FinCEN’s Continued Effort to Purge Dirty Money from Real Estate Welcomed by Experts

Statement by the FACT Coalition on Treasury’s Decision to Renew Geographic Targeting Orders to Identify Buyers in Luxury Real Estate

WASHINGTON, D.C. – The Financial Crimes Enforcement Network (FinCEN), a branch of the U.S. Treasury Department, announced that it was renewing its temporary orders seeking to uncover illicit activity in the luxury real estate sector. The move was welcomed by experts with the Financial Accountability and Corporate Transparency Coalition (FACT Coalition), a non-partisan alliance of more than 100 state, national, and international organizations promoting policies to combat the harmful impacts of corrupt financial practices.

The Geographic Targeting Orders (GTOs), require U.S. title insurance companies to identify the natural persons, or beneficial owners, behind shell companies used to pay “all cash” for luxury real estate in the Los Angeles, Miami, New York, San Antonio, San Diego, and San Francisco metropolitan areas for a six-month period.  In announcing the renewed GTOs, FinCEN noted that “about 30 percent of the transactions covered by the GTOs involve a beneficial owner or purchaser representative that is also the subject of a previous suspicious activity report. This corroborates FinCEN’s concerns about the use of shell companies to buy luxury real estate in ‘all-cash’ transactions.”

Clark Gascoigne, the deputy director of the FACT Coalition, issued the following statement welcoming the announcement:

“Nearly one third of all high-end purchases through shell companies in our nation’s biggest cities are raising red flags for law enforcement.  The secrecy has turned luxury real estate into safety deposit boxes for the world’s criminals and corrupt — all while artificially inflating property values and pricing future generations of American’s out of the housing market.

“The findings so far continue to underscore the importance of ending the ability to anonymously own shell companies, a practice which drives terrorism, criminal money laundering, and corruption at home and abroad.”

###

Notes to Editors:

Journalist Contact:

Clark Gascoigne
Deputy Director, The FACT Coalition
+1 202 813-0290
cgascoigne@nullthefactcoalition.org