Dubai unlocked: How dirty money finds a home in Dubai real estate – MaltaToday

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Written by OCCRP, E24, and 72 other media outlets, including MaltaToday

From the 37th floor of Dubai’s tallest skyscraper, the wife of an alleged Bosnian cartel member posted video after video on TikTok of the couple’s sleek rental apartment, often featuring their gray cat.

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The images provided just enough clues for reporters to identify the apartment’s precise location in the city’s iconic Burj Khalifa skyscraper — and the fact that it belonged to another target of law enforcement: Candido Nsue Okomo, the former head of Equatorial Guinea’s scandal-plagued national oil company, who is under investigation for money laundering in Spain. Okomo is also the brother-in-law of long-term President Teodoro Obiang Nguema Mbasogo, whose family is accused by French prosecutors of looting the African country’s public resources, which are heavily reliant on oil revenues.

It’s unclear whether the tenant, Dženis Kadrić, and his landlord Okomo knew of each other’s alleged misdeeds. But their convergence in a lease agreement is emblematic of modern-day Dubai, where secrecy and years of permissive policies have left its property rolls riddled with disreputable owners.

James Henry, a Yale Global justice fellow and expert on tax havens, likened the United Arab Emirates — a federation of seven emirates including Dubai — to “the Star Wars bar scene.”

“You walk in, you see the kleptocrats, to the left the oligarchs, in the middle, the money launderers, and to the back the dirty Russian commodity traders using it as a loophole for sanctions,” said Henry. “They’re all being serviced by the same basic financial secrecy.”

In the case of Okomo’s high-rise apartment, reporters from OCCRP’s Serbian partner KRIK first used TikTok videos to link the unit to the Kadrić, a former policeman who was arrested in Bosnia in February on suspicion of participation in organized crime, drug smuggling, and money laundering. He was released in May but remains under investigation. 

Geolocation specialists from the investigative outlet Bellingcat then used the videos to identify the specific apartment. Okomo’s ownership was confirmed by a 2023 rental contract and his listing in a tranche of leaked property data.

The leaked data provides a detailed overview of hundreds of thousands of properties in Dubai and information about their ownership or usage, largely from 2020 and 2022.

The data was obtained by the Center for Advanced Defense Studies (C4ADS), a non-profit organization based in Washington, D.C., that researches international crime and conflict. It was then shared with Norwegian financial outlet E24 and the Organized Crime and Corruption Reporting Project (OCCRP), which coordinated an investigative project with dozens of media outlets from around the world.”

“Corrupt actors and politically exposed individuals avoiding public accountability use secrecy jurisdictions like the UAE to hide assets in plain sight,” said Maria Giuditta Borselli, a Portfolio Manager at C4ADS.

Denise Sprimont-Vasquez, a Portfolio Manager at C4ADS, added that “these kinds of investigations are key to understanding how we can increase transparency for governments enabling illicit activity.”

Okomo is not the only owner accused of criminality who reporters found in the leaked data: after a six-month investigation led by OCCRP and the Norwegian outlet E24, reporters uncovered scores of convicted criminals, fugitives, political figures accused of corruption or their associates, and sanctioned individuals who have owned at least one piece of real estate in Dubai.

For example, not far from Okomo’s Burj Khalifa property is an apartment in the Burj Lake Hotel owned by Shwan Mohammad Almulla, an Iraqi-born British national who was indicted in the U.S. in 2021 over a bribery scheme to obtain millions in reconstruction contracts for Iraq.

Down the coast at the Grandeur Residences, a building on Dubai’s palm-shaped artificial archipelago, is a unit belonging to Joseph Johannes Leijdekkers, a 32-year-old also known as ‘Chubby Jos’ who is on the European Union’s Most Wanted List for alleged narcotics trafficking. 

And in the nearby Palm Tower Dubai, sits a flat owned by Danilo Vunjao Santana Gouveia, a Brazilian businessman who goes by Dubaiano.  Indicted on charges of money laundering and fraud for allegedly running a massive Bitcoin pyramid scheme in his home country, he has since taken up a career as a musician in Dubai, which he details on an Instagram account alongside photographs of him posing in front of various locations in the city, including the sail-shaped Burj Al Arab Jumeirah skyscraper.

These and numerous other property owners verified by OCCRP and its partners should have immediately raised red flags under any basic risk assessment. Yet none of the individuals were apparently prevented from buying properties in their own names. (Kadrić, Okomo, Almulla, Leijdekkers, and Santana Gouveia did not respond to requests for comment.)

The leaked data, which is mainly from 2022 and 2020, was initially obtained by the Center for Advanced Defense Studies (C4ADS), a Washington, D.C., nonprofit that researches international crime and conflict. It was then shared with the Norwegian financial outlet E24 and OCCRP, who coordinated Dubai Unlocked, a global investigative project involving journalists from more than 70 media outlets.

Reporters used the data as a starting point to explore the landscape of foreign property ownership in Dubai. They spent months verifying the identities of the people who appeared in the leaked data, as well as confirming their ownership status, using official records, open-source research, and other leaked datasets.

From Australian cocaine traffickers to the relatives of West African dictators and a coterie of sanctioned Hezbollah financiers, the findings reveal how the city has opened its arms to unscrupulous characters from around the globe.

Corrupt actors and politically exposed individuals avoiding public accountability use secrecy jurisdictions like the UAE to hide assets in plain sight,” said Maria Giuditta Borselli, a portfolio manager at C4ADS.

One of the people identified in the dataset is Hamidreza Ghanbari, one of the directors of Pilatus Bank, which lost its banking license in 2018 and was later slapped with a nearly five million euro fine for failing to comply with Malta’s anti-money laundering and terrorism funding regulations. Another is Binance founder Zhao, who had an office in Malta. Zhao’s Dubai link was revealed by Forbes, one of the investigation’s 74 partners from 58 countries.

Zhao owns a 11,600-square-foot, six-bedroom apartment in the 118, a luxury residential tower in downtown Dubai, which he purchased for $13.5 million in October 2021. Forbes matched property records in Dubai with corporate filings for Binance entities in Malta to identify the property.

UAE officials — including at the ministries of interior, economy, and justice — and Dubai Police did not respond to detailed questions, but the country’s embassies in the U.K. and Norway sent a brief response to reporters, saying that the country “takes its role in protecting the integrity of the global financial system extremely seriously.”

“In its continuing pursuit of global criminals, the UAE works closely with international partners to disrupt and deter all forms of illicit finance,” the statement added. “The UAE is committed to continuing these efforts and actions more than ever today and over the longer term.”

Why Dubai?

Forty years ago, Dubai was a nondescript Middle Eastern outpost, where a sandstorm could blow through mostly unimpeded from the Arabian desert into the Persian Gulf.

Today, it’s a global financial hub that boasts one of the world’s most recognizable skylines — a futuristic steel jungle where business leaders ink billions of dollars in deals, influencers model an existence draped in luxury, and Tom Cruise scales the world’s tallest building for a blockbuster film franchise.

The Gulf city is far from the only place where criminals and others have successfully stashed their wealth in luxury properties. New York City and London real estate have also been known to attract dirty money.

But experts say Dubai has a lot to offer, and not just in terms of its vast array of high-end skyscrapers and villas.

One pull factor, experts say, has been the emirate’s inconsistent responses to requests from foreign authorities for help arresting and extraditing fugitives.

Until recently, the UAE lacked extradition treaties with many countries, helping turn Dubai into a magnet for fugitives from around the globe. While UAE authorities have increased cooperation with foreign law enforcement in recent years, the government is still known for inconsistent responses to extradition requests.

The India-born Gupta brothers, who are accused of looting South Africa’s public funds through their close links with the country’s former President Jacob Zuma , offer a recent example.

Despite an extradition treaty between the two nations , last year the UAE quietly dismissed South Africa’s request to extradite Atul and Rajesh Gupta, who face charges of money laundering and fraud.  The move shocked South Africa, where authorities have said the UAE failed to provide “satisfactory responses” on the reasons behind the rejection. 

A UAE official did not reply to specific questions about the Guptas, but said it “works closely with international partners to disrupt and deter all forms of illicit finance.” The Guptas and Zuma did not respond to requests for comment.

According to Radha Stirling, an attorney and human rights advocate who leads the legal assistance organization Detained in Dubai, UAE authorities use high-profile fugitives as “bargaining chips.”

“The presence of extradition agreements between nations are not necessarily key to whether or not people are extradited,” she said. “What matters is what Dubai wants in return and whether that nation has something they want enough to barter.”

When asked about the country’s record on extraditions, Sauod Abdulaziz Almutawa, the

head of Dubai Police’s financial crime center,  stressed the recent arrests of those with red notices and said that extradition requests, which must pass through local courts, take longer to process and often face challenges from deep-pocketed defense teams.

“We are increasing our capacity, increasing and developing our resources … to meet the expectations of our foreign counterparts,” he added in an interview with Swedish Television (SVT) in March.

Getting off the ‘grey list’

Emirati authorities have tightened anti-money laundering regulations in recent years, particularly since the Financial Action Task Force (FATF), the inter-governmental anti-money laundering watchdog, added the UAE  to its “grey list” in 2022 for failures to effectively combat illicit money flows. After reportedly lobbying to be removed from the list, Emirati authorities were rewarded with good news in February: FATF credited the UAE for “significant progress” and cleared it from the extra monitoring.

But some experts have warned that the move was premature, or motivated by geopolitical concerns.

“Recent reforms to the penal code and judiciary might have sufficed to get Dubai lifted from FATF’s gray list this winter, but they haven’t substantively shifted the nature of the real estate market,” said Colin Powers, a senior fellow and chief editor for the Noria MENA Program, an independent non-profit research organization.

The reforms do not “change what makes the real estate market so attractive for storing wealth,” he said, citing buyers’ ability to disguise their ownership behind trusts, holding companies, and foundations.

An undercover consultation with one property salesman from the leading Dubai real estate development firm Damac in March suggests there are still some brokers willing to look the other way when it comes to the origin of their client’s funds.

In a tour of a Damac property, the salesman told Swedish Television (SVT) reporters they could buy the flat with “bags of cash” or cryptocurrency and face “zero question[s]” about the source of their funds.

“In properties you are not going to be questioned from any department…especially the developer himself,” the salesman said. “Anyone who wants to buy can buy.”

He also described how cash purchases of real estate are a way for clients to avoid questions from banks about the source of their money.

“If you sell the property and then you transfer all the amount in the bank account, then there is no problem, you will not be questioned from where you bring the cash to buy the property and then to put it in the bank,” the salesman said.

Reached for comment later, a Damac representative said the firm runs background checks of its clients, and that it is not the company’s policy to recommend customers buy in cash.

“Had your undercover reporter proceeded further through the sales process beyond the mere first encounter with a salesperson, they would have witnessed the scrutiny and the heightened measures we apply to transactions that trigger red flags,” Damac said, adding that the salesman’s statements would be investigated.

When told about the incident, the officer from Dubai police’s anti-money laundering police unit, Sauod Abdulaziz Almutawa, said the emirate has a “zero risk tolerance to noncompliance” and that actions are taken against those who turn a “blind eye” to the law.

“Dubai is not a safe haven for illicit funds for illicit actors. Dubai is a safe haven for legitimate commerce, for legitimate individuals who are hardworking and have earned what they have otherwise,” he added.

Melissa Sequeira, a customer service manager from Themis, a U.K.- and UAE-based firm that helps clients manage financial crime risks, praised Dubai’s tougher enforcement and increase in inspections of realtors in recent years. But she noted that change on ground level is still a work in progress, particularly among smaller firms with limited resources, in a sector where just a few years ago “you could buy a property with just a passport.”

The goal is to shift the “tone from senior managers, who are more focused on profit rather than stopping the global financial, negative impacts of crime,” Sequeira said.

When it comes to the UAE’s clearance from the FATF “grey list,” Jodi Vittori, a professor at Georgetown University who studies corruption and illicit finance, suggested that the current war in the Middle East may have been a factor. With the U.S. hoping the UAE and other allies in the Middle East will help with the daunting task of rebuilding Gaza, routing funding through a country flagged by FATF could be seen as untenable.

“The UAE’s facilitation of corruption, money laundering, and organized crime undermines larger Western efforts to fight everything from fentanyl to human trafficking to illicit financial flows,” Vittori said. “But it will be hard for Western governments to ask the UAE to rebuild Gaza and at the same time put pressure on FATF to put the UAE back on its money laundering grey list or otherwise sanction them.”

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