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Why price paid for ex-judge’s Miami condo wasn’t publicly disclosed

Offshore corporations: The secret shell game

Offshore corporations have one main purpose - to create anonymity. Recently leaked documents reveal that some of these shell companies, cloaked in secrecy, provide cover for dictators, politicians and tax evaders.
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Offshore corporations have one main purpose - to create anonymity. Recently leaked documents reveal that some of these shell companies, cloaked in secrecy, provide cover for dictators, politicians and tax evaders.

When Brazilian news outlets found out then-Supreme Court chief justice Joaquim Barbosa had bought a Brickell condo in 2012, they asked the well-respected jurist how much he paid.

Barbosa refused to say.

The problem? In Florida, real-estate sales are public.

But not Barbosa’s.

Miami-Dade County property records seemed to suggest the 61-year-old paid a big, fat zero for his one-bedroom condo at Icon Brickell, one of the trendy neighborhood’s best-known condo towers.

 
Miami-Dade County property records suggested that Joaquim Barbosa, the former chief of Brazil’s Supreme Court, paid nothing for a condo at Icon Brickell. That turned out not to be the case. ROBIN HILL / Related Group

Sales prices aren’t listed on deeds — but they can be calculated from a documentary stamp tax levied on real-estate sales and recorded on deeds.

In Miami-Dade, the tax amounts to 60 cents for every $100 paid for the property.

The seller customarily provides the funds for the tax. The buyer’s closing agent then pays the tax to the county and lists the amount on the deed, which is a public record.

The deed for Barbosa’s unit listed no tax.

Three real-estate attorneys consulted by the Miami Herald could see no reason why Barbosa’s unit wouldn’t be subject to the tax.

“This is a very unusual deed,” said one of the attorneys, Joe Hernandez of South Florida law firm Weiss Serota.

As it turns out, Barbosa didn’t get the apartment for free. The unit’s seller sent the Miami Herald a contract showing Barbosa paid $335,000 in cash. The tax on that sale would have amounted to about $2,000.

Three days after the Miami Herald published this story online — and more than a month after it first contacted her — Barbosa’s Miami attorney, Diane Nobile, responded to questions.

Here’s why the sales price didn’t show up in county records: The title company hired by Barbosa to handle the transaction, Casalina Title, now says it inadvertently failed to record the amount of the tax when it filed the deed.

Nobile said Barbosa bore no responsibility for the records mishap.

“The buyer plays no role whatsoever in the title company’s collection of the documentary tax from the seller, and the buyer plays no role whatsoever in the recording of the deed and the payment of the tax to the Clerk,” Nobile wrote.

Casalina’s omission meant the amount Barbosa paid for the unit remained undisclosed in public records.

“It was our mistake,” said Silene Souza, who runs Casalina.

It was a mistake that took four years to fix, despite questions from the Brazilian press.

A new deed now on file with the county bears a doc stamp tax of $2,010 and a handwritten note: “This deed has been re-recorded to pay documentary stamp tax.”

It is dated March 24, 2016, several weeks after the Miami Herald began inquiring about Barbosa.

 
The original deed from 2012 (left) is missing the amount of the documentary stamp tax, which would normally be recorded on the top right of the document. The new deed, refiled in 2016, includes the amount of the documentary stamp tax, as well as a hand-written note showing the tax has now been paid — both highlighted in yellow by the Herald. Enlarge

Souza said her firm’s records are unclear as to whether Casalina actually paid the tax in 2012. On the advice of county officials, she said Casalina paid the required amount again in 2016 to be safe.

“We are investigating the payment,” she said.

The Florida Administrative Code states that: “In order to protect his rights, it shall be the duty of the owner and holder of the deed, mortgage, or other document, within the recording laws of this State, to see to it that proper amount of stamp taxes are attached thereto prior to recording.”

Renee Watters, a spokeswoman for the Florida Department of Revenue, said that generally means the person receiving the deed — i.e. the buyer — is responsible for the proper conveyance of the tax.

“In 32 years, I’ve never seen this,” said Norma Echarte, a real estate attorney consulted by the Herald. “I’ve filed 4,500 closings.”

Nobile had previously not responded to calls and emails from the Herald. An assistant at her law office had hung up the phone three times when contacted by a reporter.

Souza also did not respond to a request for comment until after the story was published.

Details of Barbosa’s purchase came to light after a massive leak of documents from inside Panamanian law firm Mossack Fonseca. The leak has been dubbed the “Panama Papers.”

MF sets up offshore companies for the world’s wealthiest people. Four people who worked with MF in Brazil have been charged as part of a massive corruption scandal over graft at Brazil’s state oil company. Prosecutors allege that the firm set up offshore shell companies to help politicians launder bribes. Mossack Fonseca has denied any wrongdoing and says its Brazil office is an independent franchise.

This is a very unusual deed.

Joe Hernandez, attorney

Barbosa has never been accused of corruption. The first black judge to sit on Brazil’s Supreme Court after his appointment in 2003, he was mentioned as a possible candidate for president when he retired two years ago.

During his tenure on the court, he gained widespread respect for overseeing a case that saw more than 20 people convicted of corruption, including senior politicians from the governing Workers’ Party, the BBC reported.

Offshore angle

The Mossack Fonseca files show Barbosa set up an offshore company called Assas JB1 to buy Florida real estate in mid-2012, according to leaked emails. The company was registered in the British Virgin Islands, a Caribbean tax haven that doesn’t identify corporate owners in public records.

 
Diane Nobile was Barbosa’s lawyer on the deal.

Days later, Barbosa bought the Icon Brickell unit using a Florida company called Assas JB. Even though the price he paid was undisclosed in public records, Barbosa did not hide his role in the transaction. He is listed in Florida public records as the president of Assas JB.

Foreign nationals who own properties in the United States through offshore companies pay significantly lower estate-tax rates in the United States than if they owned them personally.

In an emailed statement, Barbosa denied any wrongdoing. He said Casalina should have recorded the stamp tax.

Barbosa said he didn’t hide the unit’s sales price, which was recorded on the Multiple Listing Service, a private property database for real-estate agents.

“Any real-estate broker with access to the MLS system can check the amount paid for my property in 2012 and its current market value,” he wrote.

Any real-estate broker with access to the MLS system can check the amount paid for my property.

Joaquim Barbosa

Earlier this year, real-estate website Zillow listed the 790-square-foot condo as available to rent for $2,700 per month.

André Shalders is a reporter at the Brazilian news website UOL.

Correction: A previous version of this story incorrectly stated that buyers must pay documentary stamp taxes on real-estate sales. In fact, the seller customarily provides the funds for the tax. As the buyer, Joaquim Barbosa did not have to provide funds for the tax. The buyer’s closing agent was responsible for conveying the funds to Miami-Dade County and recording the deed of sale correctly. The headline of this article also stated that Barbosa “hid” the price he paid for the unit. That was incorrect. The failure of the closing agent to record the tax kept the sales price from appearing in public records.

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