Wednesday
October 18, 2017

Feds Expand Effort to Catch Money Laundering in Real Estate

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Feds Expand Effort to Catch Money Laundering in Real Estate

The federal government is expanding its effort to catch people and organizations that use all-cash purchases of high-end real estate to launder money. Under the expansion, Honolulu will join several other areas in which title agents are required to report purchaser information for specific transactions. The expansion also adds certain wire transfers to the list of reportable real estate transactions, specifically to help the government identify illicit Russian activity.

Read more on

...the program's expansion

...the advisory

...the expansion that took place in 2016

The program has been in place for several years and imposes no requirements on real estate professionals in the targeted areas. But the agency within the U.S. Department of Treasury that runs the program, called the Financial Crimes Enforcement Network, or FinCen, acknowledges the cooperation of the National Association of REALTORS® and real estate professionals in helping the government catch money laundering and terrorism financing.

“The real estate industry recognizes the seriousness and importance of protecting the U.S. real estate market from abuse,” FinCen said in a separate advisory released on Tuesday. “For example, the National Association of REALTORS® has issued red flags and voluntary guidelines to assist real estate professionals minimize the risk of real estate becoming a vehicle for money laundering.”

Under the program's expansion, cash real estate transactions of a certain amount and in certain areas must be reported by title agents. Those dollar amounts and areas are:

  • $500k and above – Bexar County, Texas
  • $1m and above – Miami-Dade, Broward, and Palm Beach Counties, Fla.
  • $1.5m and above – New York Boroughs of Brooklyn, Queens, Bronx, and Staten Island
  • $2m and above – San Diego, Los Angeles, San Francisco, San Mateo, and Santa Clara Counties, Calif.
  • $3m and above – New York Borough of Manhattan
  • $3m and above – City and County of Honolulu

“Money laundering is a clear and consistent concern that needs to be addressed, which is why we worked with FinCen to develop voluntary guidelines that help real estate professionals identify and act on red flags they see in the marketplace,” said NAR President William E. Brown. “REALTORS® are proud to do their part, but burdensome and duplicative regulations on real estate agents and brokers won’t fix the problem. The funds transferred in a real estate transaction are handled through financial institutions that are already covered by anti-money laundering regulations. We believe these institutions are uniquely positioned and trained to meet FinCen’s objectives and should continue to be the focus of the Treasury Department’s regulatory initiative.”

—Robert Freedman, REALTOR® Magazine