The Feds Crackdown on Suspicious Real Estate Activity

In an effort to crackdown on the use of luxury real estate purchases to conceal money laundering and other corrupt activities, the federal government is moving to require escrow companies to determine the true owners of LLC’s and shell companies that are making all-cash real estate purchases above a certain price in select locations, according to an article in CNBC.

After the true owners have been identified, the Treasury Department determines whether said owners are flagged for suspicious activities such as money laundering, corruption or other financial crimes.

The new rules cover properties purchased for more than $3 million in Manhattan, properties over $1 million in the southern Florida locations and $2 million in the California locations and Hawaii. The move also covers wire transfers that were previously used to circumvent the government’s efforts.

The Treasury estimates that around a third of luxury real estate deals involve suspicious activity.