On the 74th floor of the Time Warner Center, Condominium 74B was purchased in 2010 for $15.65 million by a secretive entity called 25CC ST74B L.L.C. It traces to the family of Vitaly Malkin, a former Russian senator and banker who was barred from entering Canada because of suspected connections to organized crime. Last fall, another shell company bought a condo down the hall for $21.4 million from a Greek businessman named Dimitrios Contominas, who was arrested a year ago as part of a corruption sweep in Greece. A few floors down are three condos owned by another shell company, Columbus Skyline L.L.C., which belongs to the family of a Chinese businessman and contractor named Wang Wenliang. His construction company was found housing workers in New Jersey in hazardous, unsanitary conditions.
Behind the dark glass towers of the Time Warner Center looming over Central Park, a majority of owners have taken steps to keep their identities hidden, registering condos in trusts, limited liability corporations or other entities that shield their names. By piercing the secrecy of more than 200 shell companies, The New York Times documented a decade of ownership in this iconic Manhattan way station for global money transforming the city’s real estate market.
Many of the owners represent a cross-section of American wealth: chief executives and celebrities, doctors and lawyers, technology entrepreneurs and Wall Street traders.
But The Times also found a growing proportion of wealthy foreigners, at least 16 of whom have been the subject of government inquiries around the world, either personally or as heads of companies. The cases range from housing and environmental violations to financial fraud. Four owners have been arrested, and another four have been the subject of fines or penalties for illegal activities.
The foreign owners have included government officials and close associates of officials from Russia, Colombia, Malaysia, China, Kazakhstan and Mexico.
They have been able to make these multimillion-dollar purchases with few questions asked because of United States laws that foster the movement of largely untraceable money through shell companies.
Vast sums are flowing unchecked around the world as never before — whether motivated by corruption, tax avoidance or investment strategy, and enabled by an ever-more-borderless economy and a proliferation of ways to move and hide assets.
Alighting in places like London, Singapore and other financial centers, this flood of capital has created colonies of the foreign super-rich, with the attendant resentments and controversies about class inequality made tangible in the glass and steel towers reordering urban landscapes.
Where it made landfall in New York, in the wake of the Sept. 11 attacks, was the Time Warner Center. More than a decade on, even as a row of sky-piercing palaces rises on the southern rim of Central Park, the Time Warner Center remains the New York archetype of the global phenomenon, reflecting intertwined trends — the increasing sums of foreign money in high-end real estate and the growing use of shell companies.
About $8 billion is spent each year for New York City residences that cost more than $5 million each, more than triple the amount of a decade ago, according to the website PropertyShark. Just over half of those sales last year were to shell companies.
The Times examination reveals the workings of an opaque economy for this global wealth. Lacking incentive or legal obligation to identify the sources of money, an entire chain of people involved in high-end real estate sales — lawyers, accountants, title brokers, escrow agents, real estate agents, condo boards and building workers — often operate with blinders on. As Rudy Tauscher, a former manager of the condos at Time Warner, said: “The building doesn’t know where the money is coming from. We’re not interested.”
As an indication of how well-cloaked shell company ownership is, it took The Times more than a year to unravel the ownership of shell companies with condos in the Time Warner Center, by searching business and court records from more than 20 countries, interviewing dozens of people with close knowledge of the complex, examining hundreds of property records and connecting the dots from lawyers or relatives named on deeds to the actual buyers.
Yet in some cases it is nearly impossible to establish with certainty the source of money behind shell companies. Purchasers can register shell companies in the names of accountants, lawyers or relatives. Purchases are often made not just by individuals but on behalf of groups of investors or numerous family members, further obscuring the origin of the funds. What is more, ownership of shell companies can be shifted at any time, with no indication in property records.
The high-end real estate market has become less and less transparent — and more alluring for those abroad with assets they wish to keep anonymous — even as the United States pushes other nations to help stanch the flow of American money leaving the country to avoid taxes. Yet for all the concerns of law enforcement officials that shell companies can hide illicit gains, regulatory efforts to require more openness from these companies have failed.
“We like the money,” said Raymond Baker, the president of Global Financial Integrity, a Washington nonprofit that tracks the illicit flow of money. “It’s that simple. We like the money that comes into our accounts, and we are not nearly as judgmental about it as we should be.”
In some ways, officials are clamoring for the foreign wealthy. In New York, tax breaks for condominium developments benefit owners looking for a second, or third, residence in one of Manhattan’s premier buildings. Mayor Michael R. Bloomberg said on his weekly radio program in 2013, shortly before leaving office: “If we could get every billionaire around the world to move here, it would be a godsend.”
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Among the Time Warner Center owners identified by The Times are at least 17 billionaires on Forbes magazine’s annual list of the world’s richest people. Five of the world’s leading art collectors own units, as do eight people who have been chief executives of major companies. And it has been home to numerous celebrities, including the singers Jimmy Buffett and Ricky Martin, the New England Patriots quarterback Tom Brady and the talk show host Kelly Ripa.
A look behind some doors revealed more complicated tales.
Units 72B and 51E are owned by the Amantea Corporation, which The Times traced to a mining magnate named Anil Agarwal. His company was fined for polluting a major river near a copper mine in Zambia, which sickened nearby residents. And judicial committees in his native India determined that his company had violated the land rights of an indigenous tribe near a proposed mine.
When Anna Ai Fang purchased Condominium 58E in 2004 for $2.1 million, the forwarding address on the deed was a decidedly more modest location: her dorm, Ruggles Hall, at Columbia University. At the time, her father, Fang Fenglei, had ended a long career running state-affiliated banks in China and would soon begin working for Goldman Sachs.
Unit 62CE belongs to Prime International Management Group, which in turn is controlled by Alexander Varshavsky, who runs auto dealerships in Russia.
Few, if any, questions were raised by those involved in the deal when Mr. Varshavsky paid cash for the 4,300-square-foot apartment. But his condo shopping did not go unnoticed.
“Agents observed defendant Varshavsky enter several buildings in the Central Park area with a real estate agent, including 25 Columbus Circle, New York, New York,” according to a criminal complaint filed in federal court in Newark, recounting surveillance by federal agents at the Time Warner Center. “In June 2011 defendant Varshavsky purchased an apartment located at that address for approximately $20.5 million in cash.”
In December 2013, Mr. Varshavsky, who is now a United States citizen, was charged with failing to report the existence of a foreign bank account. A lawyer for Mr. Varshavsky disputed the allegations and said he expected the complaint to be dropped.
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What is more, Mr. Parrott said, the skyrocketing prices of the pieds-à-terre are affecting the price of real estate in the city more broadly. “There’s a downside to having such pressure at the top. It pulls up the prices overall. When owners of $10 million condos see that there’s a big market for $95 million condos, they’re more likely to raise their prices,” he said. “Then the person at $2 million raises his prices, then the person at $1 million sees that and there aren’t any prices below $1 million.”
Through a spokesman, Mr. Bloomberg said last month that he had hoped billionaires who moved to New York would not simply be part-timers but would live in the city and pay taxes “so we could use that revenue for government services that, incidentally, disproportionately benefit lower-income New Yorkers.”
Some local politicians have suggested taxing the owners of pieds-à-terre who are not city residents.
“We are spending money to keep them safe and maintaining the infrastructure,” said Brad Lander, a city councilman. “Should there be the equivalent of a commuter tax? An international residents tax?”
A proposal from the Fiscal Policy Institute would impose a graduated tax on pieds-à-terre worth $5 million or more. The group estimates it would generate $665 million a year in revenue for the city, mostly from owners of the approximately 445 apartments valued at more than $25 million.
There is no simple way to unmask ownership of a shell company. Exploring each of the more than 200 shell companies that have owned units in the Time Warner Center became its own journey, with its own surprise ending.
The case of Columbus Skyline, which paid $25.6 million for three condos, began with two clues: a barely legible signature and a forwarding address.
The signature on the deeds was difficult to read, but in one spot it could be made out: Wang Zi. A search of that name did not yield obvious results, but a Wang Zi did register a phone number at Time Warner. The Times cross-referenced that number and found it was tied to a firm called MQ Realty with an address at an apartment in a public housing complex in Chinatown. A visit to that apartment yielded little more than a conversation in Chinese with a neighbor who said the person behind MQ Realty had recently moved. It was a dead end.
The second clue proved more promising. Columbus Skyline was formed in New York State. While the state filing does not list the name of the L.L.C.’s owner, it does have an address: 10 East 39th St., Suite 1110. In public records, one name comes up as having used that address: Wang Wenliang.
Further searches turned up a prominent Wang Wenliang. This Mr. Wang is a former municipal official in Dandong, a city on China’s border with North Korea, and a member of the National People’s Congress, China’s parliamentary body. Among his businesses is a construction empire that has worked on numerous consulates and embassies for the Chinese government, and he is worth hundreds of millions of dollars. He is on the board of trustees of N.Y.U., where he donated $25 million.
But establishing that Mr. Wang from Dandong was the owner of the Time Warner condos required more confirmation.
The lawyer listed on the condo sales was David Glassman. A search of commercial property filings showed that Mr. Glassman had also done legal work for an affiliate of Mr. Wang’s company, China Rilin Construction Group.
When The Times called Mr. Glassman, he briefly discussed the condos and said he would ask Mr. Wang if he would be interviewed about his ownership.
Another round of searches found a less glamorous side to real estate used by Mr. Wang’s company in the United States. In February 2011, the housing task force in Jersey City followed up on a complaint from a resident on Pavonia Avenue about the number of people living in a single-family residence rented by Rilin. “We conducted the inspection and uncovered conditions that were very troubling to say the least,” wrote Mark Redfield, the task force chairman.
“There were 15 Asian males with no identification, passports, or work visas all residing in this one-family attached rowhouse,” an internal email from Mr. Redfield said. “The house was divided up into sleeping quarters to accommodate 28 roomers,” he wrote, adding, “The crammed quarters were extremely unsanitary and posed an imminent hazard.”
The same day, Jersey City officials found “the same conditions” at another house that was used by Rilin for its workers, according to city records.
In 2013, Jersey City inspectors reported finding an illegal rooming house at another location used by Rilin. An internal city email said the building was “housing Chinese workers who work for the Chinese Embassy as construction workers. This is the same group China Rilin Construction Corp. that the task force issued summonses to in 2011 for housing multiple Chinese workers.”
Rilin paid fines of several thousand dollars for the 2011 violations. The outcome of the 2013 case was unclear from city records, but the company said it had been dismissed.
Mr. Wang’s lawyer said Rilin “took the allegations very seriously, and the reported violations were all quickly remedied by the company or dismissed.” He disputed the idea that 28 people lived at the Pavonia Avenue house, saying the top bunks had been used for storage. He said the Wang family had purchased the Time Warner condos through a shell company partly because a disgruntled former employee had threatened to harm them.
When The Times asked Ms. Sample, the Time Warner real estate agent who represented Mr. Wang, for information about his condo purchases, she shot back: “How do you know about him?”
Reporting was contributed by Xu Wang from New York; Carlotta Gall and Youssef Gaigi from Tunis; Alejandra Xanic von Bertrab from Mexico City; Joe Cochrane from Jakarta, Indonesia; Niki Kitsantonis from Athens; Andrew Roth from Moscow; and Vinod Sreeharsha from Rio de Janeiro. Lisa Schwartz, Neha Thirani Bagri and Amy Qin contributed research.
Design, graphics and production by Tom Giratikanon, Mika Gröndahl, Josh Keller, Yuliya Parshina-Kottas, Graham Roberts, Shreeya Sinha, Rumsey Taylor and Jeremy White. Illustrations by Michael Hoeweler.
Sources: New York City sales data from PropertyShark. National sales data from First American Data Tree. New York City building model from the Center for Advanced Research of Spatial Information at Hunter College and the New York City Departments of City Planning and Buildings.
Note: The graphics represent the number of apartments on each floor, not their location. The representation of the Plaza does not reflect hotel use.
