US Treasury department has been busy since launching its newest anti-money laundering campaign. This time, the press has been on shutting down illegal funds entering the country from foreign investors. These investors, usually purchasing property in excess to 2 million, come from countries such as China and those in the Middle East.
The process is simple. These individuals run money through foreign companies who open accounts in the Caymans with the said funds and then purchase property here in the states. The crackdown started in New York and Miami but has quickly expanded to Los Angeles.
This new campaign puts a new responsibility on more than just the title attorney. Those who need to pay attention are the real estate agents, bankers and the attorneys involved in any of the transactions dealings. They are responsible for knowing where the buyer’s funds originated. This is an often overlooked task, but one in which they will be held more accountable. Potential criminal charges are at stake if found to be a part of the money laundering scheme.
No one knows for sure what the long-term impact of this new Department campaign will be, but in the short-term, the high-end market has softened. There has also been a slowdown in the influx of foreign real estate investors. This might just be the results of Brexit or the fact that countries have been trying to curtail the outflow of money on their end.
Although it might be too early to tell, one thing is for sure, the US Treasury Department is coming down harder than ever on money laundering, and all members of the seller’s team must be part of the solution.