Evidence of money laundering at the collapsed Surfside, Florida condo complex
Evidence has emerged that money laundering was involved
during the initial construction and sale of condo units at Champlain Tower
South, the Surfside, Florida building that catastrophically collapsed on June
24 and killed 98 people.
An extensive investigative report by USA Today published on
Thursday—based on thousands of pages of real estate documents and inspection
records and dozens of interviews—has brought to light the presence of
“tell-tale signs of a money laundering scheme” when construction was begun on
the condo complex in 1980.
The report says that such schemes are often accompanied by
“cutting corners on construction,” and, “even before developers sold off the
136 condominiums to their first owners, the construction had been botched and
the building had been set on a course to rot from the foundation up.”
In addition to faulty construction of the first high-rise
condo in the small town of Surfside, the laundering of drug money—rampant in
the Miami area during the boom in beachfront high-rise construction when there
were no laws against the practice for hiding illicit funds—was often used to
bribe government building officials.
The report says, “Money laundering also might have meant
that some early buyers weren’t living in the condo building or concerned with
its long-term maintenance.” This fact is significant because the USA Today
investigation has revealed that evidence of the building’s decay had emerged
earlier and “was ignored longer than previously known. Residents noted flooding
in the garage in 1981, the year the tower opened.”
The Champlain Tower South high-rise condominium building
suffered a partial progressive collapse that lasted just 12 seconds at 1:25
a.m. on June 24, when the northeast section fell down and destroyed half the
units in the complex. After an initial rescue operation failed to locate any
survivors, a recovery effort was mounted to search through the rubble for the
remains of all those who perished in the catastrophe. The final victim was
identified on July 26.
The US A Today interviewed Jorge Valdes, who was “a chief
money launderer for the Medellin Cartel” and “helped build dozens of homes,
apartment complexes, and high rises in the Miami region” but “was not involved
in Champlain South.”
Valdes said, “The era we’re talking about is when Miami
suddenly came out of the ashes. So, how do you rush to fulfill the demand? You
cut corners. You attached roofs with paper clips. You bribe the inspectors.”
Valdes went on, “You wanted to put up real estate as quickly
as possible because the money was flowing. We could buy any building inspector
at any given moment. There were no stringent codes. There were no money
laundering laws.”
The USA Today report says that the Surfside beachfront
property was acquired by Nathan Reiber and his partners Nathan and Isadore
Goldlist, all of whom were from Canada, and construction began in 1979 as the
first of three planned towers. Reiber, in particular, had a history of
financial and legal troubles.
The reports states, “Reiber faced tax trouble in Canada. His
lawyer, Stanley Levine, had been indicted for attempting to bribe a local
official in Florida on an earlier project; and one building contractor hired to
work on the Champlain South project later was forced to surrender his license
after numerous infractions. The architect’s license had been suspended in
Florida after sign structures he designed collapsed during Hurricane Betsy in
1965.”
None of this slowed down the development of the project as the
drug money flowed in. The report says, “Thousands of pages of deed and mortgage
documents reveal that within 24 months of opening, at least 62 sales exceeding
$9.5 million showed classic signs of money laundering.”
Purchasing real estate with drug money was an effective
means of hiding its source by running it through anonymous corporations and
making regular mortgage payments. “That’s why concealed buyer identities,
all-cash sales, hidden sources of private loan money, overpaying for condos and
rapid repayment of loans are all considered red flags for money laundering,”
the report says.
At Champlain South and North Towers, “Buyers purchased units
through shell companies located in countries such as Panama and the Netherlands
Antilles, both notorious for laundering drug money through anonymous
corporations. One buyer was headquartered at the same address as more than 200
other offshore companies, according to the Panama Papers. Multiple sales
involved all-cash sales and overpayments.”
Another individual who laundered money for the Colombian
cocaine cartel, Ken Rijock, told the USA Today, “Shell companies, cash deals,
fast sales, strange buyers, tax haven companies as owners, hidden beneficial
ownership, all the bells and whistles of suspicious transactions that
compliance officers today would recognize in a New York minute” were not
investigated by federal authorities because they were not made illegal until
the passage of the Money Laundering Control Act of 1986.
Records examined in the investigation show that Reiber’s
attorney Levine loaned millions of dollars from a fund he controlled to people
purchasing the Champlain Tower condos. “Levine used a trust account with an
unidentified source of money to shell out more than $3 million in high-interest
loans to early buyers at Champlain South in its first two years and at least
$1.4 million to Champlain North, a red flag for money laundering schemes.”
Aside from the six figure loans—which were offered at rates
far higher than 16 percent bank rates at the time—with 12-month pay backs, the
Champlain Tower South condos brought above-market prices for units with fewer
amenities than high-end condos selling in upscale Miami Beach. “There, the
asking price for a penthouse was $121,000; $137,000 for a luxury two-bedroom.
At Champlain, a penthouse in 1981 sold for $216,800. Despite the inflated price
tags, early buyers flocked in from Brooklyn, Denver, New Jersey and Canada,
where Reiber and Goldlist had business and personal ties.”
In one specific case, the buyer of a fifth floor two-bedroom
condo in 1982 was the mistress of Jose Santacruz Londono, the lead money
laundering overseer of the Cali, Colombia cocaine cartel. According to the USA
Today, “Working from a network of Panamanian banks and corporate shell companies”
Londono’s financial advisers “moved money from street drug sales in the US to
Panamanian banks, and from there, to European and Colombian accounts and
corporations.”
The USA Today also interviewed drug smuggler Pedro “Peggy”
Rosello from his prison cell in Miami. Rosello explained that the Surfside
location was perfect for drug kingpins to host parties and reside
“under-the-radar” away from Miami Beach where all of the attention was focused
on the drug wars of the 1980s. Rosello was planning on purchasing the
fifth-floor condo unit he had been renting under an alias before he was
indicted “for his role in Miami’s biggest cocaine ring.”
Laundering experts stressed that the presence of drug money
meant that the developers were also cutting corners in the design and
construction of the buildings “and anywhere else they could boost profits.”
Charles Intriago, a former prosecutor and an expert on money
laundering in Miami told the USA Today, “If the main players of a building are
engaged in corrupt activities, they are more than likely to be involved in
corruption in every single phase of it. That includes from the time the person
buys it, to the construction, to the completion and the sales of it. There’s
going to be a temptation to cut corners, and Miami was—and is—fertile ground
for this. That Surfside tower is no exception.”
Intriago’s reference to the present is significant. While
the USA Today report provides ample evidence of the thoroughly corrupt and
criminal operations that comprise the 40-year socioeconomic background to the
collapse of the Surfside condo on June 24, this is no aberration or unique set
of circumstances within American capitalism.
The death of 98 people in Surfside is the responsibility of
the entire layer of corporate and financial elites who have, with the full
cooperation of US government regulatory bodies, accumulated trillions of
dollars in wealth over the four decades that began with the installation of the
Reagan administration in 1980.
It should be pointed out that just as the real estate
parasites were laundering drug money in Miami-Dade County real estate deals,
the CIA and the Reagan White House were using drug money from Colombian-based
crack cocaine sold on the streets of Los Angeles to finance an illegal and
secret war against the government of Nicaragua.
If anything, the criminal and deadly impacts of the
relentless drive of the billionaire elite to enrich themselves—revealed most
starkly in their “herd immunity” response to the coronavirus pandemic that has
now killed nearly three quarters of a million people in the US—have reached
even more grotesque forms today than what was just getting started in the
1980s.
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