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I'm a business journalist and a fiction author. My novel Mute is available now from Silver Leaf Books.

Monday, April 18, 2016

The Panama Papers: Money laundering loopholes are nothing new

No one who’s been paying attention to the real estate or financial markets should be surprised over the off-shore tax havens and money laundering schemes uncovered by the release of the Panama Papers. World governments have been aware of these loopholes for years.

The only question: Will the publicity storm prompt the United States and other governments to stop the flow of dark money?

Hundreds of journalists around the world [sadly, not including me] worked through the International Consortium of Investigative Journalists to comb through about 11.5 million leaked documents from the Panamanian law firm and corporate register Mossack Fonseca. Among the 214,000 offshore companies it listed, some were used to conceal from the public and from governments that politically connected individuals, known criminals and people who had no apparent sources of wealth controlled significant amounts of money. In some cases, these offshore companies owned real estate, including in Miami.

Of course, not all of these companies were registered offshore. States like Delaware, Nevada and Wyoming also allow LLCs to be registered without listing a managing member.

The fact that this is going on isn’t news. The Panama Papers made headlines because it named names.

Hey, how did that hair dresser from South America buy a $1 million condo on Brickell? You can't ask those questions if you don't know who's really buying.
Law enforcement has known since the 1980s that dirty money found its way into Miami real estate through shell corporations. Watch the documentary “Cocaine Cowboys” to see how drug money built much of this town. In 2013, I wrote the story “Condos, Cash, and Criminals” in the South Florida Business Journal addressing the concerns of many experts that dirty money was contributing to the surge of cash real estate deals.

Politicians and law enforcement have known this was a problem for decades. And yet, it has persisted. Who knows who really owns our real estate? Many people would rather not know, as long as they're making money off it.

Having covered both banking and real estate in South Florida, I can tell you that I often run into companies with no clear path of ownership. Sometimes they’re registered in Delaware, or offshore in places the Isle of Jersey or the British Virgin Islands.

Other times, they’re Florida-registered LLCs but the managing member clearly isn’t the owner. There’s no requirement that Florida LLC’s list the owner, only a person to handle the company’s affairs. Sometimes this is innocent, such as a famous athlete who makes his attorney the manager of the LLC because he doesn’t want to be bothered at his home.

It could also be used by money laundering drug dealers to set up straw managers to buy real estate through. There’s really no way I can tell that the LLC isn’t funded by terrorists, drug dealers or corrupt officials.

Some homes are bought by trusts. It’s extremely difficult for the public to know who controls them. You just have to trust that the lawyers who set them up did their due diligence.

As we saw in the Panama Papers, there’s a temptation for incorporation law firms to think money first, due diligence second. Plus, law firms don’t face the strict “know your customer” and “source of funds” rules that banks must comply with.

U.S. authorities could ask more of incorporation law firms. Federal and local governments could take measures to require ownership disclosure for LLCs. Authorities have started asking title companies to disclose the LLC owners in $1 million-plus deals in Miami and $3 million-plus deals in Manhattan

Until authorities start taking aggressive measures to promote disclosure, it’s clear they aren’t serious about addressing this problem.

It’s not so easy, though. Miami, New York and many other international cities are enjoying windfalls of foreign cash that have spurred building booms. That’s created jobs and increased property taxes, although some argue it’s also made real estate less obtainable for working families. I have a feeling that some, or perhaps most, Miami condo projects would fall apart if these loopholes were closed.

Should we start turning money away because we don’t trust the source? Or do we turn a blind eye?

Sunday, February 14, 2016

Miami’s wealthy have failed the Frost Museum of Science

Seemingly everyone in Miami loves the idea of a world class science museum downtown but few are willing to pay for its construction, except for public officials using taxpayer money and the Frosts.

The Patricia and Phillip Frost Museum of Science would be a showcase for wonder and innovation in the heart of the city. In the middle of building the $305 million project, the non-profit ran out of cash. It burned through $160 million in county funds and it’s not asking for another $45 million up front instead of over time. The suggestion that a community redevelopment agency should direct its property tax funds to the museum instead of building facilities for low-income residents (what else is new?) has drawn controversy.

In a city inundated with cash and frequented by many of the world’s wealthiest people, hardly anyone has stepped up to make a significant donation to this project. I’ve heard from countless developers building downtown that the Frost Museum would be a great draw and benefit their projects. Condo investors see it as another amenity for the neighborhood, one they don’t have to pay association dues for. Many downtown retail and hospitality business owners expect it to attract more visitors.

Then why are so few of them cutting big checks? Do they expect to reap all the benefits without contributing to the cause?

The Frosts are by far the biggest donors with $45 million followed by the Knight Foundation with $10 million. If this were New York or Boston or Washington, D.C., there would be a long list of headline making donors after that. The fact that there’s not, really says something.

People come to Miami and buy real estate, expensive clothes, meals from celebrity chefs, and six-figure cars. Corporations and investment funds are paying record prices for Miami property, from apartment buildings to retail strips. They rarely make a true investment for the good of the community, which is what this museum is all about.

People like to brag about Miami being on the cutting edge of STEM, the next city on the rise. In reality, we’re playing catch up with other regions of the country when it comes to science. The Frost Museum could inspire a generation of local scientists, maybe even creating some jobs that actually pay enough to afford living here.

Is anyone going to step up and invest in Miami’s future?

Sometimes return on investment isn’t measured on a balance sheet. 

Thursday, December 3, 2015

Posting assault on victim's Facebook page backfires for these two

Most Facebook users have probably had the experience of a person something on their page they'd rather not share with the world - a drinking face, bad hair day, the ex you were supposed to be done with. Delete! A video of you curled up in the fetal position getting beaten would be a most unwelcome addition to your Facebook page.

That's exactly what two (alleged) assailants did to Frankie Santana, a Detroit resident with cerebral palsy, which restricts his movements. The two 20-year-olds stole his phone, recorded his beating on it and then posted it all over Facebook, including on the victim's page.

See a snippet of what they did from this report via Fox 2 in Detroit.

 It certainly wasn't hard to catch them and prosecutors should have no problem finding enough evidence.

As I've highlighted in my novel Famous After Death, it's not enough for bullies and killers to hurt their victims physically, they want to shame them emotionally. Social media has become their weapon of choice.

Hopefully next time someone tags Mr. Santana on Facebook, the message will be more uplifting.

Sunday, November 8, 2015

Six Can’t Miss Events at the Miami Book Fair

There are more reasons than I can count to catch the Miami Book Fair during its Nov. 15 to 22 run. I’ll list six here, and maybe I’ll see you there during my presentation.

I’m honored to be one of more than 450 authors participating in the Miami Book Fair this year with the event in its 32nd edition. It’s the largest book fair in the United States and it has something for everybody, including kids, readers of Spanish and Creole, and comic book fans. For avid book shoppers, the street fair at Miami Dade College’s downtown campus on Nov. 20 to 22 is a fantastic opportunity to buy books at a discount.

There will be author presentations both during the street fair and in the week leading up to it. Here are some recommended picks.

An insider’s take on the economy

Robert B. Reich, the secretary of labor in the Clinton administration, will discuss his new novel Saving Capitalism: For the Many, Not the Few. There’s an argument between centrist Democrats and Democratic Socialists like Bernie Sanders whether capitalism is out of control and working to the advantage of the wealthy.

The news man ditches the teleprompter

I used to watch the evening news all the time. I rarely catch it now, but when I do and I see all the ads for medication, well, that reveals the demographic of who’s still tuned in. Tom Brokaw anchored the NBC Nightly News from 1982 to 2004, during a time when it was the main source of news for many people. Not only will he discuss his broadcast journalism career, he’ll reflect on his battle with blood cancer as told in A Lucky Life Interrupted: A Memoir of Hope.

The architect of Obama’s Hope

David Axelrod was the chief campaign adviser to President Obama in 2008 and 2012, so you either love him or you hate him. Either way, it’s interesting to hear what he things of the current presidential campaign and whether the Super PACs and their unlimited donations have changed the playbook needed to win. His new book is Believer: My Forty Years in Politics.

Women of Science

Three women who wrote science-themed books will share the spotlight. I’m particularly interested in Ashlee Vance’s biography of Elon Musk, who started forward-thinking companies like Tesla and SpaceX. Margaret Lazarus Dean wrote Leaving Orbit: Notes from the Last Days of American Spaceflight - a subject that’s depressing for me as an author of science fiction. How did we fall so far behind in space travel and, really, aerospace. Maybe it’s because we need more women involved in hard sciences, as Eileen Pollack tackles that subject in The Only Woman in the Room: Why Science is Still a Boy’s Club.

A Journey to the Dark and Supernatural

Tananarive Due writes novels that are both creepy and touching so I’m eager to hear what she’s crafted in her story collection Ghost Summer.  I saw her at the Book Fair a few years ago and she was amazing. She’ll be joined by Benjamin Percy, author of The Dead Lands, and Jennifer McMahon, author of The Night Sister.

Authors in the Line of Fire

A group of brave authors will take questions before a live audience from New York Times Book Review Editor Pamela Paul. Among my favorite, thriller writer Brad Meltzer. I’ve interviewed him several times and he has a great sense of humor, so this should be fun.

While you’re at the Book Fair be sure to check out my presentation “Murder Most Viral” on Sunday, Nov. 22 at 10 a.m. I’m humbled that they’ve selected me to speak in a solo gig and that’ll be cool because I have a lot to say about how social media is promoting violence. If you haven't heard me read from Famous After Death, you are in for a shock.

Grab your coffee and hit the fair early to beat the traffic.

Friday, September 18, 2015

New Wynwood could price out hipsters who made it thrive

In Miami real estate, you either sprint or fall on your face. There's no such thing as steady growth. So goes the case with Wynwood.

Creative planning by artists and local investors transformed the neighborhood from empty warehouses into a district with stunning street art, popular restaurants and bars and emerging retail.

It's expected that property values would grow to reflect the promise. Instead, many recent deals have given Wynwood higher valuations than established retail markets in wealthy areas, such as Coral Gables and Las Olas in Fort Lauderdale.

My print edition centerpiece in the South Florida Business Journal explores where the neighborhood is heading.

The fear of many is the higher property valuations will lead to expensive rents that will price out the artists and local businesses that made Wynwood so successful. I interviewed several property owners that said they would keep key local groups like Panther Coffee and artists, but they're investing tens of millions of dollars because they expect a substantial return from new tenants. Will those big money tenants change the hipster character of Wynwood? Can they sell enough goods to justify $80 per square foot in rent?

Certainly, the new zoning that Miami could finalize for Wynwood will increase the ability of developers to build apartments, condos and hotels there. They're targeted the young, creative professional class. However, it's important that homes in Wynwood are priced below those in areas such as downtown, Brickell and Edgewater. Construction costs aren't going to differ much between those neighborhoods so Wynwood developers will need to find a way to be less expensive for residents.

I'll tell you this about Wynwood, bring it up to any real estate professional in Miami and they're either all in or they won't touch it. There's no such thing as middle ground, or a steady pace, in Miami.

Friday, August 28, 2015

Murder on the Beach gets Famous After Death

I just delivered copies of my novel Famous After Death to the delightful Murder on the Beach independent bookstore in Delray Beach. It's in the Pineapple Grove neighborhood just north of downtown, an area that's always a blast to visit for its restaurants, bars and shops.

Come see me at Murder on the Beach on Oct. 7 at 7 p.m. for a reading and signing of Famous After Death. Just ask the people who saw me at Books & Books this month, you need to hear the way I voice the characters in this story about murder gone viral.

Murder on the Beach, located at 273 Pineapple Grove Way (N.E. 2nd Ave.), is a bookstore that specializes in mystery, thrillers, true crime and horror. It also has games, and creepy decorations.

And since it's in downtown Delray Beach, once my event's finished you can go out and have a drink.

Sunday, August 23, 2015

My radio interview: What drives teenagers to murder?

Cyrus Webb interviewed me for his ConversationsLIVE show on Blog Talk Radio this week. After reading my novel Famous After Death and writing a glowing review of the book, he asked me in-depth questions where the story came from.

Here’s a sample of what went down on the air:

When did you first have the seed planted that this was a book that you wanted to write?

I started working on it in 2010. I had the initial idea that I wanted to write about teenagers who were putting their crimes on the internet to get attention for it. I knew this was beginning to happen and I wanted to understand. These were teenagers who were smart enough to do it anonymously. And real life sort of beat be to the punch. You had a freshman at Rutgers jump to his death after his roommate filmed him making out with another man and his roommate put it on his Facebook page to bully him. There was a column by Leonard Pitts in the Miami Herald who wrote about how people are using the internet to bully people and to trash them here and the internet can bring out the ugliness with us. And that stuck with me. That was the point of my novel to show how people are using social media in the wrong way.

There was something that I was not expecting that came up in this book and that was the family element. Did you know going in that you wanted to make these young people more than just savage, that you wanted to show us the human side of them by letting us see their family?

I felt it was important to understand all of them got into a situation where they were juvenile delinquents, where they wanted to play pranks on people online, not really caring if the people got hurt. This doesn’t happen randomly. There’s a reason. The lead character Jorge, he’s very much a loner. He’s trying to make friends. He wears big black trench coats in Miami and doesn’t fit in. His mother is sort of OCD and so he is trying to get attention from the other boys. He wants to use his intelligence only to act like he’s cool and fit in.

Kelso is from a wealthy family where his dad is a motocross star and his younger brother is really the big guy in the family because he’s a great skater. He’s a better skater than Kelso. His brother always finishes first and Kelso is finishes distance. So he’s trying to show that he’s the man, that he can get a lot of hits from his videos. He feels like he’s passed over for his brother.

And Chris, who acts in a mean way toward everybody, he’s from a broken home where his father left his mother and started a modeling agency, and he’s with all the models. So he’s feels that angry inside that his family was broken and he’s angry at both parents and wants to take it out on everyone else.

Go here to listen to the full interview with Cyrus Webb.