This week, we have the opportunity to lead a discussion with real estate industry professionals about AML and CFT trends at the Real Estate Services Providers Council, Inc. (RESPRO®) Annual Conference in Las Vegas. We have written several times in this blog about the real estate industry, including the 2017 extension of the GTOs for title insurance companies, other recent FinCEN activities, and the FATF’s conclusions regarding real estate in their 2016 Mutual Evaluation Report.

We are very pleased that Anne Marie Minogue of Navigant will be joining us on the panel. The real estate industry operates differently in different states and efforts to enhance AML and CFT supervision and enforcement will need to reflect this complexity. RESPRO members include a broad range of industry participants that will be affected by further actions by FinCEN so we are looking forward to the discussion.Beautiful Swimming Pool at an Estate Home

 

"Group of pedestrians walking on a cobbled street, sharing the frame with their bag-carrying shadows"

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

FinCEN announced today that it is renewing the existing Geographical Targeting Orders (GTOs) issued in July 2016 that require all title insurance companies to identify and report on the natural persons behind shell companies that make cash-only purchases of high-end real estate in six major metropolitan markets. The renewed GTOs will be in effect from February 24, 2017 through August 22, 2017.

The initial real estate GTOs were issued to certain title insurance companies (including their subsidiaries and agents) in January 2016 for purchases in the Borough of Manhattan and Miami-Dade County. The July 2016 orders being renewed today expanded the scope of the GTOs to cover all title insurance companies and to include numerous counties in six major metropolitan areas.

The renewal of the GTOs was anticipated. In today’s new release, FinCEN noted that it “has found that 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.”

As highlighted in our 2016 Year in Review, FinCEN has increased its focus on AML risks in real estate. We expect FinCEN to further expand their supervisory and enforcement activity in the real estate market, as recommended by the FATF in their 2016 Mutual Evaluation Report.

The Executive Vice President of Venezuela, Tareck Zaidan El Aissami Maddah (El Aissami), was designated on Monday by the U.S. Department of Treasury as a Specially Designated Narcotics Trafficker under the Foreign Narcotics Kingpin Designation Act (Kingpin Act). According to the Office of Foreign Assets Control (OFAC), El Aissami directly facilitated significant shipments of drugs from Venezuela into the United States and Mexico, and helped and protected other drug dealers operating within Venezuela.  OFAC also has alleged that El Aissami’s “primary frontman,” Samark Jose Lopez Bello, oversaw the finances of these operations and launders drug proceeds through “an international network of petroleum, distribution, engineering, telecommunications, and asset holding companies.”

After providing some additional details regarding these designations, we will discuss the Kingpin Act itself, a powerful and unique enforcement tool. Continue Reading Kingpin Act Wielded Against Vice President of Venezuela

2016 was a busy year for developments in Anti-Money Laundering (AML), the Bank Secrecy Act (BSA), the criminal money laundering statutes, forfeiture, and related issues. In part one of our year-in-review, we discuss six key topics:

  • The Panama Papers and its spotlight on the United States as a potential money laundering haven

You can read more about these topics areas in the blogs that follow. Click here to read the full article 2016 Year in Review: Money Laundering (Part One).

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

The December 2016 FATF Mutual Evaluation Report on the United States’ Measures to Combat Money Laundering and Terrorist Financing repeatedly highlighted the need for U.S. regulators and the real estate industry to do more to address money laundering and terrorist financing risks.

The FATF report identified “high-end real estate” transactions as an area needing priority action. In the report, the FATF assessors recommend that FinCEN take further action after analyzing the outcomes from FinCEN’s 2016 GTOs for high-end cash transactions in several U.S. real markets.

Continue Reading 2016 Year in Review: FATF Report Highlights Real Estate Risks and Mortgage Lender Compliance Shortcomings