Since rumors of illicit money laundering have been flowing through the real estate market, the U.S. Treasury recently explained it will start identifying and targeting secret purchasers. Beginning with Manhattan and Miami-Dade County, all-cash transactions will be investigated.
This will be the first time the government has forced real estate companies to disclose names. It is only one part of the plan to end money laundering through real estate. The efforts were set off by a series of articles published in “The New York Times,” which discovered the increase in shell companies used as safe havens for foreign buyers.
Jennifer Calvery, director of the Financial Crimes Enforcement Network, has expressed her concerns about the amount of dirty money currently circulating the luxury real estate market. Major efforts to battle the problem include mandating insurance companies to uncover buyer identities and submitting these names to the government, which will be placed in a database for further examination.
Although the reporting is only being done on a temporary basis, it will be expanded and will become permanent if a high number of unscrupulous deals are uncovered. In Manhattan, transactions over $3 million must be reported. The amount is only $1 million in Miami-Dade County.
During “The New York Times” investigation, it was revealed a large number of prominent condos were owned by individuals who were subjects of government inquiries. Besides the actual launderers, law enforcement is also targeting the facilitators of the money laundering, including bankers, lawyers, and accountants. All of these efforts are sure to send waves throughout the real estate market.