For the past four decades now, America seems to be growing in number when it comes to rich and unaccounted people investing in the nation’s real estate. New York real estate is now apparently overtaken by Swiss banks in sheltering unfavorable white collar criminals. People from various other countries have begun investing in New York housing and general real estate to launder their money out of their respective nations and into the United States. The problem is primarily a loophole in the government which doesn’t require proper credentials from a certain aspect of people who come in with the large sums of investment.
The new Swiss banks
In the past five years, dubious people and accounts have invested in the New York real estate market through façade and shell companies. The source of the money is currently under investigation by a few federal bodies, but are virtually unable to trace. New York luxury real estate is in part rising due to the cash payment of such dubious clients. Typically, the real estate purchased by such people have been over three times the market price. This leaves an untraceable cash exchange as there isn’t really any legal paper trail.
Swiss banks underwent a similar problem when they would allow various people from all over the world to invest in their banks, which would augment their economy, however, they didn’t need to necessarily know or check the credentials of the investor. However, it has been rectified. Nearly eight billion dollars worth of real estate has been bought out in the past five years. Real estate plots of at least five million dollars are what is generally taken up by these questionable accounts. The New York and federal government and respective authorities are currently working on few cases regarding the matter.
The federal crackdown
The federal government is also trying to work on the current loophole that exists in the government. At the moment, the law doesn’t require lawyers and real estate agents to know their clients and their credentials thoroughly. The federal authorities are working at rectifying the problem. The Swiss banks have now changed their financial law to ensure that the proper files are in place. Similarly, the Cayman Islands have also been a spot of such illegal wiring of money through zombie firms masquerading as corporate outfits. Once the money is transferred into certain accounts through the cash medium, they are virtually untraceable.