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Rules on Real Estate Money Laundering Could Get Tougher

New York City

Money Laundering
Aug. 6, 2018

In an effort to prevent people from using real estate to launder ill-gotten money, the U.S. Treasury Department in 2016 began requiring title insurance companies to reveal the owners of shell companies who pay cash for real estate purchases of $1 million or more in Manhattan, south Florida, and Los Angeles. Last year the requirement was extended to all boroughs of New York City, Los Angeles County, the San Francisco bay area, San Diego County and Bexar County in Texas, which includes San Antonio.

Now, Republican Florida Senator Marco Rubio wants to tighten the screws even tighter, the Real Deal reports. Rubio is proposing an amendment to an unrelated spending bill that would require shell companies across the country to disclose their owners for real estate purchases of $300,000 or more in cash. The bill would give the U.S. Treasury 180 days to submit a study to Congress that would provide more details about the data that has been collected by the Treasury’s Financial Crimes Enforcement Network (FinCEN). It would also ask FinCEN if a registry of company owners would help authorities combat money laundering, tax evasion, election fraud, and other illegal activities. 

Rubio’s bill is a response to some spectacular recent money laundering. Federal prosecutors have just charged eight people in an alleged scheme to launder more than $1 billion embezzled from the Venezuelan state-owned oil company. Prosecutors allege a Porsche Design Tower unit in Sunny Isles, Florida, was tied to the scheme.

The American Land Title Association released a statement last year praising the rule. “Our members have collected this information for more than a year and the good news is those efforts appear to be beneficial to the government’s work identifying money laundering schemes and the illegal purchase of real estate,” said Michelle Korsmo, ALTA’s chief executive officer.

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