Follow the houses 2: A DIY GuidePosted: April 12, 2012
It’s hard to find assets squirreled away in Swiss banks or buried in an offshore company in the Bahamas. Houses, however, are difficult to hide. As anyone who owns a house knows, a real-estate purchase leaves a trail of public records. That’s why they provide relatively easy pickings for investigative journalists. Reporters may not be able to find evidence of bribery or of other corrupt acts, but with some real-estate sleuthing, it’s possible to trace where the proceeds of crime or corruption went. Following the houses, therefore, can be as productive as (and sometimes easier than) following the money.
It helps that land records are publicly available in most places – if not online, in public registers accessible to citizens. The New York Times’ recent piece on Russian billionaires gobbling up $1-billion worth of the fanciest real estate in Manhattan and elsewhere in the United States was made possible in part by the availability of real-estate records stored in online databases throughout the U.S.
In New York, it’s possible to search ACRIS, the city’s online property registry, by party (owner) name or address. Last year, my students were looking into investments made by a shadowy Chinese company in Guinea.
In late 2009, the Guinean government had signed a mining contract with the Chinese company, giving it rights to virtually all of the country’s unexplored mineral resources. The mining minister was the main proponent of the deal, which was signed amid rumors of corruption and payoffs. Through ACRIS, the students found deed records showing that just weeks after the contract’s signing, the Guinean mining minister bought a $1.5-million condominium on Manhattan’s Upper East Side – and paid for it in cash.
Early this year, New York was buzzing with news of the sale of a swanky penthouse owned by former Citibank chairman Sanford Weill. The price tag for the nearly 7,000-square-foot apartment on 15 Central Park West was a record-breaking $88 million. When the deed was finally put on the ACRIS database, it revealed little about the identity of the buyer, a company with the innocuous name of Property NY 100-11 LLC. (An annotated copy that shows what to look for in deed records is here.) A search with the New York State corporations database showed the company was formed only in October 2011, just a month before the sale. There was little information there, as the U.S. doesn’t require detailed disclosures for most private companies.
That would have been a dead end, except that it was hard to keep the sale of such prized property secret. Before long, real-estate sources were leaking like sieves: the buyer was Russian fertilizer magnate Dmitry Rybolovlev. As the New York Observer reported, clues to his identity also came from an unlikely source: his wife, who was suing him for divorce in a Swiss court and accusing him, among other things, of purchasing the $88-million penthouse so he could divert funds ahead of the impending divorce. So yes, divorce suits are great sources of asset information.
Searching for property records in the U.S.
Like in many countries, the U.S. has no centralized real estate registry. This means you’d need to know the county where the property is located to even begin a search. A good place to start hunting for the properties of Russian or Third World elites would be New York as well as San Francisco, neighboring San Mateo (where the town of Hillsborough, one of the wealthiest cities in the U.S., is located) and Los Angeles. Palm Beach and the Hamptons are also good hunting grounds. Some years ago, I had a student who followed the trail of properties acquired by the Venezuelan “bolibourgeoisie” — supporters of Hugo Chavez who were buying up real estate mostly in Florida.
Links to free online property records databases maintained by county recorder’s offices throughout the U.S. can be found on Searchsystems, a commercial public records provider. Not all counties, however, allow online searches by owners’ names (San Francisco, for example, only allows searches by address.) Some like Clark County, Nevada, where Las Vegas is located, not only enable searches by owner names and address, they also provide maps and aerial views of the building. Remember to search using full names, not nicknames — if you’re searching for movie actors, don’t use screen names.
The easiest way to search for property countrywide is to access subscription-only databases like Nexis, which aggregates real estate and other records from all over the U.S. Record retrievers can do a manual search for records that aren’t online. The Public Record Retrieval Network lists names of people who will provide this service for a fee. They mainly do local searches, so it would help if you know or suspect where the property is located.
It’s best to go directly to property databases kept by county recorders rather than rely on commercial “people finders” like Intelius or People Smart that list addresses linked to people via utility bills or mailing lists. Just because an address is associated with a person doesn’t mean that person owns the property. County recorders are the official repository of land titles and are therefore the best and most trustworthy source.
Caution: Don’t go by first names and last names alone, as there may be other people with similar names. Check out other identifiers, such as middle initials or dates of birth. Obtaining the original documents and comparing signatures on deed documents with those in other records is one way to check if the person named in the deed is the same person you’re looking for. A phone call or two to that address or to neighbors might also help. And of course, nothing beats going to the property and knocking on the door. In the end, there’s only so much that can be done through online research.
Another word of warning: The smarter buyers don’t register property in their own names. Instead, they use the names of relatives or form private companies to disguise the ownership, making the properties more difficult to trace. This was exactly what the Russian billionaire Rybolovlev did, so the missing information had to be provided by human or other sources.
Still, its amazing what you can find online about Manhattan real estate: Rybolovlev’s building had a website listing apartment numbers and the millions they were sold for. It also provides photographs of and lavish detail: “soaring ceilings and windows, individual wine cellars with solid oak cabinetry, a private in-house chef , and some of the largest penthouse apartments and terraces the city has ever seen.” The apartment itself is featured in its full glory on the pages of Architectural Digest, another good source of information on luxury real estate.
Information on less pricey buildings, including photographs, are available on sites like Trulia and Zillow. And it’s astonishing how many You Tube videos there are extolling the virtues of Manhattan real estate .
Triangulating information from tips and records
In the Philppines and other countries where real-estate records are not online, it takes more time and resources to search for property. About a dozen years ago, I was lining up at the tax assessor’s office in Quezon City, a suburb of Manila, in search of property that had reportedly been sold to Philippine President Joseph Estrada. All I had was a tip — the name of the original owner — and so I asked to see the real-estate tax records for that person. He was a wealthy man, however, and had an entire filing cabinet of documents. I didn’t know where to begin. I had a sense of the general area where a newly built Estrada mansion was supposedly located. It wasn’t that far from my office, and so I actually went from street to street, asking around (There was really no other way to ask the question except, Is the president building a house in this neighborhood? Subsequently, I figured out that asking neighborhood associations and security guards in the gated communities of the rich was a more efficient way to get information. )
I eventually got a tip about the address because Estrada had indiscreetly invited some friends over to a party at the property, which eventually became known as the Boracay mansion — named after the famous island resort because it had a swimming pool with artificial sand and a wave-making machine.
The property, however, was not in Estrada’s name, but in that of a company called St. Peter’s Holdings. A trip to the SEC (which meant having interns line up for three hours to get photocopies of the corporate registry) showed the incorporators of the company were Estrada’s housing secretary (no kidding!) and several other unrecognizable names. Our researcher googled the names and found out they were all associates of the same law firm. And bingo! One of the partners of the law firm was the presidential legal counsel.
We then went back to the corporate registry and searched for companies incorporated by any and all members of that law firm since Estrada became president. That turned up even more properties, and so the search continued. Eventually, what clinched it for us were the patterns we found in the president’s real-estate acquisitions. None of the purchases were in his name or those of his family members, but he used the same law firms, the same architects, the same nominees, the same landscape designers. Several of the houses even had the same layout — Estrada went home to a different house every night, and he didn’t want to have to navigate unfamiliar ground each time.
A full account of that investigation is in this paper.