By Greg Williams
Treasury's Financial Crimes Enforcement Network (FinCEN) renewed requirements for title insurance companies to identify the real owners behind shell companies in six major metropolitan areas. These “Geographic Targeting Orders” started in 2016 and preliminary reporting found that 30% of buyers were involved in suspicious activity. Watchdog groups like Jubilee USA are concerned that real estate purchases in places like New York and Miami are ways for corrupt officials to launder money.
“It's good news that Treasury is renewing these reporting requirements. Luxury real estate transactions can be used to launder money stolen from developing economies,” explained Eric LeCompte, Executive Director of the religious development organization Jubilee USA. "Not only can unchecked real estate purchases support corruption and tax evasion, they also drive up real estate values that leave little room for affordable housing.”
FinCEN's order applies to New York City, Los Angeles, San Diego and the Miami, San Francisco and San Antonio metropolitan areas. According to a recent report from the research organization Global Financial Integrity, developing countries lose more to corruption and tax evasion than they receive in loans, aid and other sources combined. Last year's "Panama Papers" leak revealed how shell companies can facilitate corruption and tax evasion.
“Improving global transparency is essential to solving global poverty,” stated LeCompte who serves on United Nations expert groups that focus on the financial system.
Read more about FinCEN renewal of the “Geographic Targeting Orders”
Read more about the Panama Papers and anonymous shell companies