FinCEN has announced the expansion of its Geographical Targeting Orders (GTOs) for high-end cash buyers of real estate. The expansion is two-fold. First, FinCEN has expanded the scope of Form 8300 reportable transactions to include “funds transfers” in addition to currency, cashier’s checks, certified checks, traveler’s check, personal checks, business checks, or money orders in any form. Second, FinCEN has added real estate transactions with a total purchase price of $3,000,000 or more in the City and County of Honolulu, Hawaii. This brings the markets covered to seven metropolitan areas.

The renewed GTOs require title insurance companies to identify and report on the natural persons behind shell companies that make covered transactions. The renewed and expanded GTOs will be in effect from September 22, 2017 through March 20, 2018. FinCEN has again praised the “assistance and cooperation” of the title insurance industry in this effort.

On the same day as the GTO expansion, FinCEN published an “Advisory to Financial Institutions and Real Estate Firms and Professionals.” This Advisory is in line with our expectation that FinCEN would further expand their supervisory and enforcement activity in the real estate market, as recommended by the FATF in their 2016 Mutual Evaluation Report and highlighted in an April 12, 2016, speech by former FinCEN Director Jennifer Shasky Calvery.

Continue Reading FinCEN Continues Its Focus on Real Estate Transactions through Advisory and GTOs

 

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Earlier this week, we blogged about how the United States recently declared the Philippines to be a “major money laundering country.”  On the same day of our post, March 7, the European Parliament (EP) issued a Report which describes the United States as a growing haven for tax evasion and money laundering.  Specifically, the Report concludes that the United States “is seen as an emerging leading tax and secrecy haven for rich foreigners. By resisting new global disclosure standards, it provides an array of secrecy and tax-free facilities for non-residents at federal and state levels, notably in Nevada, Delaware, Wyoming, and South Dakota.” Continue Reading European Parliament: The U.S. is a Haven for Tax Cheats and Money Launderers

In January 2016, FinCEN issued two geographic targeting orders (GTOs) aimed at combating money laundering in all-cash real estate transactions in the Borough of Manhattan, New York, and Miami-Dade County, Florida—two areas identified by FinCEN as having “a higher than average percentage of all-cash transactions.” The GTOs, which took effect in March 2016, required certain title insurance companies to identify the natural persons behind entities using cash to purchase high-end real estate—properties with a sales price of more than $1 million in Miami-Dade County and more than $3 million in Manhattan.

Continue Reading 2016 Year in Review: Real Estate Risks and Mortgage Lender Compliance – FinCEN’s Increasing Focus on AML Risks in Real Estate