FinCEN Renews and Expands Geographic Targeting Orders for Residential Real Estate Deals, Includes Wire Transfers

FinCEN Renews and Expands Geographic Targeting Orders for Residential Real Estate Deals, Includes Wire Transfers


By: Michael T. Gershberg, Lawrence Gerschwer, Janice Mac Avoy, Justin A. Schenck

On August 22, 2017, the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) announced the 6-month renewal of the existing Geographic Targeting Orders (GTOs), originally issued in July 2016 and reissued in February 2017, relating to money laundering concerns in connection with all-cash purchases of high-end residential real estate properties.  The GTOs require U.S. title insurance companies to identify and report the ultimate beneficial owner behind legal entities making certain all-cash real estate purchases.  The renewed GTOs cover the same geographic areas at the same monetary thresholds for certain real estate purchases in New York, Florida, California, and Texas.  FinCEN also issued a new GTO for real estate purchases over $3,000,000 in Honolulu, Hawaii and expanded the scope of the GTOs to include purchases made with wire transfers, rather than just those made with currency or checks.  The inclusion of wire purchases closes a major gap in the existing GTOs and is likely to cover significantly more all-cash luxury residential real estate transactions.

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