On May 8, 2020, the Financial Crimes Enforcement Network (FinCEN) reissued their Geographic Targeting Orders (GTOs) to include the same 12 metropolitan areas issued in November 2019 (read here). GTOs are authorized under the Bank Secrecy Act to detect money laundering and other illicit activity through the purchases of real estate. The purchase amount threshold remains at $300,000 and will remain in effect until November 5, 2020.
The GTO requires U.S. title insurance companies, their subsidiaries, and agents, to determine the beneficial owners (natural person) behind certain entities used in “covered” residential real estate transactions, including cashier’s checks, certified checks, traveler’s checks, personal checks, business checks, money orders, funds transfers, or virtual currency. Previous GTOs have provided valuable information to law enforcement by following the funds used for various criminal activities, including foreign corruption, organized crime, and drug trafficking.
Real estate purchases have been a successful vehicle for laundering money for many years, particularly through shell companies, which this GTO aims to negate.
Under the continuing GTO, the purchase price of residential real estate property remains at $300,000. The threshold amount was lowered in 2018, as it was determined that money laundering is widespread in accessible real estate, not only on higher-end properties.