MIAMI — The eight story Courthouse Place office building in downtown Fort Lauderdale is a couple blocks from the Broward County courthouse, which makes it an attractive home for the dozens of lawyers and legal services companies that rent space in the building.
It even houses a few offices for prosecutors in Broward’s Drug Trafficking and Economic Crimes units.
That would seem to make it an unlikely destination for money launderers to invest drug trafficking proceeds, but federal prosecutors say it was purchased as part of a real estate buying spree fueled by drug money.
Sefira Capital, a Miami-based real estate investment firm, was accused by federal prosecutors in a 2021 civil forfeiture complaint of accepting millions of dollars worth of drug trafficking proceeds to fund its investments in commercial real estate in Florida and several other states between 2016 and 2019. It bought Courthouse Place in April 2017.
While pricey waterfront mansions in Miami and luxury Manhattan apartments have attracted greater scrutiny as money laundering targets, the example of Sefira Capital underscores how the opaque world of commercial real estate and pedestrian properties like Courthouse Place provide a similarly attractive vehicle for those looking to clean tainted cash. The fact that the company didn’t face any criminal consequences shows how the current legal framework, which doesn’t require firms like Sefira to vet the source of their funds, limits the penalties for those who enable these money laundering transactions.
What’s more, the Miami Herald’s review of leaked financial records shows that one of Sefira’s co-founders filed paperwork establishing his family as the primary beneficiaries of an offshore account in the British Virgin Islands holding millions of dollars during the time when his company was allegedly accepting those drug proceeds. Sefira appears to have also registered at least two companies in the British Virgin Islands in 2016, as well. None of these entities were listed in the federal complaint brought against the company, making it unclear whether prosecutors were aware of them.
In thecivil forfeiture complaint, prosecutors alleged that money invested by Sefira had been laundered through the Black Market Peso Exchange, a shadow financial system used by drug traffickers in Mexico and other countries to convert tainted U.S. dollars obtained from drug sales into clean currency in their native countries.
In an undercover operation, agents for the U.S. Drug Enforcement Agency were directed by money laundering brokers from the black market exchange to deposit millions of dollars in various accounts related to different Sefira properties in 2018 and 2019.
Three days after filing the complaint against various Sefira accounts and properties in January 2021, prosecutors reached asettlement with Sefirain which the company agreed to forfeit $22.5 million contained in various accounts and pay $6.5 million in lieu of giving up several properties.
Prosecutors didn’t bring any criminal charges against Sefira or its co-founders. Under the settlement, the company and its employees didn’t admit any “liability, fault, guilt or wrongdoing,” but the company agreed to perform due diligence “in a manner that is reasonably designed to prevent the receipt of funds derived from criminal sources.”
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Explore all your optionsDick Gregorie, a former federal prosecutor in Miami with extensive experience prosecuting drug traffickers and money launderers, said that such deals are typically an indication that the prosecutors either gave immunity to insiders cooperating with the investigation or couldn’t pin it on any of the company officials involved.
“Sometimes there just isn’t enough evidence about any one person,” he said.
In response to a detailed list of questions from the Herald, Sefira sent a statement saying it had no knowledge that any of the funds invested with the company came from illicit sources.
“The government’s lengthy investigation proved that there was no knowledge or intent on the part of Sefira; rather the forfeiture focused on the money itself that was 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 merely the passive recipient of the funds.”
Investment companies like Sefira don’t have the same due-diligence requirements as financial institutions such as banks, said Erica Hanichak, government affairs director for the nonprofit Financial Accountability and Corporate Transparency (FACT) Coalition, which seeks to combat money laundering.
“That’s a major obstacle for law enforcement to be able to crack down on criminals and their enablers,” she said.
Sefira Capital was spotlighted in arecent reporton 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, with the value of those properties exceeding $2.6 billion.
“The commercial real estate market is large, complex and incredibly opaque. It 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 minutes away from each other in the exclusive Presidential Estates gated community 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, Virginia, North Carolina and Maryland.
Courthouse Place was one of at least four properties Sefira purchased as part of 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 had paid for it in 2017. All together, they sold the four properties for nearly $15 million more combined than they had paid for them.
Sefira was also involved in developing an apartment complex called the Jaxon outside of Jacksonville and a storage facility in Naples and also had an ownership stake in a Hilton hotel in Cocoa Beach.
Bobby West, the managing partner of TriBridge Residential, which partnered with Sefira on the Jacksonville apartment complex and an apartment complex in the Atlanta area, said that while his company had a positive experience working with Sefira and no suspicions that the company had done anything wrong, they stopped doing business with Sefira after the federal complaint.
“Anybody with even an 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 were not accused of any wrongdoing.
Pandora Papers trail
Leaked records show that Galsky, one of the company’s two co-founders, was involved in registering an offshore company called Halfmune Holdings in the British Virgin Islands. The records show that 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 Morgan Stanley. Galsky signed a document in July 2017 establishing him and his family as the primary beneficiaries of the company, at the same time prosecutors say that his company was taking in laundered drug proceeds.
The document is contained within the Pandora Papers, a trove of more than 11.9 million records from 14 offshore providers that were leaked to the International Consortium of International Journalists, which shared the trove with the Miami Herald and 150 other news outlets.
The records also reference two seemingly related companies, Sefira Al Miss, Corp. and Sefira City Gate, Corp., that were registered in the British Virgin Islands in September 2016. Entities with similar names, listing Galsky and Attias as directors, were registered in Delaware soon after.
The Herald asked Sefira and Galsky about these offshore accounts, but their statement to the Herald didn’t contain any explanation for why they created them. Federal prosecutors and the DEA, who investigated Sefira, also didn’t respond to requests about whether they had been 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 earlier Panama Papers have also shown that bad actors also sometimes use these havens to hide illicitly obtained funds or evade taxes.
Sefira capital still exists on paper, but it isn’t clear whether the partnership between Galsky and Attias survived the civil forfeiture complaint. Four months after Attias and Galsky signed the settlement resolving the complaint, Attias created a new private equity firm called theMerak Group. His biography doesn’t mention Sefira Capital.
