Franklin Foer, Russian-Style Kleptocracy Is Infiltrating America, The Atlantic, March 2019.
The collapse of communism in the other post-Soviet states, along with China’s turn toward capitalism, only added to the kleptocratic fortunes that were hustled abroad for secret safekeeping. Officials around the world have always looted their countries’ coffers and accumulated bribes. But the globalization of banking made the export of their ill-gotten money far more convenient than it had been—which, of course, inspired more theft. By one estimate, more than $1 trillion now exits the world’s developing countries each year in the forms of laundered money and evaded taxes.As in the Russian case, much of this plundered wealth finds its way to the United States. New York, Los Angeles, and Miami have joined London as the world’s most desired destinations for laundered money. This boom has enriched the American elites who have enabled it—and it has degraded the nation’s political and social mores in the process. While everyone else was heralding an emergent globalist world that would take on the best values of America, Palmer had glimpsed the dire risk of the opposite: that the values of the kleptocrats would become America’s own. This grim vision is now nearing fruition.
However, in the wake of 9/11
Title III of the patriot Act, the International Money Laundering Abatement and Anti-terrorist Financing Act, was signed into law little more than a month after September 11.This section of the bill was a monumental legislative achievement. Undeterred by the smoke clouds of crisis, representatives of the big banks had stalked the Senate, trying to quash the measure. Citibank officials reportedly got into shouting matches with congressional staffers in the hall. This anger reflected the force of the patriot Act. If a bank came across suspicious money transferred from abroad, it was now required to report the transfer to the government. A bank could face criminal charges for failing to establish sufficient safeguards against the flow of corrupt cash. Little wonder that banks fought fiercely against the imposition of so many new rules, which required them to bulk up their compliance divisions—and, more to the point, subjected them to expensive penalties for laxity.
There is, alas, another "however":
But nestled in the patriot Act lay the handiwork of another industry’s lobbyists. Every House district in the country has real estate, and lobbyists for that business had pleaded for relief from the patriot Act’s monitoring of dubious foreign transactions. They all but conjured up images of suburban moms staking for sale signs on lawns, ill-equipped to vet every buyer. And they persuaded Congress to grant the industry a temporary exemption from having to enforce the new law.The exemption was a gaping loophole—and an extraordinary growth opportunity for high-end real estate. For all the new fastidiousness of the financial system, foreigners could still buy penthouse apartments or mansions anonymously and with ease, by hiding behind shell companies set up in states such as Delaware and Nevada. [...] Much of the money that might have snuck into banks before the patriot Act became law was now used to purchase property.
Naturally enough there's more, lots more, in the article.Nationwide, nearly half of homes worth at least $5 million, the Times found, were bought using shell companies. The proportion was even greater in Los Angeles and Manhattan (where more than 80 percent of Time Warner Center sales fit that description). As the Treasury Department put it in 2017, nearly one in three high-end real-estate purchases that it monitors involves an individual whom the government has been tracking as “suspicious.” Yet somehow the presence of so many shady buyers has never especially troubled the real-estate industry or, for that matter, politicians. In 2013, New York City’s then-mayor, Michael Bloomberg, asked, “Wouldn’t it be great if we could get all the Russian billionaires to move here?”