The US Treasury Department has started cracking down on buyers of high-end real estate in hopes of stopping money laundering. As a result, the federal government will now require real estate companies to disclose the names behind all-cash purchases made by shell companies.
Money Laundering and Real Estate
Over the past years the real estate industry has seen a boom – mainly fueled by wealthy, secretive buyers that have previously been able to be shielded by shell companies. The new initiative, being unveiled in Manhattan and Miami-Dade County, will now require companies to disclose the names behind the all-cash transactions. This initiative is part of a federal effort to increase awareness of the money laundering that seems to run rampant through the real estate industry under the guise of shell companies like limited liability companies (L.L.C.s), partnerships, and other entities. In addition to the shell companies, the investigation will also focus on those professionals that handle real estate business, including real estate agents, lawyers, bankers, and L.L.C. formation agents.