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.
It’s no secret, secret shell companies are dangerous. A report by FACT member Global Witness in early July showed us how these companies are being used to defraud the federal government and put our armed forces at risk. This week, a new report from another FACT member, Fair Share Education Fund, exposed connections to shell companies and the opioid epidemic. The report, “Anonymity Overdose”, explains how ending the use of anonymous shell companies could make it significantly harder to keep drug profits hidden from law enforcement.
Likewise, shell companies are often used to launder illicit money through real estate. A geographic targeting order from the Treasury Department began collecting information on high risk purchases in two of the biggest U.S. housing markets back in March. According to an article in The New York Times, more than a quarter of the all-cash luxury home purchases made using shell companies in Manhattan and Miami were flagged as suspicious. The Treasury Department will now expand the program to other major housing markets across the country.
In a New York Times letter, FACT’s Clark Gascoigne writes that Treasury’s plan falls short of what’s needed to combat the financial system’s role as a money-laundering haven.
To the Editor:
Re “Property Sales Get U.S. Scrutiny” (front page, Jan. 14):
The Treasury Department’s plan to scrutinize the secret companies buying real estate in New York and Miami is a welcome first step toward cleaning up parts of the real estate market, but it falls far short of what’s truly needed to combat the United States financial system’s role as a major money-laundering haven.
