SCUTTLEBUTT

Crime fighters call the practice of recycling dirty money — which is becoming popular among pork barrel lovers — layering by tapping bank transfers and casinos, placements in shell companies or nominees, and through the purchase of high-value assets like luxury homes, condos, vehicles, and insurance products.

Sales of luxury condos, townhouses, and high-value lots were lately reported to be on an upswing, possibly linked to the floodgate investigations.

A real estate veteran intimated to Nosy Tarsee that there was an unprecedented increase in purchases of properties in luxury subdivisions, all traced to personalities involved in the flood control scandal. Some purchases were in the names of staff of political kingpins.

Such top-level purchases and the price cuts given by realty developers were the drivers of growth post-POGO.

Turning to property purchases converts the suspect cash into legitimate-looking, title-based assets that can later be sold, mortgaged, or rented.

The scheme also employs developers, brokers, and registrars of deeds to register property to shell corporations, trusts, or nominee purchasers so the true beneficial owner is obscured.

Prime residential purchases — whether legitimate or tainted — affect the market.

The integration of illicit funds into property can support prices in specific enclaves, support developer confidence, and trigger more launches aimed at the luxury segment.

But it also creates systemic vulnerabilities: when investigators freeze or seize assets (as is happening in “Floodgate”), forced sales or a legal cloud on titles can cause sudden illiquidity and downward pressure.

Part of the post-POGO “demand” for prime residential units could be re-allocated capital from illegal gambling and proceeds from the floodgate scandal rather than new organic consumption, Nosy Tarsee was told.