Paul Manafort’s puzzling real estate deals fit the pattern for money laundering, according to law enforcement and real estate experts.
The former campaign chairman for President Donald Trump has come under investigation for his alleged ties to Russian and the ousted pro-Kremlin government in Ukraine, and his real estate career has raised new questions about his background, reported WNYC-FM.
The NPR affiliate examined three transactions in New York City between 2006 and 2013, in which Manafort paid the full amount in cash, using a shell company, and without taking out a mortgage.
Manafort then transferred the properties into his own name for no money and borrowed $12 million against those homes between April 2015 and January 2017 — a time frame that included his tenure as Trump’s campaign chairman, the station reported.
He’s taken out a total of $19 million in home equity loans — which are intended for home improvement — over the past five years on properties in New York City.
“It feels like we’re seeing a small piece of the bigger picture here,” attorney Julian Russo, who has investigated the loans, told The Intercept.
One of those properties is in Trump Tower, which coincided with his investment firm landing a $10 million contract with Russian oligarch Oleg Deripaska, while another is located in Soho and the third is in Brooklyn’s Carroll Gardens neighborhood.
Manfort bought the Brooklyn house for $3 million four years ago and took out a $7 million against the property just three days before Trump’s inauguration, using a bank operated by Trump fundraiser and economic adviser Steve Calk.
David Reiss, a real estate law professor at Brooklyn Law School, was baffled by the loan, because the home’s estimated value on Zillow was listed at $4.5 million to $5 million, and he said home loans don’t typically exceed the value of a property without another source of collateral.
“I do think that transaction raises yellow flags that are worth investigating,” Reiss said.
The pattern isn’t unusual in New York City, but nine law enforcement and real estate experts told WNYC that the transactions merited scrutiny.
Those experts explained that money launderers often purchase properties in cash through shell companies, and then take out “clean” money against those real estate investments through bank loans.