FinCEN Expands Its AML Target Real Estate Deals and Information Collection

The Financial Crimes Enforcement Network (FinCEN) announced on August 22, 2017, that it is expanding its earlier Geographic Targeting Orders (GTO) that require U.S. title insurance companies to identify the natural persons who are behind shell companies used to buy high-end residential real estate. The GTOs now will include the City and County of Honolulu, Hawaii.

In addition, the GTOs will capture a broader range of transactions and include transactions that involve wire transfers. This addition comes after the recent enactment of the Countering America’s Adversaries through Sanctions Act.

In making its announcement and issuing its Advisory, FinCEN notes that the data it has collected since its first GTO was put into place shows that about “30 percent of reported transactions involve a beneficial owner or purchaser representative that was also the subject of a previous suspicious activity report.” FinCEN’s activities have been bolstered by the fact that law enforcement agencies have reported that the information obtained has advanced their criminal investigations. The target markets for the GTOs have included all boroughs of New York City, two counties in the Miami metropolitan area, five counties in California, and the Texas county in which San Antonio is located.

Press Release: FinCEN Targets Shell Companies Purchasing Luxury Properties in Seven Major Metropolitan Areas 
FinCEN Advisory: Advisory to Financial Institutions and Real Estate Firms and Professionals

Pillsbury Alert: FinCEN Expands Scope of “All Cash” GTOs Anti-Money Laundering Efforts Continue to Target the Real Estate Sector; FinCEN Targets “All Cash” Real Estate Deals in Manhattan and Miami

Photo: Edmund Garman, Waikiki, Honolulu – Creative Commons