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Acknowledgements: the lead investigator on this Global Witness report was Ken Silverstein. Global Witness is grateful to NBC News for making available to us material from an NBC and Reuters interview with Alexandre Henrique Ventura Nogueira. Unless otherwise indicated, this material is referenced in the text as (NBC/Reuters).
“Every other country goes into these places and they do what they have to do… It’s a horrible law and [the Foreign Corrupt Practices Act] should be changed.”
In the early 2000s, a series of bankruptcies meant Donald J. Trump was shunned by most lenders. Struggling for credit, he started selling his name to high-end real estate projects. This report examines in detail the criminal connections that propelled one such project – the Trump Ocean Club International Hotel and Tower in Panama – and how this case bears some of the same disturbing hallmarks as other Trump developments.
Since he became President of the United States, numerous investigations and articles have probed Trump’s business dealings and his alleged links to criminals and other shadowy characters. It is understood that Special Counsel Robert Mueller’s investigation under the Department of Justice will also examine his real estate business. This is important because it seems likely that, following his various bankruptcies, at least a part of Trump’s business empire has been built on untraceable funds, some apparently linked to Russian criminal networks.
Trump may not have deliberately set out to facilitate criminal activity in his business dealings. But, as this Global Witness investigation shows, licensing his brand to the luxurious Trump Ocean Club International Hotel and Tower in Panama aligned Trump’s financial interests with those of crooks looking to launder ill-gotten gains. Trump seems to have done little to nothing to prevent this. What is clear is that proceeds from Colombian cartels’ narcotics trafficking were laundered through the Trump Ocean Club and that Donald Trump was one of the beneficiaries.
One key player in the laundering of drug money at the Trump Ocean Club was notorious fraudster David Eduardo Helmut Murcia Guzmán, whom a U.S. court subsequently sentenced to nine years for laundering millions of dollars' worth of illicit funds, including narcotics proceeds, through companies and real estate.
Another was Murcia Guzmán’s business associate, Alexandre Henrique Ventura Nogueira, who brokered nearly a third of the 666 pre-construction unit sales at the Trump Ocean Club and claims to have sold 350-400 units overall. Ventura Nogueira’s sales brokerage was critical to ensuring the project’s lift-off and Trump’s ability to earn tens of millions of dollars.
The warning signs were there from the outset. The Trump Ocean Club, one of Trump’s most lucrative licensing deals to date, was announced in 2006 and launched in 2011, a period when Panama was known as one of the best places in the world to launder money. Whole neighborhoods in Panama City were taken over by organized crime groups, and luxury developments were built with the purpose of serving as money laundering vehicles.
Moreover, investing in luxury properties is a tried and trusted way for criminals to move tainted cash into the legitimate financial system, where they can spend it freely. Once scrubbed clean in this way, vast profits from criminal activities like trafficking people and drugs, organized crime, and terrorism can find their way into the U.S. and elsewhere. In most countries, regulation is notoriously lax in the real estate sector. Cash payments are subject to hardly any scrutiny, giving opportunistic and unprincipled developers free rein to accept dirty money.
In the case of the Trump Ocean Club, accepting easy – and possibly dirty – money early on would have been in Trump’s interest; a certain volume of pre-construction sales was necessary to secure financing for the project, which stood to net him $75.4 million by the end of 2010. Trump received a percentage of the financing he helped secure, and a cut on the sale of every unit at the development.
He and his family have made millions of dollars more from management fees and likely continue to profit from the Trump Ocean Club. Eager for the project’s success, Trump and his children have participated directly in marketing, management, and even project design. According to broker Ventura Nogueira, Trump’s daughter Ivanka attended at least 10 meetings with him and project developer Roger Khafif.
A large number of those involved with the Trump Ocean Club in its early phase were Russian and Eastern European citizens or diaspora members. In an interview with NBC and Reuters, Ventura Nogueira said that 50 percent of his buyers were Russian, and that some had “questionable backgrounds.” He added that he found out later that some were part of the Russian Mafia.
Since the Russian government’s alleged interference in the 2016 election, a lot has been made of Trump’s heavy reliance on funds from Russia for his licensing deals. Trump relying on funds from Russia is not in itself a problem – some of these funds are no doubt from legitimate sources. What is deeply problematic, however, is the fact that some of this money appears to have come from criminal networks.
Donald Trump has incessantly promoted himself as a successful and viable businessman, and this was critical to his success in the 2016 presidential election. But this report presents evidence that this façade was built, at least in part, on ventures used to launder cash generated by criminal activities. Trump’s unscrupulous business dealings and blindness to potential illegality raise serious questions about his suitability to govern the most powerful country in the world.
The dubious dealings of Trump the businessman also raise questions about the commitment of Trump the President to tackling crime and corruption. Trump got elected by repeatedly pledging to “drain the swamp”, but in the nine months since his inauguration he has actually taken steps that could worsen corruption in the U.S. and internationally. Indeed, one of his administration’s few legislative successes to date has been to overturn the implementing regulation of a ground-breaking anti-corruption law.
Money Launderers Making a Splash
Global Witness has been exposing money laundering for almost a decade and has played a leading role in developing strategies to tackle it, such as the creation of public registries listing the true owners of companies. Our investigations show just how damaging the laundering of dirty funds can be. Far from being a victimless crime, money laundering keeps poor countries poor, props up dictatorships and fuels corruption and criminality.
This report’s findings come as the laundering of money into the U.S. is receiving increasing attention from law enforcement. HSBC agreed to pay almost $2 billion in fines in 2012 for offences including the laundering of over $800 million from Mexican drug cartels. This laundering was so routine that criminals deposited the money in suitcases designed to fit exactly the tellers’ windows in HSBC’s Mexican branches.
Meanwhile there are several international law enforcement investigations, including by the Federal Bureau of Investigation, into the looting of billions of dollars from 1 Malaysian Development Berhad (1MDB), Malaysia’s sovereign wealth fund. Some of this money was used to buy works of art, including a Van Gogh and a Monet, high-end real estate in New York and, ironically, to bankroll the Hollywood blockbuster The Wolf of Wall Street.
We call on appropriate law enforcement authorities, including Special Counsel Robert Mueller and Congress, to investigate these allegations and, if appropriate, hold President Trump accountable for his actions.
The solutions to the problems set out in this report are clear:
1. Appropriate law enforcement authorities, including Special Counsel Robert Mueller, should investigate these allegations and, if appropriate, hold President Trump accountable for his actions. The congressional committees looking into this issue should likewise investigate these allegations and, if appropriate, hold President Trump accountable for his actions.
2. Every country should require all companies and trusts to disclose who ultimately owns and controls them and make this information public.
3. Every country should require the real estate sector to know who their clients are and the source of their funds as a precaution to ensure that dirty money is not being laundered into the property market.
4. Every country should require lawyers who carry out transactions for their clients, including the buying and selling of real estate and the creation of companies, to know who their clients are and the source of their funds.
We have approached all the subjects of this report for their comments and have included those responses we had received at point of publication.