The Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has looked under the hood of luxury real estate purchases in Manhattan and Miami, does not like what it sees, and now has expanded its investigation to include six major metropolitan areas.
On July 27, FinCEN announced new Geographic Targeting Orders (GTOs or Orders) temporarily requiring certain U.S. title insurance companies that receive the Orders to identify and report the natural-person beneficial owners of legal entities used to purchase high-end residential properties without external financing in six major metropolitan areas.
Title insurance companies that receive the GTOs also will be required to report details about the natural person that represents the legal entity making the purchase and about the legal entity itself. The new Orders took effect on August 28, 2016, and last until February 23, 2017.
They expand on GTOs FinCEN issued in January of this year for purchases of luxury real estate in Manhattan and Miami-Dade County (the January GTOs), which expired on August 27, 2016. The expanded GTOs deepen FinCEN's efforts to investigate and take action against the use of residential real estate for money laundering, and increase the likelihood that FinCEN eventually will issue new rules on real estate under the Bank Secrecy Act (BSA).
For more information, please see Crowell’s Client Alert.