Did you know that the US Treasury Department’s Financial Crime Enforcement Network (FinCEN) has been investigating all-cash real estate deals in targeted cities for some three years now?
Initially, FinCEN looked at unknown buyers who were using shell companies to buy high-end properties (+$500,000) in New York City, Miami, Los Angeles, San Diego, San Francisco and Texas’s Bexar County including San Antonio. Why? The federal government was concerned about “ …suspicious or illicit money” being used as a way to conceal or launder money. Apparently, the Feds’ efforts have paid off enough as to continue expanding these efforts.Going forward, FinCEN is requiring title companies in Boston, Chicago, Dallas-Fort Worth, Honolulu, Los Angeles, Miami, New York City, Seattle, Las Vegas, San Diego, San Antonio and San Francisco to report all-cash transactions in the amount of $300,000 or more. It is also requiring title companies to report real estate purchases above this $300,000 threshold that are made using crypto-currencies.
The rational for these efforts are as follows:
“Previous (geographic targeting orders) provided
valuable data on purchases of residential real
estate by persons implicated, or allegedly in-
volved, in various illicit enterprises including
foreign corruption, organized crime, fraud, narco-
tics trafficking and other violations. Revising
the GTOs will further assist in tracking illicit
funds and other criminal or illicit activity, as
well as inform FinCEN’s future regulatory
efforts in this sector.”
FinCEN does not indicate whether or not it is required to inform individuals who are transacting real estate deals with shell companies. Assuming that this information is not required, this post is an informative heads-up to agents in these now 12 targeted cities who may represent people doing business with either crypto-currencies and/or shell companies.