Claude Muller Real Estate Megalomania: What Happens When the Sharks Are Above the Law

While reading an article on Alexis Muller Pellerin, described as a rising star of the real estate world, I have also discovered his grandfather, Claude Muller, retired property developer in Cannes. I managed to find the book published by Hélène Constanty in 2015 “Razzia sur la Riviera” (Raid on the French Riviera). When you mention the real estate industry on the Côte d’Azur, you immediately think of collusion with local elected officials, bribes, corruption, yachts and stories of suitcases filled with bills. In this book, the description of this universe is worse than you could ever imagine!

There are several definitions for offenders. Offenders who flout the law in need of money, assets, etc., and offenders who flout the law for more and more profit. The wealthiest sitting on their fortune, searching by all means – lawful or not, to accumulate more and more. Petty crimes which directly result from megalomaniac desires of men in their wild silk three-piece suits. The golden organized crime of various businesses, sharing a common practice: tax evasion.

The case of Claude Muller ideally depicts the profiles of the ravenous meat-heating shark. Indeed, tax evasion and property fraud punctuated the career path of this real estate star.

Commissions paid on accounts in Switzerland and Lichtenstein

As a real estate developer and broker, Claude Muller prospered in the 1980s. He got along with local public figures and maintained influential relations in Cannes and Antibes. He was known for his imposing bearing, had the gift of the gab and maintained an exceptional network. Three useful qualities that enabled him to attract wealthy customers, especially from the Gulf. Claude Muller was a repatriated “pied-noir” from Algeria, fluent in Arabic.

While conducting businesses with his wealthy clients, he took the opportunity to initiate a tax evasion scheme. This scheme was tried and tested but efficient. Claude Muller implemented an invoicing system to the benefit of the Arabic princes he worked for – the main part of his customers, while collecting a real fortune for his services. His fraud system was the following: he worked with a Geneva attorney Baudouin Dunand, who founded customized real estate companies (SCI) in order to receive money of the financial transactions of the sold villas. These SCI were always established in countries known for applying confidentiality policies in terms of client identity, such as Lichtenstein and Switzerland. The wealthy investors transferred the funds on the SCI founded by attorney Baudouin Dunand, and once all providers and suppliers, who had worked on the construction site, were paid, Dunand transferred the remaining sums on a bank account held by Claude Muller. Then, the sums received by the real estate developer were enormous. Thanks to the SCI which served as a support structure for transferring money of each real estate transaction, Muller accumulated a real fortune. As for the Geneva attorney who assisted Claude Muller in these tax frauds, he is known to be the administrator of a number of offshore companies – essential parts of a broader tax evasion scheme.

Incarcerated in Grasse for fraud

In addition to the tax fraud, Claude Muller was also linked to other swindles such as town planning, privileges and real estate frauds, while being clever enough not to face the legal consequences. In 1982, he bought the sumptuous property called “Le Grand Jardin” on the island of Sainte-Marguerite. Spread on two hectares and composed of two 17th century mansions, it is the only private property of the island. With a very skillful trick, the property was exempt of the French fortune tax; Claude Miller claimed it had been bought for professional purpose. Indeed, indicted by the civil, criminal and administrative courts, he explained he bought the property for his business of real estate broker, with the intention to resell it. And during the 25 years he owned the property, the mansion was indeed for sale, but at price three times higher than its actual value. A clear message for potential buyers: “Move along, there is nothing to see here.”

Claude Muller was also involved in several fraud and swindles in Cannes and Antibes. The real estate developer did not always manage to flee from justice.

Indeed, on December 8, 1992, he was indicted for alleged forgery and fraud. Once again with his partner in crime Baudouin Dunand, he swindled the head of the government of Qatar of 13 million francs on the construction price of his property. Claude Muller was incarcerated at the Grasse jail, where he stayed three months before being freed with judicial review.

My research led to the undesirable Russian businessman Arcadi Gaydamak, involved in arms trafficking of the Angolagate and Clearstream cases, and subpoenaed in fraud cases linked to Claude Muller.

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4 Options To Purchase Investment Real Estate Purchases

When, someone, decides, he’s ready, and prepared, to invest in real estate, for investment purposes, he must do his homework, and know/ understand, his options, in terms of investing in these types of properties. While investment real estate, often, is a superb investment, this is only the case, when the property is the correct one, and a well – considered, evaluation is done, and one is properly prepared, to consider the best way, to fund these purchases. The process must begin with, doing a thorough, financial analysis, and feasibility study, to consider, revenue flow, costs/ expenditures, and, whether, the purchase, makes sense. Once, this is carefully done and performed, one must consider, how he will fund the transaction. With that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, 4 possible options, to fund commercial real estate purchases.

1. Conventional loans: Begin your analysis, and review, by considering conventional loans, and whether, this way, makes sense, for you, and your needs/ requirements! A conventional/ traditional loan, generally offered, by a bank, or other lending institution, requires significant collateral, and other assurances, to qualify. It also requires a down – payment, often, approximately, 25%. One’s overall, credit rating, must be, at a level, which will generate the finest offers, etc.

2. Get funds from contacts/ investors, etc: Sometimes, the best course, is to seek partners, or shareholders, in order to get the necessary funding. Doing so, often, reduces your personal risk, but, also limits the upper – end, possibility! In addition, it requires, putting together, a legally, drawn – up, agreement, etc. This is often, attractive, when one doesn’t have the personal funds, or can’t put together, the necessary, down – payment.

3. Combination: Sometimes, the best course of action, for someone, may be using some sort of combination, of the two methods, listed above. Perhaps, using a conventional approach, for much of the funding, and attracting investors, to, either minimize risk, or create the ability to have the necessary degree of reserves, associated with managing these types of properties, might makes sense, to some.

4. Partnership; limited partnership; corporation; Real Estate Investment Trust (REIT): If you don’t want to, or are unable to do this, on your own, a partnership, limited partnership, or corporation, might make the most sense. However, if you aren’t prepared for quality analysis of choosing the right property, or would rather, be more diversified, a Real Estate Investment Property (or, REIT), might make sense, because, if you select, the right, General Partner, and experienced, expert advisers, you will be able to invest in real estate, in a similar manner, to investing in a Mutual Fund.

If you want to invest in investment real estate, do so, wisely, and be prepared, for making the wisest, possible decisions! Understanding, financing options, etc, positions you, to make the best decision, for you!

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