Miami company used pharmaceutical funds for real estate, feds say, but without fees

The eight-story Courthouse Place office building in downtown Fort Lauderdale is just blocks from the Broward County Courthouse, making it an attractive location for dozens of lawyers and legal services companies that rent space in the building.

It even houses a few offices for prosecutors from Broward’s Drug Trafficking and Economic Crimes units.

That would seem to make it an unlikely destination for money launderers looking to invest drug trafficking proceeds, but federal prosecutors say the item was purchased as part of a real estate buying spree fueled by drug income.

Sefira Capital, a Miami-based real estate investment company, was accused by federal prosecutors in a 2021 civil forfeiture complaint of accepting millions of dollars in drug trafficking proceeds to finance its investments in commercial real estate in Florida and several other states between 2016 and 2019. She purchased Courthouse Place in April 2017.

As expensive beachfront mansions in Miami and luxury apartments in Manhattan have attracted greater attention as targets for money laundering, the Sefira Capital example highlights how opaque the world of real estate commercial and walkable properties like Courthouse Place provides an equally attractive vehicle for those seeking to clean up contaminated real estate. species. The fact that the company has not suffered any criminal consequences shows to what extent the current legal framework, which does not oblige companies like Sefira to verify the origin of their funds, limits the sanctions for those who allow these operations of money laundering.

Additionally, the Miami Herald’s review of leaked financial documents shows that one of Sefira’s co-founders filed documents establishing that his family was the primary beneficiary of an offshore account in the British Virgin Islands holding millions of dollars at the time his company would have accepted. these drug products. Sefira also appears to have registered at least two companies in the British Virgin Islands in 2016. Neither entity was listed in the federal complaint filed against the company, making it unclear whether prosecutors were aware of them.

In the civil forfeiture complaintprosecutors alleged that the money Sefira invested was laundered through the Black Market Peso Exchange, a parallel financial system used by drug traffickers in Mexico and other countries to convert tainted U.S. dollars obtained through the sale of drugs in their own currency in their country of origin.

As part of a sting operation, agents of the United States Drug Enforcement Agency were instructed by black market money laundering brokers to deposit millions of dollars into various accounts linked to different properties of Sefira in 2018 and 2019.

Three days after filing a complaint against various Sefira accounts and properties in January 2021, prosecutors reached a settlement. settlement with Sefira in which the company agreed to forfeit $22.5 million held in various accounts and pay $6.5 million in lieu of giving up several properties.

Prosecutors have not filed any criminal charges against Sefira or its co-founders. As part of the settlement, the company and its employees did not admit any “responsibility, fault, guilt or wrongdoing,” but the company agreed to conduct due diligence “in a manner reasonably designed to prevent the receipt of funds from criminal sources. .”

Dick Gregorie, a former Miami federal prosecutor with extensive experience prosecuting drug traffickers and money launderers, said such deals usually indicate that prosecutors have either granted immunity to cooperating insiders. investigation, or were unable to attribute it to any of the companies. officials involved.

“Sometimes there just isn’t enough evidence on a particular person,” he said.

In response to a detailed list of questions from the Herald, Sefira sent a statement saying she had no knowledge that any of the funds invested in the company came from illicit sources.

“The government’s lengthy investigation has proven that there was no knowledge or intent on Sefira’s part; the confiscation instead focused on the money itself received by Sefira from a third-party investor. The investigation revealed that Sefira had no practical way of knowing whether the funds were clean or not; they were only passive recipients of the funds.

Investment companies like Sefira don’t have the same due diligence requirements as financial institutions like banks, said Erica Hanichak, director of government affairs for the nonprofit Coalition for Financial Responsibility and Transparency. Companies (FACT), which seeks to combat money laundering.

“This is a major obstacle to law enforcement being able to crack down on criminals and their accomplices,” she said.

Sefira Capital was highlighted in a recent report on money laundering in commercial real estate, among 25 cases in which “illegal, allegedly illicit or suspicious funds” had been invested in commercial real estate in the last 20 years, the value of these properties exceeding 2, 6 billion dollars.

“The commercial real estate market is large, complex and incredibly opaque. This makes it an attractive target for money laundering,” said Hanichak, whose anti-money laundering group was one of the authors.

Sefira Capital was first registered with the state of Florida in the fall of 2015 by co-founders Aby Galsky and Mijael Attias, neighbors who own multi-million dollar homes within minutes of each other in the exclusive gated community of Presidential Estates in North Miami Beach.

Between the company’s founding and the federal civil forfeiture complaint, the company was involved in at least 15 projects, according to archived copies of its website, including numerous hotels and office buildings in Florida, Georgia, in Virginia, North Carolina and Maryland.

Courthouse Place was one of at least four properties purchased by Sefira in a joint venture with Miami-based Highline Real Estate Ventures, including two office complexes in Weston and an office park in Tampa, all acquired in 2016 and 2017 for nearly $40 million. They sold Courthouse Place in 2020 for $4.4 million more than they paid in 2017. In total, they sold the four properties for almost $15 million more than they had paid for them.

Sefira also helped develop an apartment complex called Jaxon outside Jacksonville and a warehouse in Naples and also had an interest in a Hilton hotel in Cocoa Beach.

Bobby West, managing partner of TriBridge Residential, which partnered with Sefira on the Jacksonville apartment complex and an Atlanta-area apartment complex, said that while his company had a positive experience collaboration with Sefira and that she had no suspicion that the company had done anything wrong. , they stopped doing business with Sefira after the federal complaint.

“Anyone who makes even the slightest allegation is unfortunately toxic,” he said.

David Moret, the founder of Highline Real Estate Capital, did not respond to multiple requests for comment.

TriBridge Residential and Highline Real Estate Capital have not been accused of any wrongdoing.

Pandora Papers track

Leaked documents show that Galsky, one of the company’s two co-founders, helped register an offshore company called Halfmune Holdings in the British Virgin Islands. Records show the company held $4 million in stocks, bonds and cash between accounts at EFG Capital, a Swiss private bank with an office in Miami, and at Morgan Stanley. Galsky signed a document in July 2017 establishing him and his family as the company’s primary beneficiaries, at the same time prosecutors say his company was receiving the proceeds of drug laundering.

The document is contained in the Pandora Papers, a trove of more than 11.9 million documents from 14 offshore vendors that were leaked to the International Consortium of International Journalists, which shared the trove with the Miami Herald and 150 other media outlets.

The documents also refer to two apparently related companies, Sefira Al Miss, Corp. and Sefira City Gate, Corp., which were registered in the British Virgin Islands in September 2016. Entities with similar names, listing Galsky and Attias as directors, were registered in Delaware shortly thereafter.

The Herald asked Sefira and Galsky about these offshore accounts, but their statement to the Herald contained no explanation as to why they created them. Federal prosecutors and the DEA, which investigated Sefira, also did not respond to requests asking whether they were aware of the offshore accounts.

There is nothing illegal about operating offshore companies, which can maximize wealth and minimize taxes. But investigations such as the Pandora Papers and the earlier Panama Papers have also shown that bad actors sometimes use these havens to hide illegally obtained funds or to evade taxes.

Sefira’s capital still exists on paper, but it is unclear whether the partnership between Galsky and Attias survived the civil forfeiture suit. Four months after Attias and Galsky signed the agreement resolving the complaint, Attias created a new private equity firm called the Merak Group. His biography does not mention Sefira Capital.

Ben Wieder is an investigative reporter in McClatchy’s Washington bureau and for the Miami Herald. He previously worked at the Center for Public Integrity and Stateline. His work has been honored by the Society of American Business Editors and Writers, the National Press Foundation, the Online News Association and the Association of Health Care Journalists.