As The Global Rich Buy Up London Homes, Britons Ask If The Money Is Legit : Parallels Many of London's expensive homes are owned by obscure foreign companies. Critics say the city has become a haven for those hiding ill-gotten gains, and the government is starting to respond.
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As The Global Rich Buy Up London Homes, Britons Ask If The Money Is Legit

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As The Global Rich Buy Up London Homes, Britons Ask If The Money Is Legit

As The Global Rich Buy Up London Homes, Britons Ask If The Money Is Legit

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ARI SHAPIRO, HOST:

The world's wealthiest people have bought some of London's most luxurious homes. That has some Britons asking whether the deals are legitimate. NPR's Lauren Frayer visited some of the neighborhoods where the money is ending up.

LAUREN FRAYER, BYLINE: Britain's Parliament is a five-minute walk away, and so is the Prime Minister's office. I'm in the lush Whitehall Gardens looking out on the Thames River. This is prime London real estate. And it's where Igor Shuvalov, a senior Russian government official, owns a three-bedroom flat that cost $18 million.

ANDREW FOXALL: The symbolism behind Mr. Shuvalov owning a flat here - staggering distance from the Commons and walking distance from Downing Street - is deeply, deeply significant.

FRAYER: Andrew Foxall runs a Russia Studies Centre. He's watched the world's elite pour its money into London property.

FOXALL: It's a relatively safe place to store money, ill-gotten or legitimately. A number of these individuals have allegedly been involved in money-laundering, tax evasion scandals.

FRAYER: British landlords, realtors, tax authorities are all happy to take their cash without questioning where it comes from.

FOXALL: For the very reason that the moment you went after one person you would have to go after everybody. No government would want to be responsible for such a negative impact on the London property market.

FRAYER: London is expensive. Many young professionals have to commute in from the suburbs. But in the city center, there are whole neighborhoods of multi-million dollar homes that are empty. They're owned by Arab sheiks, Russian oligarchs, Nigerians, Chinese - who might visit once a year, if that.

ROMAN BORISOVICH: There's nothing wrong with that if the money is demonstratively clean. What we don't want is to have proceeds of crime invested in London - as it happens right now.

FRAYER: Roman Borisovich is a Russian banker turned anti-corruption activist. He says London bricks and mortar have become the currency of international crime.

BORISOVICH: Right, so what we're looking at here, if you want to step outside - the most spectacular sight other than Witanhurst.

FRAYER: He takes me on a tour past a house linked to the sons of the former Egyptian president, Hosni Mubarak, past a stretch of buildings owned by Dmitry Firtash, a Ukrainian billionaire indicted in the U.S. for money-laundering. Last summer, Borisovich made a documentary called "From Russia With Cash."

(SOUNDBITE OF DOCUMENTARY, "FROM RUSSIA WITH CASH")

UNIDENTIFIED WOMAN: Increasing evidence suggests the London property boom is partly fueled money-laundering.

FRAYER: Borisovich went undercover pretending to be a corrupt Russian official. He told five realtors he wanted to buy a multi-million dollar property with money stolen from the Russian government. All five were willing to help. Their commissions would've been in the six figures.

Hello, Trevor, nice to meet you.

TREVOR ABRAHMSOHN: Very nice to meet you.

FRAYER: Trevor Abrahmsohn was not one of those realtors, but he also sells luxury properties in London. He offers his clients complete anonymity.

ABRAHMSOHN: There's no acknowledgments that the property's for sale, but it could be bought.

FRAYER: What is the benefit of doing it that way?

ABRAHMSOHN: Because nobody knows about it.

FRAYER: Abrahmsohn says most of his high-end sales go through offshore companies. But that's changing. Now, the U.K. charges higher tax on properties owned by companies rather than real people. And starting next month, foreign buyers and owners will have to be identified. Abrahmsohn worries the super-rich will take their money elsewhere.

ABRAHMSOHN: Other countries would kill to have these wealth creators spend their money in this country. We want these characters to come here and invest. Unfortunately, we're putting them off.

FRAYER: That is London's dilemma - keep foreign investment, but also fight corruption and make the city affordable for the people who do live here. Lauren Frayer, NPR News, London.

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