Bank Secrecy Group eyes Real Estate Investors


Back in April we talked about FinCEN's latest and greatest project. This was their press release:


"FinCEN takes aim at real estate secrecy in Manhattan and Miami. ‘Geographic Targeting Orders’ requires identification for high end cash buyers."


This was to be effective March 1, 2016 and expire August 27, 2016. At the time, I had a sneaking suspicion it would never expire. Alas – I was correct. Not only was it renewed, the targeted areas have expanded.


Catching criminals?


The original program was created to temporarily require certain US title insurance companies to identify the person(s) behind companies used to pay all cash for high end residential real estate. Any beneficial owner (each individual who owns 25% or more of the equity interests) would be reported to FinCEN .


FinCEN said they were concerned that all cash purchases may be conducted by people trying to hide their assets and identity. Their objective was to catch all the 'bad guys'. Their newest press release stated:


"Federal and state law enforcement agencies have informed FinCEN that information generated by the GTOs has provided greater insight on potential assets held by persons of investigative interest and, in some cases, has helped generate leads and identify previously unknown subjects."


Wait. "Provided greater insight" and "identify previously unknown subjects"? What about all the criminals? How many did they catch? Where's the big bust?


Criteria Changes

Originally, only "certain" title insurance companies had to partake in the program. Now, the new GTOs cover all title insurance companies.


When the program was introduced, the scope of "covered transactions" were cashier's checks (bank check, official check, or treasurer's check) or certified checks. That scope has grown to include personal checks and business checks. We still can't find any information about wire transfers, and are assuming those are not included at this point.


Expanded Areas

In the beginning there were only 2 counties that were included. The targeted areas were Manhattan (with sales of more than $3 million), and Miami/Dade County (with sales of more than $1 million).


That has grown to 14 counties; each with their own specific reporting threshold amount. They are:

  • The Borough of Manhattan $3,000,000
  • The Borough of Brooklyn $1,500,000
  • The Borough of Queens $1,500,000
  • The Borough of Bronx $1,500,000
  • The Borough of Staten Island $1,500,000
  • Miami-Dade County $1,000,000
  • Broward County $1,000,000
  • Palm Beach County $1,000,000
  • San Diego County $2,000,000
  • Los Angeles County $2,000,000
  • San Francisco County $2,000,000
  • San Mateo County $2,000,000
  • Santa Clara County $2,000,000
  • Bexar County $500,000


The new program is set to "expire" on February 23, 2017. If I was a betting woman (let's say the type that would get home from Vegas with enough cash in her pocket to buy a fancy new couch), I'd say this program will not be going anywhere. It may roll out slowly, but I wouldn't be surprised if this eventually goes nationwide.


**update: FinCEN expanded dates again: ending on August 22, 2017 **


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