new campaign.

“Some of the activity is consistent with what we saw from the IRA before and after the 2016 elections,” Gleicher said. “And we’ve found evidence of some connections between these accounts and IRA accounts we disabled last year.” But there are differences as well, Gleicher said.

The people behind the new fake accounts are taking more steps to cover their tracks, and Facebook hasn’t found any activity coming from Russian IP addresses. What’s more, the ads were purchased in US and Canadian dollars.

Gleicher said there was a connection between the fake accounts and pages and planned protests in Washington next week.

Sen. Mark Warner, a Virginia Democrat who’s helped lead the Senate Intelligence Committee’s investigation into Russian efforts to influence the 2016 presidential election, said the news shows that social media remains a propaganda target for the Russians.

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“Today’s disclosure is further evidence that the Kremlin continues to exploit platforms like Facebook to sow division and spread disinformation,” Warner said, “and I am glad that Facebook is taking some steps to pinpoint and address this activity. I also expect Facebook, along with other platform companies, will continue to identify Russian troll activity and to work with Congress on updating our laws to better protect our democracy in the future.”

Facebook said it’s working with law enforcement to investigate the campaign.

Iran’s Actions in the Middle East, Where’s the Money?

Posted on July 30, 2018July 30, 2018 by Denise Simon

Obama admin secretly used the Federal Reserve Bank to move $8.6 million to Iran for nuclear-related material. Then they circled back and tried to use the Fed to move several billion dollars more for Iran. Note from State Dept meeting with Oman bank:

It is getting more nefarious since the Kerry/Obama team are gone and left lots of unfinished business behind, or just ignored it.

Iran’s Revolutionary Guard Corps are employing German companies to disguise their illicit funding of the war against the pro-US government in Yemen.

Time Magazine reported on Thursday: “For several years, Iran’s elite Islamic Revolutionary Guard Corps (IRGC) had been using German front companies to buy advanced printing machinery, watermarked paper and specialty inks in violation of European export controls.”

According to interviews with US Treasury Department officials, Time added: “The IRGC had then printed counterfeit Yemeni banknotes potentially worth hundreds of millions of dollars and used the bogus rials to fund its proxy war against the beleaguered pro-US government in the capital of Sanaa. German companies were being used as a cover by the Iranians to finance the world’s worst humanitarian conflict.”

The report said that US officials, who uncovered the Iranian counterfeiting operation, met with their German counterparts at the Federal Ministry of Finance in Berlin last April.

The Jerusalem Post reviewed intelligence agency reports from German states covering Iran. The reports document Iran’s strategy of using front companies to engage in illicit procurement of nuclear and missile technology in Germany during 2017.

According to Time: “The evidence, uncovered by US illicit-finance investigators, was meant to sway the Germans, but not just in hopes of countering Iran’s moves on the southern tip of the Arabian Peninsula” but also “to convince Berlin that Tehran cannot be trusted and that the Germans should join the Trump Administration in imposing economy-crippling sanctions on Iran.”

US President Donald Trump issued an executive order in 2017 extending the designation of the IRGC as a terrorist organization. But Germany has declined to outlaw the IRGC as a terrorist entity. The mass circulation Bild reported on Thursday that Germany will permit former IRGC member Hadi Mofateh to run the Iranian regime-controlled Islamic Center of Hamburg.

Time wrote that weeks after the initial meeting in the German finance ministry, “American officials presented their hosts with one last set of documents: detailed blueprints on how the Trump Administration was preparing to unleash financial warfare on the Iranian economy.”

Germany is widely considered the least cooperative of the US’s European allies in confronting Iran’s bellicose activities, according to two sources familiar with US-German talks on the Iran nuclear deal. German exports to the Islamic Republic of Iran climbed to €3.5 billion in 2017, up from €2.6b. in 2016.

A German intelligence report from the city-state of Hamburg in July said Iran’s regime is continuing to seek weapons of mass destruction.

The Post reviewed the 211 page document that says: “some of the crisis countries… are still making an effort to obtain products for the manufacture of atomic, biological and chemical weapons of mass destruction (proliferation) and the corresponding missile carrier technology (rocket technology).”

The Hamburg report added: “The current main focus points of countries in the area of relevant proliferation activities are: Iran, Syria, Pakistan and North Korea.”

***

The Trump administration said in December that it believed 80 percent of the manpower supporting the Syrian regime was made up of “Iranian proxies,” including foreign Shiite fighters. Israel has accused Iran of sending as many as 80,000 fighters to Syria.

It is impossible to know the exact number of Afghan recruits in Syria, because many slip back and forth between Iran and Afghanistan, do not tell their families where they are, and hide their military service for fear of being sent to prison in Afghanistan for fighting on behalf of another country. Yet for some, especially those from the long-persecuted Hazara minority, it seems to be a secret badge of honor.

“Nobody forced us to go fight, but it gives you a kind of pride,” said Hussain, 26, a muscular Hazara man in Herat with scars on his face and hands from old shrapnel wounds. He has served in four deployments in Syria since 2014, earning upward of $600 a month, and returned again two months ago from the front. He said he originally decided to enlist while he was working as a carpenter in Iran and saw a video of Islamic State fighters chopping off victims’ heads. More details here.

London’s Crime is Surging and 80 Terrorists to be Released

Posted on July 30, 2018July 30, 2018 by Denise Simon

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London’s Mayor, Sadiq Khan is under fire for the growing crime in his city. How can the murder rate be higher than in New York?

As of March, London accounted for 17 percent of all recorded crime in England and Wales in the year prior, as well as 42 percent of all recorded robberies. A third of all knife crime took place in London as well.

London temporarily overtook New York in the number of murders in early 2018. In February, London’s police investigated 15 murders while New York saw 11 homicides. In March, the Metropolitan Police murder numbers increased further to 22, while the NYPD’s jumped to 21. New York has since recorded more murders.

Remember those Beatles, ISIS suspects? Well, Britain’s Home Office has suspended cooperation with the United States in extraditing them mostly due to the death penalty.

A combination picture shows Alexanda Kotey and El Shafee Elsheikh, who the Syrian Democratic Forces (SDF) identified as British nationals, in undated handout pictures in Amouda, Syria, released February 9, 2018 by the Syrian Democratic Forces.HANDOUT/REUTERS

Dozens of convicted terrorists are about to be released

BRITAIN is bracing itself, with 80 terrorists expected to be free to walk the streets by Christmas — and that’s not all the bad news.

AS MANY as 80 convicted terrorists will be free to roam British streets by the end of the year, including an Islamist preacher who urged people to join the Islamic State.

The extraordinary situation has arisen because about 40 per cent of the sentences for terrorism issued between 2007 and 2016 will have ended by Christmas — meaning police are powerless to stop them walking free.

Police and the government have admitted more resources will have to be pumped into keeping a close eye on the terrorists, at a time when resources are already stretched coping with a crime wave that has seen 80 killings in London so far this year.

UK Security Minister Ben Wallace said police would focus on getting them to “disengage” from extremism, but that would require a different approach than trying to prevent them being radicalised in the first place.

“It is a concern because what we are seeing nowadays is a large group of people who have effectively crossed the Rubicon to becoming radicalised. That is the mindset that they have now accepted or adapted,” he told BBC Radio.

To deal with the influx, police would be putting resources into efforts to “to try and make them disengage — that is slightly different from ‘deter them in the first place’ … and into how we effectively supervise them if they are released back into the community”.

That meant monitoring the terrorists, which inevitably would come at a cost both financial and through rediverting staff from other duties.

The actual number released could even be higher than 80, as some prisoners are eligible for release halfway through their sentences.

Those eligible for parole include Anjem Choudary, an Islamist preacher, who was jailed for five years in 2016 for inviting people to support Islamic State.

All the sentences given to people for financing terrorism, having terrorist information, or not disclosing information about terrorist acts, will have expired by the end of the year. Another two dozen will have lapsed by next year.

The discovery of the end of the sentences for 40 per cent of those issued between 2007-2016 was made by The Guardian last month. A former head of counter-terrorism, Richard Walton, told the paper the release of so many convicted terrorists was “worrying” — and any attempt to monitor them was “time-intensive” especially when the individuals knew they were being watched, so “often lie low for a period”.

Terrorist prisoners released on licence place a resource burden on both specialist counter-terrorism detectives and on mainstream policing. A risk-management process is used to monitor those released on licence and the monitoring of high-risk offenders is extremely resource-intensive.”

He went on to say: “Intelligence is often insufficient to gauge whether they have any intent to reoffend owing to their recent incarceration.”

That made monitoring them after their release even more difficult, especially as they were aware of the close attention security agencies were paying to them.

A program already exists to try to integrate terrorists back into the community, but so many returning to the community means extra vigilance will be needed.

To add to the problem the probation union has already warned its resources were stretched, while a 2016 review found extremism in British jails — where 700 inmates are considered to have extremist views — meant there was a real risk prisoners could be radicalised while they were behind bars.

News.com.au asked police what steps were being taken to ensure public safety given Mr Walton’s view and that of Mr Wallace, who believed there were challenges ahead.

A spokesman from the Met Police would only say they and intelligence agencies were working “tirelessly and at pace” to keep the public safe from terrorism.

“This includes monitoring and assessing existing and emerging threats and risks, including the release of convicted terrorists, and putting into place actions to mitigate them through a range of operations and activities.”

A Home Office spokesman told news.com.au national security would always be the government’s “main priority”.

“Terrorists released on licence are closely managed by the National Probation Service. They are subject to very restrictive licence conditions including, for example, living in approved premises; restrictions on movement and stringent curfews. Failure to adhere to conditions results in enforcement action, including prison recall.”

Terrorists are managed by multiple agencies and preparations begin months before their release. But the Home Office would not discuss specifics, and refused to say how many were being released.

“All offenders of extremist or terrorist concern are managed actively as part of a comprehensive counter-terrorism case management process. It would not be appropriate to release figures for how many of those offenders due to be released this year are deemed to be high risk.”

Since March last year there have been 12 terror plots thwarted and four other extreme far-right plots, and there can be up to 500 active investigations at any one time.

Meanwhile, this week a UK think tank urged the Government to replace laws surrounding treason that date back to 1351.

In a statement, Policy Exchange said a new treason law updated for modern times was needed, and argued a workable law of treason would mean offenders could be convicted and jailed for much longer.

“Many of them will … have betrayed this country. If they had been convicted of treason and imprisoned for life, the UK would be considerably safer,” the statement said.