Feds Crack Down on Laundering for Title Insurance Companies in Miami-Dade Florida

Federal authorities have announced a temporary anti-money laundering crackdown in Miami-Dade County, Florida. Now title insurance agents will be required to identify the true owners of companies that buy homes with cash priced at over one million dollars.

Title insurers of Miami-Dade County real estate that exceeds a million dollars and is paid in cash must report the names of each buyer to the U.S. Department of Treasury. The concern is that multi-million dollar homes are being bought with “dirty money” that’s been laundered from abroad or by other means and used to buy luxury real estate and condos with “shell companies”. The temporary laundering crackdown targets high luxury home sales areas and applies to title insurance companies that close in Miami-Dade County and also in New York City. Some sneaking buyers use a network of domestic and offshore companies to make purchases, and use limited liability companies to obtain tax breaks or other legal benefits such as liability protection.

According to EWM Realty International, “Miami-Dade, buyers paid cash for more than 1,150 homes priced at $1 million or more last year..” This means the money laundering crackdown could affect more than 60 percent of home sales priced at over a million dollars. This investigation and temporary regulation is for the purposes of reducing the amount of off-shore criminals who launder money through real estate in the United States.

South Florida is widely considered a money laundering hotspot, and this is cited as the reason for the geographical targeting. “We are focusing on the risk that criminals from around the world are going to launder their dirty money through residential real estate in the U.S,” Financial Crimes Enforcement Network (FinCEN) director Jennifer Shasky Calvery stated in a phone interview according to Miami Herald. “Our estimation is that 78 percent of homes around the nation are purchased with a mortgage, and our regulations already cover mortgage providers. What we don’t have covered are the all-cash purchases and that’s what we’re trying to address.”

But some say it may violate the privacy of those individuals who seek anonymity when purchasing homes — sometimes athletes, musicians, actors, and other high profile individuals who would rather not reveal their home address to the general public. Although the title insurance companies must assure confidentiality and submit this information to the U. S. Department of Treasury, this does not mean that the identity of the home buyers will ultimately be protected. This is an important reason to be cautious when choosing title insurance companies and buying property the Miami-Dade area for the duration of the temporary money laundering oversight.

“ALTA looks forward to continuing our work with FinCEN as our members implement this order to help prevent money laundering schemes and the illegal purchase of real estate in the United States,” said Michelle Korsmo CEO of the American Land Title Association.

Seeking to buy a home with cash in South Florida?

Choose a title insurance company you can trust. Bay National Title Company uses a technology and a secure title insurance production platform to focus on customer privacy. Get your free title insurance quote by Bay National today.

SOURCES:

Feds Crack Down on Secret Deals in Miami-Dade