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Thu Jan 14, 2016, 12:27 PM

U.S. targets laundering in all-cash home sales

The United States is hunting down international criminals who launder money through real estate deals, with the Treasury Department ordering title insurance companies to report the identities of people paying cash for high-end properties in Miami and Manhattan. The Financial Crimes Enforcement Network, an arm of the US Treasury, said yesterday it is concerned that individuals buy residential real estate in cash through shell companies to hide their assets and veil their identities.

Title insurers will have to disclose buyer identities in deals of at least US$1 million in Miami and at least US$3 million for Manhattan, the Miami Herald reported. Research conducted by the Homeland Security officials suggests that the majority of real estate purchases of at least US$1 million in Florida’s Miami-Dade and Broward counties are made through shell companies, said John Tobon, deputy special agent in charge at Homeland Security Investigations in Miami.

The temporary orders begin on March 1 and last 180 days, and a surge in deals to be completed March is expected. Buyers may turn to other major metropolitan markets such as Los Angeles, as well, he added. In November 2015, the most recent month for which data is available, 17% of the 82,595 all-cash purchases of single family homes and condos went to buyers with an “LLC” in the name, indicating they were purchased by companies; altogether, a third of home purchases in the United States since 2011 were all-cash.

Meanwhile, there were about $104 billion in transactions involving foreign investors in the US real estate market between April 2014 and March 2015. More than half the buyers in those deals were from China, Canada, India, Mexico, and the United Kingdom, and the majority of transactions involving overseas buyers were in cash, said Deborah Friedman, who works in the FBI’s money laundering intelligence unit, in September. Those purchases were concentrated in Florida, Texas, Arizona and California, she said.

The Patriot Act of 2001 required the Treasury Dept. to either issue rules on anti-money laundering controls and reporting of suspicious activity by real estate professionals or grant an exemption. The exemption has been in place now for more than a decade.

At: http://buenosairesherald.com/article/206694/us-targets-laundering-in-allcash-home-sales-

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