FinCEN GTOs to affect billions in sales

by 28 Jan 2016
With the release of the newest geographic targeting orders (GTOs) by the Financial Crimes Enforcement Network (FinCEN) last January 13, the Department of Treasury is stepping up its campaign against money laundering in the housing property sector.
The GTOs will temporarily require companies providing title insurance to identify the individuals who are using shell corporations to make all-cash purchases of residential real estate worth at least $1 million. By cracking down on these unscrupulous elements, the move is projected to affect sales volume worth billions of dollars.
The orders, which would take effect on March 1 and last until August 27 this year, came on the heels of numerous reports citing anomalies in the purchase of high-end properties in NYC and Miami.
“Last year it was revealed through a series of articles in the New York Times that a number of purchases of multi-million dollar luxury apartments in Manhattan were made by individuals with connections to foreign corruption and other criminal activity,” observers Lisa Bebchick and Janice Mac Avoy noted in their collaborative piece published by Lexology.
“Nearly half of the most expensive residential properties in the US (including in New York and Miami) are purchased anonymously through shell companies,” the authors added.
FinCEN Director Jennifer Shasky Calvery stated that the GTOs are designed to bridge the paper trail gap posed by non-bank-backed purchases, as such transactions might serve as a cover for those who want to surreptitiously invest in luxury properties using illegal funds.


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