– The Financial Crimes Enforcement Network (FinCEN) is expanding its Geographic Targeting Orders (GTOs).
– Title companies are required to identify the people behind shell companies used in all-cash purchases of residential real estate.
– The new GTOs will cover additional counties in Massachusetts, Florida, and Texas.
– Several metropolitan areas across the US will retain their GTO designation.
– The all-cash purchase threshold remains at $300,000, except for Baltimore which has a threshold of $50,000.
– The renewal of GTOs will help track illicit funds and inform future regulatory efforts.
– FinCEN aims to crack down on money laundering in the US real estate market.
– The Treasury plans to issue a Notice of Proposed Rulemaking to address these issues.
The Financial Crimes Enforcement Network (FinCEN), a bureau within the U.S. Treasury Department, announced last week that it will again be expanding its Geographic Targeting Orders (GTOs). The new requirements are effective through mid-April 2024.
FinCEN said it worked with local law enforcement to identify the new areas for GTO coverage. The GTOs have expanded to include the counties of Bristol, Essex, Norfolk and Plymouth in Massachusetts; the counties of Hillsborough, Pasco, Pinellas, Manatee, Sarasota, Charlotte, Lee and Collier in Florida; and Travis county in Texas.
The metropolitan areas of Boston; Chicago; Dallas-Fort Worth; Las Vegas; Los Angeles; Miami; New York City; San Antonio; San Diego; San Francisco; Seattle; Washington, D.C.; Northern Virginia and Maryland (DMV) area; the city and county of Baltimore; Fairfield County, Connecticut; Litchfield County, Connecticut; the Hawaiian Islands of Honolulu, Maui, Hawaii and Kauai; and Houston and Laredo, Texas; and Adams, Arapahoe, Clear Creek, Denver, Douglas, Eagle, Elbert, El Paso, Fremont, Jefferson, Mesa, Pitkin, Pueblo, and Summit counties in Colorado, will retain their GTO designation.
The all-cash purchase threshold will remain $300,000 for all GTOs, with the exception of the city and county of Baltimore, which has a purchase threshold of $50,000.
According to FinCEN, renewing the GTOs will further assist in tracking illicit funds and other criminal activity, as well as inform FinCEN’s future regulatory efforts in this sector, while the bureau works toward its goal of cracking down on individuals who use the U.S. real estate market to launder money.
“Our real estate market is a relatively stable store of value, and it can be opaque, and there are gaps in industry regulation,” Andrea Gacki, FinCEN’s director, said in early October. “Increasing transparency in the real estate sector will assist with curbing the ability of corrupt officials and criminals to launder the proceeds of their illicit activity or ill-gotten gains as well as strengthen U.S. national security and help protect the integrity of the U.S. financial system. For that reason, Treasury is committed to developing a solution to increase the transparency in the domestic real estate market.”
FinCEN previously issued an Advance Notice of Proposed Rulemaking to solicit public comment on a potential rule to address money laundering in the U.S. real estate market in December 2021. According to Gacki, the Treasury plans to issue a Notice of Proposed Rulemaking before the end of the year to address these issues.
FinCEN began issuing GTOs in January 2016 and last announced expansions to its GTOs in April 2023.
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In recent news, the Financial Crimes Enforcement Network (FinCEN), which is a bureau within the U.S. Treasury Department, has announced the expansion of its Geographic Targeting Orders (GTOs). These orders require title companies to identify the individuals behind shell companies used in all-cash purchases of residential real estate.
The new requirements will be effective until mid-April 2024. FinCEN has worked with local law enforcement to identify the new areas for GTO coverage, including counties in Massachusetts, Florida, and Texas, as well as various metropolitan areas across the United States.
The purpose of these GTOs is to track illicit funds and other criminal activities, as well as inform FinCEN’s future regulatory efforts in the real estate sector. By cracking down on individuals who use the U.S. real estate market to launder money, FinCEN aims to protect the integrity of the U.S. financial system and strengthen national security.
Andrea Gacki, FinCEN’s director, highlighted the importance of increasing transparency in the real estate sector. The real estate market is relatively stable and can be opaque, with gaps in industry regulation. By addressing these issues and increasing transparency, the Treasury aims to prevent corrupt officials and criminals from laundering their ill-gotten gains.
In December 2021, FinCEN issued an Advance Notice of Proposed Rulemaking to gather public input on potential rules to combat money laundering in the real estate market. Gacki stated that the Treasury plans to issue a Notice of Proposed Rulemaking before the end of this year to address these concerns further.
It’s worth noting that FinCEN has been issuing GTOs since January 2016 and has expanded them multiple times, with the most recent expansion announced in April 2023.
So, that’s a brief overview of