Friday, January 14, 2022




Existing, under construction and planned future buildings, Miami's Brickell Avenue District

If you haven't visited Miami recently, it is in a state of rapid change. The Brickell Avenue financial district, now as densely packed as Manhattan, due to a massive commercial and residential building boom, is featuring still more extremely tall condominiums, hotels and office buildings. The Magic City is once again living up to its name.

While progress has been Miami's hallmark in recent decades, due to its climate and geography, additional new factors, such as the relocation of a large number of professionals working remotely, the emergence of a high tech sector in the local economy, due to a favorable tax environment, and the targeting of ultra-high net worth clients by luxury residential developers, have all created a perfect storm of constriction at a torrid pace.  

What this means for compliance officers is that several multi-million dollar condominiums and office buildings are coming available each month for purchase. The buyers, most of whom are foreign nationals, will result in huge potential profits for the developers, but they also represent a high level of risk. While closing those transactions are the objective, insuring that sophisticated financial criminals accomplish the placement of the Proceeds of Crime in those projects, through effective enhanced Due Diligence policies and procedures, is a major goal that may or may not be achieved without unusual measures.

If you know your history, or are old enough to have seen what happened to Miami in the "Miami Vice" era of the 1980s, what is often referred to as the Golden Age of Money Laundering occurred, and drug money laundering was rampant, out of control, and unmanageable for the financial sector, as well as law enforcement. It took several years, the passage of the Money Laundering Control Act of 1986, and the shift in the movement of narcotics, which mainly entered through Florida, towards Mexico, before the problems lessened here. To say it was a difficult period is being kind; it was rough.

The city fathers in Miami sorely want us to forget about the trials and tribulations of those years, but today's bankers and compliance officers were not here 40 years ago, and therefore never had to painfully learn the lessons of that dark period. Whether they are adequately prepared to fend off the money launderers of the 21st century, who use the Internet to facilitate bulletproof strategies and tactics, advanced technology, corrupt foreign officials, and tradecraft completely unknown to the average compliance officer, we cannot say, but it will challenge them in ways they must cope with, on a real-time basis, for today's compliance officers, realtors, bankers and developers can all end up in Federal Prison for Willful Blindness, should they fail to interdict dirty money.

The laundrymen barbarians will be at the gates of Miami; the question is, will the gatekeepers keep them out in 2025 ?

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