The United States is actually harboring these criminals as part of its economic warfare on China, and in a pathetic attempt to equalize the lopsided balance of trade resulting from the ill-conceived industrial policy of de-industrializing the United States, and exporting manufacturing to China.

Huge amounts of ill-gotten gains are flooding out of China as corrupt officials disparately attempt to avoid the hash punishments being doled out for corruption, under the administration of president Xi Jinping.

"Chinese Billionaire Mining Tycoon Executed"
NYT ~ February 9, 2015 Web Link

You have to wonder how when the average income in China is one quarter that of the US just how all the 20 million multimillionaires who have expressly said they want to move to california have made their money?

It makes a mockery of paying tax for "defence in the pacific" as the new locus of warfare against China who is building islands on coral reefs to secure their military position when the realtors greedily sell off whole chunks of the very best parts of america to those same friends of the "communist" party pay with suitcases of cash!

If hey are not allowed to smuggle money out of China and not allowed to smuggle money into the US why then are realtors allowed to sell them real estate?

And can we please have this vital discussion without cries of racism? I am not talking here about ABC or ABK or ABVs. AB anything. Or the wave who came from Hong Kong after the Chinese took it back to avoid the CCP regime .

I am talking about the avalanche of dubious money that is buying up the best parts of America from under our noses. Its a matter of nationality, legality and national security not race.

There have been articles in "The Economist" about this. It seems that Chinese multimillionaires and billionaires have been threatened with seizure of assets by their communist government. They fear their government, and so flee it. They hide their assets by investing in multimillion-dollar houses, usually more than one.

Others less wealthy take out huge loans from Chinese banks then leave in the middle of the night. There were articles about this in the WSJ and NYT as well as "The Economist". Those people never even tried to repay the loans, and the Chinese government has vowed to have them extradited and prosecuted ( probably executed).

We have a Chinese client who fled China in the Seventies as a child with his parents. He told of his parents sewing money, gold, and jewels into their clothing and then wearing three layers of clothing each ( parents and children) as they fled in the night to Taiwan. They used gold, cash, and jewels to bribe people to look the other way.

The strange thing is that none of these immigrants seem to have any desire to become citizens, despite decades of residence. It seems to me that they would be far more safe if they did, ecause China could not extradite them from the U.S. However, many appear to believe that the communist government will soon be overthrown and they can return to China.

In the meantime, the real estate ( both commercial and residential) that they own is technically a little colony of China. It feels as if we are literally losing our country.

It goes both ways. There are plenty of economic criminals in China and plenty of dubious Americans in the Cayman Islands or other tax havens. With enough money, the rich can buy their way into a forgiving country.

Is there any due diligence oversight required when one accepts an all-cash offer for a home? Or does it not matter where the cash came from and whether it's even legal?

Apparently, if you apply for a mortgage the lenders scrutinize where your down payment came from.....

However, when paying with a briefcase full of cash, they only check that it isn't counterfeit!

Money talks, the one eternal truth.

@Cash Offers
I wonder if Ken DeLeon could enlighten us on the legal aspects of accepting an all cash offer from a Chinese national.
This seems like an area in which he has quite a bit of experience.

@Dubious Distinction

Why would someone go to a lender if they were going to make an all cash offer?

I would love it if the Weekly would follow up on this from a local angle. It shouldn't be difficult to check to see whether any of the local all-cash buyers have been accused of financial crimes abroad.

Kim Heng (Director of Asian Operations for DeLeon Realty) and Michael Repka (managing broker and general counsel for DeLeon Realty) published the article linked below in January of this year.

According to the two authors, this form of "commerce" is being fostered by the federal government.

"Obama's new visa law opens the American door to Chinese buyers"
Palo Alto Weekly ~ January 23, 2015 Web Link

@ local story, I think buyers can hide behind shell corporations/names and take steps to prevent property taxes from being listed online, which is how purchase prices are often deduced - this is what the ultra elite do here already (like billionaires, when they purchase or sell property and want the details kept private). Obviously, we have a range of all cash buyers, ranging from legit persons who were successful in business overseas and wisely wish to get their money out of a communist country, to possibly full-blown, big-time corrupt persons we don't want in this country. Probably hard to sort out. Meantime, the residential real estate markets in select areas is gone wild. What I read is that when these persons/entities go to sell, THEN there may be a problem for the subsequent buyer (owing to IRS rules). Apparently, the burden of proper tax reporting/payments on the sale from foreign buyers in placed on the BUYER! So buying from someone nebulous, who previously purchased on an all-cash/overseas/non US citizen basis, THEN creates issues. Will be tricky down the line.

More research reveals that due to the CCP wanting to stimulate the economy loose money means that much money is "loaned" out at usurous rates. These people then cash it in in Hong Kong and flee the country. This is a good idea because there are no laws in China, no bankruptcy courts, no honest police, so its just a matter of getting away with what you can. Amorality pervades the society. And these are now the folk who are buying up the houses near you while we all stand around saying that its not PC to criticize immigrants. Well to that I say that its not only unfair on the people priced out of the property in the towns their parents contributed to for a decades, the schools their parents volunteered at, but its also not fair on legitimate immigrants.

Something has to be done. The Fed doesnt have the stomach having to turn a blind eye to every illegality in China from spying on down, because we outsourced all our manufacturing there so are dependent upom them for stuff and if we trigger the collapse of their economy they will try to sell the Fed T bonds they hold triggering a crash here. Maybe Jerry Brown can bring in a law that requires the realtors to disclose the names of the purchasers and their visa status.

I've spoken about this with some parents from China at our kids' elementary school. Most of them are just dual-income couples--mostly engineers with advanced degrees--who have worked hard at tech companies and saved their money to buy modest houses in our town. They are not the amoral criminals described here.

Anyway, they've said that given that real estate in Beijing and Shanghai has appreciated over 10x in the last decade, those who bought in at the right time have indeed made big profits and seek to invest this money overseas, both to secure a more stable life for their kids in case things go south in China and yes, to keep the money farther from the reach of the unpredictable government.

Then you have plenty of Asian American families like ours whose parents immigrated to this country decades ago who haven't had financial ties to China since before Don Draper was selling used cars.

My guess is that the hard-working dual-PhD couples and the Asian Americans probably constitute over 80% (90%?) of the Asian families in town. Those who hit it big in real estate and are looking to diversify their investments are a small minority. And that leaves the amoral criminals described here. But they really are a small group.

Let's not work ourselves up into a frenzy over some trumped up story about evil Chinese stealing our country, OK? We've already played that "yellow peril" card in the 1980s over the Japanese (and earlier, with the shameful internment of Japanese Americans in the 1940s based on suspicions that they were all spies for Japan).

The overwhelming majority of Asians here and in other Silicon Valley communities just want good lives for their families. If you look at us with disdain, thinking that we are ruining your community, you yourselves are ruining the community.

Fortunately, despite the hysteria promoted on these boards, our family's in-person interactions with our fellow Palo Altans have been uniformly positive. [Portion removed.]

It has always been so easy to simply buy a degree or credential in Asia; that it is hard to know who is really what they say they are.

The same goes for those unbelievably high test scores to gain admission to Western universities (immigrate). You pay someone else to take the test for you, or you pay a cram school to give you the answers to memorize, or fly to a less policed country (like Vietnam) to take the tests there since the proctors are easier to pay off.

Cheating is a part of everyday life in Asia. I have lived and worked in two Asian countries for over 10 years. It is a different way of thinking. What they consider good business to get ahead, would be criminal in western countries.

I think ANOTHER that there is absolutely no connection between the illegal smuggling of cash out of China in suitcases to buy up houses in Palo Alto and the shocking internment of Japanese in WW2. You are making the connection because it both involves Asian people. I am not a racist therefore I dont see the connection. This is not about Asians.
This is specifically about the reported by realtors and those who work with them that a substantial amount of real estate in SValley is being bought by Chinese nationals with cash in suitcases, for the express purpose of getting citizenship here. And because they are purchasing both the house and the citizenship and the schools etc. they are obviously prepared to pay a lot more which prices Americans, of all stripes, out of the market. [Portion removed.]

A few years ago, we rented a total dump in Old Palo Alto. Our monthly rent was deposited into a bank account in a Taiwan. The home had been shown to us by a woman who said she was an old classmate of the owner. She told us she lived in Palo Alto Hills. She told us that she was doing a favor for the owner by showing his homes for him.
I learned that he owned NINE properties in the area, with multiple homes in Palo Alto. This occurred at a time when we spent every weekend for YEARS looking at homes here, and getting outbid on all of them. Every time we sat down to write an offer we were outbid. It was extremely stressful to quickly look at dilapidated homes during the week, take time off from a new job to make an offer, raise our young elementary school kids, and learn a new job here.

One time we were outbid by a consortium of foreign buyers.

With the shortage of housing in this area, am I wrong to think it is unfair for people to own 9 properties and have US dollars transferred to their overseas accounts?

We eventually DID report our former landlord, but it is not like they send you an acknowledgement that something was/will be done.

We eventually ended up buying a home WAY over the asking price and our affordability.
We will never be able to pay off the home loan in our lifetime, and will have to move somewhere else to die.

sue, we all agree that we would rather not have people who made money through criminal activities buying up houses in our neighborhoods. But when you are walking around town, are you able to determine how those you see made their money? Of course not.

But you can tell immediately what ethnicity someone is. And as many posts on this board demonstrate, it's very to seize upon ethnicity as a quick, easy way to draw conclusions about people. A lot of here people are saying things like, "I'm not racist, I have nothing against Asian Americans or honest immigrants, I just don't like criminals from China." But then many people, perhaps the same ones, write very angrily about how Palo Alto is being ruined by "Tiger Moms" and unfriendly Asians who don't "assimilate" enough to their liking (I'd like to see how easy they would find it to assimilate if you were to plunk them down in a city in China--and tell them that it is rude to speak to fellow Americans in English when in public--but that's another topic!)

So this resentment that is allegedly aimed only at the "bad" Asians very easily becomes resentment at Asians in general. I think many of you should be honest with yourself: if you see a group of Asians at the park and you feel yourself getting a bit riled up because of this, is this really because you've been able to determine that these are members of the Chinese underworld who have made their money illegally?

Or are you really getting riled up simply because there is something unsettling about seeing so many foreign people who belong to a different race from your own?

It's very easy to demonize people from a different race. American history has showed that again and again. We interned the Japanese Americans, not Italian Americans or German Americans. We enslaved black-skinned people from Africa, not white people from Europe. Auto workers in Detroit in the 1980s destroyed Japanese cars with baseball bats, not BMWs and Volvos.

I'm not giving these examples as a rant against America. We are a country that can elect an African American as president after enslaving people from that race less than two centuries ago, a country whose legal system can go from oppressing gay people to granting them the right to marry in less than a generation. These are things that show how great the United States is, how tolerant we are, how we are able to change for the better.

So please, try to be more open minded and less angry when it comes to your neighbors.

[Post removed.]

The only person conflating international criminals with all Asians is you. No one is saying that this multicultural society should be divvied up along racial lines - except you it seems. What I am saying is that reluctance to identify criminal activity due to well meaning but muddled people such as yourself is not going to help clear headed policy which aims to remove these crooks from our midst.

So now six people who went tow hook in the US, have been arrested for spying and stealing secrets from Colorado high tech companies. All six are Chinese citizens, and got advanced degrees here. They conspired together to steal information, return to China, and start their own factories to produce competing ( probably inferior) products.

Some of these ungrateful cads became profeasors at a major university in China. These people were probably given top priority to Americanschools because those schools wanted all that tuition paid for cash in advance
By the Chinese government. It is tantamount to being an accessory to treason.