The U.S. Treasury commissioned FinCen (Financial Crimes Enforcement Network) under the Bank Secrecy Act to combat: money laundering, tax evasion, drug trafficking, corrupt officials, financial crimes, and terrorist networks. Money laundering is the process of disguising assets with apparently legal sources. Real estate purchased through shell companies with cash are attractive avenues for criminals to launder illegal proceeds while masking identities.
$10K Run. Businesses receiving $10,000.00+ in cash must report using IRS Form 8300.
$300K GTO, Geographic Targeting Orders (GTOs) issue every 180 days and until November 2018 were confidential. Currently, the GTO requires identities of all “Beneficial Owners” (i.e. those who directly or indirectly own 25% or more equity) of a “Legal Entity” (e.g. Corp., LLC, partnership, other business entity, or trust) used to purchase “Residential Real Estate” be reported within thirty (30) days of closing to FinCen if: (1) the amount is $300,000.00 or more; (2) in Dade, Broward, or Palm Beach Counties; (3) without a bank loan or similar external financing; and (4) purchased in part using currency; cashier’s, certified, traveler’s, personal, or business check; money order; funds transfer; or virtual currency. “Residential real estate” seems broadly construed as it likely includes: “A residential structure that contains 1-4 units, including, if used as a residence, an individual condominium unit, cooperative unit, mobile home or trailer; or residential real estate upon which such a structure is constructed or intended to be constructed.” See, 31 CFR §1010.100(LLL). The report must include a copy of a license or passport.
No Attorney-Client Privilege. Information for completing a GTO report cannot be withheld. US v. Leventhal, 961 F.2d 936 (11th Cir. 1992)
Penalties. Penalties range from $500-$100K plus 5 years in jail.
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