The Financial Crimes Enforcement Network (FinCEN), a bureau within the U.S. Treasury Department, announced last week that it will again be expanding its Geographic Targeting Orders (GTOs). The new requirements are effective through mid-April 2024.
The GTOs require title companies to identify the people behind shell companies used in all-cash purchases of residential real estate.
FinCEN said it worked with local law enforcement to identify the new areas for GTO coverage. The GTOs have expanded to include the counties of Bristol, Essex, Norfolk and Plymouth in Massachusetts; the counties of Hillsborough, Pasco, Pinellas, Manatee, Sarasota, Charlotte, Lee and Collier in Florida; and Travis county in Texas.
The metropolitan areas of Boston; Chicago; Dallas-Fort Worth; Las Vegas; Los Angeles; Miami; New York City; San Antonio; San Diego; San Francisco; Seattle; Washington, D.C.; Northern Virginia and Maryland (DMV) area; the city and county of Baltimore; Fairfield County, Connecticut; Litchfield County, Connecticut; the Hawaiian Islands of Honolulu, Maui, Hawaii and Kauai; and Houston and Laredo, Texas; and Adams, Arapahoe, Clear Creek, Denver, Douglas, Eagle, Elbert, El Paso, Fremont, Jefferson, Mesa, Pitkin, Pueblo, and Summit counties in Colorado, will retain their GTO designation.
The all-cash purchase threshold will remain $300,000 for all GTOs, with the exception of the city and county of Baltimore, which has a purchase threshold of $50,000.
According to FinCEN, renewing the GTOs will further assist in tracking illicit funds and other criminal activity, as well as inform FinCEN’s future regulatory efforts in this sector, while the bureau works toward its goal of cracking down on individuals who use the U.S. real estate market to launder money.
“Our real estate market is a relatively stable store of value, and it can be opaque, and there are gaps in industry regulation,” Andrea Gacki, FinCEN’s director, said in early October. “Increasing transparency in the real estate sector will assist with curbing the ability of corrupt officials and criminals to launder the proceeds of their illicit activity or ill-gotten gains as well as strengthen U.S. national security and help protect the integrity of the U.S. financial system. For that reason, Treasury is committed to developing a solution to increase the transparency in the domestic real estate market.”
FinCEN previously issued an Advance Notice of Proposed Rulemaking to solicit public comment on a potential rule to address money laundering in the U.S. real estate market in December 2021. According to Gacki, the Treasury plans to issue a Notice of Proposed Rulemaking before the end of the year to address these issues.
FinCEN began issuing GTOs in January 2016 and last announced expansions to its GTOs in April 2023.
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