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The Daily

Seeking to Curb Money Laundering, FinCEN Announces Crackdown on Luxury Real Estate

Chris Gaetano
Published Date:
Jan 14, 2016
'The Modern 343 West 16th St' by Beyond My Ken - Own work. Licensed under GFDL via Wikimedia CommonsConcerned that less-than-lawful entities such as organized crime syndicates are parking their assets in luxury condos and other high-end real estate, the Financial Crimes Enforcement Network (FinCEN) has announced an initiative to crack down on real estate purchases with no identifier as to who, exactly, is behind them.Specifically, FinCEN issued Geographic Targeting Orders that will, from the beginning of March to the end of August, require certain U.S. title insurance companies to identify the natural persons behind companies used to pay for high-end residential real estate without the use of external financing, orders that apply to units bought in New York City and Miami-Dade County, Florida. Such purchases are typically done through limited liability companies or other structures where such information is not required to purchase real estate. FinCEN believes that these entities, and the real estate they purchase, are enabling money laundering by criminal entities. 

The New York Times said the order will affect billions in real estate transactions, which had been booming due to the very same secretive purchases that the FinCEN order is meant to examine. Under the initiative, people who make real estate purchases of more than $3 million in the case of Manhattan and $1 million in the case of Miami-Dade County will need to be reported by the title insurance company, said the Times. 

While the measure is temporary, the Times said that if FinCEN uncovers enough suspicious sales, the program might be expanded and made permanent.