Existing Geographic Targeting Orders have been renewed, effective through Aug. 23, 2017, for six major metropolitan areas identified by the U.S. Department of the Treasury as prone to possible money laundering by shell companies paying all-cash for luxury real estate.
The Financial Crimes Enforcement Network’s (FinCEN) action requires U.S. title companies to identify the natural persons behind those shell companies in the following major geographic areas:
- All boroughs of New York City, New York
- Miami-Dade, Broward and Palm Beach counties, Florida
- Los Angeles County, California
- San Francisco, San Mateo and Santa Clara counties, California
- San Diego County, California
- Bexar County (San Antonio area), Texas
“These GTOs are producing valuable data that is assisting law enforcement and is serving to inform our future efforts to address money laundering in the real estate sector,” FinCEN Acting Director Jamal El-Hindi said. “The subject of money laundering and illicit financial flows involving the real estate sector is something that we have been taking on, in steps, to ensure that we continue to build an efficient and effective regulatory approach.”
About 30 percent of the transactions covered by the GTOs involve a beneficial owner or purchaser representative that is also the subject of a previous suspicious activity report, according to FinCEN.
The focus on title insurance companies does not imply they are suspected of wrongdoing, the agency said, but simply that they provide an effective monitoring tool since most real estate transactions involve title insurance.
“FinCEN appreciates the continued assistance and cooperation of the title insurance companies and the American Land Title Association in protecting the real estate markets from abuse by illicit actors,” according to a news release from Treasury.
For answers to frequently asked questions about these GTOs, click here.
The monetary thresholds for each geographic area may be viewed by clicking this link.
To see a sample GTO, which is effective for 180 days, as of Feb. 24, 2017, click here.