The Financial Crimes Enforcement Network today further expanded the scope of its geographic targeting orders temporarily requiring certain U.S. title insurance companies in specified areas to identify the individuals behind companies used to conduct high-end, all-cash real estate transactions. Reports made under the existing orders showed that more than 30 percent of these all-cash purchases involved a purchaser who was the subject of a previous suspicious activity report, FinCEN said.
Previously covering all boroughs of New York City; Miami-Dade, Broward and Palm Beach counties in Florida; Los Angeles, San Diego, San Francisco, San Mateo and Santa Clara counties in California; and Bexar County, Texas, where San Antonio is located, the orders will now cover Honolulu County, Hawaii, as well. They are in effect from Sept. 22, 2017, until March 20, 2018.
In addition to requiring title insurers to record and report the beneficial ownership information of entities purchasing real estate in these jurisdictions without external financing, the orders now specifically include “funds transfer” as a source of purchase funds that would trigger a report.
FinCEN has identified all-cash real estate transactions as an area particularly vulnerable to money laundering, as individuals may use shell companies to purchase high-value properties. The agency issued an advisory to financial institutions and real estate professionals providing background on the orders and the use of shell companies in masking illicit funds through property purchases.