Beginning today, the Financial Crimes Enforcement Network (FinCEN) will officially extend its Geographic Targeting Orders (GTOs) that mandate identifying natural persons behind shell companies, The Title Report has learned.
A representative of FinCEN told The Title Report, “The GTOs issued to date have provided FinCEN and law enforcement important information about money laundering vulnerabilities in the real estate sector. GTOs are a valuable tool and FinCEN is extending the current GTOs to continue studying this vulnerability.”
FinCEN has not disclosed which geographic areas will be included in the GTOs or whether the mandates continued following their expiration in March. Thus, starting today, closing agents could be participating in transactions subject to GTOs without knowing before closing time.
The last GTO order period went from Sept. 22, 2017, to March 20, 2018.
Originally issued in 2016, the GTOs require U.S. title insurance companies to report beneficial ownership information on legal entities, including shell companies, used to purchase certain luxury residential real estate in Manhattan and Miami. FinCEN targeted luxury residential property purchased by shell companies without a bank loan and made at least in part using a cashier’s check or similar instrument.
The GTOs were reissued in July 2016 and February 2017. FinCEN also extended the GTO coverage to all boroughs of New York City, two additional counties in the Miami metropolitan area, five counties in California (including Los Angeles, San Francisco, and San Diego), and the Texas county that includes San Antonio.
The GTOs were revised in August 2017 to include transactions involving wire transfers, and to include the city and county of Honolulu, Hawaii.
The Title Report has filed a Freedom of Information Act request with FinCEN to make details of the GTO public. We will follow the current situation and update readers as soon as more details become available.