The U.S. Department of the Treasury has had enough. It has assigned the Financial Crimes Enforcement Network, also known as FinCEN, to look more closely at the Miami-Dade County area along with the Borough of Manhattan, NY, to uncover real estate money laundering schemes that may be taking place in transactions involving Coral Gables luxury homes and other high-end property buys.
This law enforcement action has the FinCEN requesting specific information from particular title companies issuing titles for Coral Gables luxury homes and others in the area to provide detailed data and report requested facts and figures to the agency at its discretion.
High-end real estate transactions, including Coral Gables luxury homes, may need to provide FinCEN with specific data collection and reporting requirements. These requests will be enforced through two new Global Targeting Orders that are legally binding and, if not followed, can lead to criminal penalties.
What are Global Targeting Orders
Global Targeting Orders or GTOs are enforced under the Bank Secrecy Act (BSA), which give power to the director of FinCEN to issue orders imposing additional recordkeeping and reporting requirements from certain title companies.
The GTOs can be enforced on domestic financial institutions or non-financial trades or businesses. As the name implies, the GTOs focus on a specific geographic area and can request information on transactions that involve U.S. currency or other types of monetary instruments. The BSA provides the FinCEN with the authority to request GTOs for up to 180 days. In this particular case involving Coral Gables luxury homes and other high-end real estate transactions in the Miami-Dade County area, the GTOs are set to be in effect beginning March 1, 2016 through August 27, 2016.
Who and What Type of Transactions Are Affected?
GTOs will be sent to specific title insurance companies that may be assisting with buying and selling of Coral Gables luxury homes and other similar properties. Only those receiving this type of notification, including any subsidiaries or agents of the title insurance company, will need to follow the outlined request.
Identified title insurance companies and its subsidiaries and agents will be required to turn in information that involve the following:
- A legal buyer. This means someone (a person) or something (partnership, limited liability company, corporation or other similar business entity) that is buying property in the Miami-Dade County area or Borough of Manhattan, N.Y. This includes entities that were formed under a foreign jurisdiction, the laws of a state or the United States.
- Property being purchased is residential.
- The price of the property is more than $1 million if purchased in the Miami Dade County area or more than $3 million if purchased in the Borough of Manhattan.
- No loan or external financing from a financial institution is required.
- If the transaction involves payment in the form of currency, money order, cashier’s check, traveler’s check, or certified check.
What Can Happen if a GTO is Not Completed
Violators of the GTO may be subject to criminal and civil penalties. For specific details, you can read the Fact Sheet from the American Land Title Association.
