GTO & FIN-2017-A003

On August 22, 2017, FinCEN issued Geographic Targeting Orders directed at title insurance companies and properties in areas of Texas, Florida, New York, California and Hawaii. While financial institutions have no requirements related to this GTO, FinCEN simultaneously issued FIN-2017-A003, Advisory to Financial Institutions and Real Estate Firms and Professionals.

FinCEN’s press release explains that it published the Advisory “to provide financial institutions and the real estate industry with information on the money laundering risks associated with real estate transactions, including those involving luxury property purchased through shell companies, particularly when conducted without traditional financing. Such transactions are vulnerable to abuse by criminals seeking to launder illegal proceeds and mask their identities. The Advisory provides information on how to detect and report these transactions to FinCEN.”

The Advisory lists some examples that financial institutions should be aware of when identifying and reporting suspicious transactions. These include the use of shell companies, and all-cash purchases. The Advisory should be shared with staff involved with BSA/AML monitoring and reporting.

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