New FinCEN Division Focuses on Identifying Money Laundering Threats; House Passes Beneficial Ownership Disclosure Bill

October 24, 2019

The Financial Crimes Enforcement Network (FinCEN) recently launched its Global Investigations Division (GID), which will be responsible for implementing targeted investigation strategies rooted in FinCEN’s unique authorities under the Bank Secrecy Act (BSA) to combat illicit finance threats and related crimes, both domestically and internationally.

GID will leverage FinCEN’s BSA authorities, including Section 311 of the USA PATRIOT Act, to investigate and target terrorist finance and money laundering threats, and GID will work more closely with foreign counterparts to coordinate actions against such threats when appropriate.

The foundation of GID is FinCEN’s former Office of Special Measures (OSM), which was previously a part of FinCEN’s Enforcement Division. FinCEN’s strategic use of its Section 311 authority as well as its other information collection authorities, such as the geographic targeting order and foreign financial agency regulation authorities, have greatly expanded in recent years. FinCEN will now have one dedicated division focused on utilizing these authorities to maximum effect, building upon OSM’s prior work.

In May, FinCEN renewed its Geographic Targeting Orders (GTOs) that require U.S. title insurance companies to identify the natural persons behind shell companies used in all-cash purchases of residential real estate.

The purchase amount threshold remains $300,000 for each covered metropolitan area. In addition, covered purchases using virtual currencies must be reported. The new GTOs run through Nov. 11.

According to FinCEN, GTOs continue to provide valuable data on the purchase of residential real estate by persons possibly involved in various illicit enterprises. Reissuing the GTOs will further assist in tracking illicit funds and other criminal or illicit activity, as well as inform FinCEN’s future regulatory efforts in this sector. FinCEN appreciates the continued assistance and cooperation of the title insurance companies and ALTA in protecting the real estate markets from abuse by illicit actors.

The GTOs cover certain counties within the following major U.S. metropolitan areas: 

  • Boston
  • Chicago
  • Dallas-Fort Worth
  • Honolulu
  • Las Vegas
  • Los Angeles
  • Miami
  • New York City
  • San Antonio
  • San Diego
  • San Francisco
  • Seattle

A currency transaction report must be filed with FinCEN if these things occur:

  • Location (deal occurs in one of the areas included in the GTOs)
  • All-cash deal (no financing)
  • Purchase price exceeds $300,000
  • There’s a corporate buyer
  • Purchase price paid via monetary instrument, wire transfer or virtual currencies

The report must include:

  • Information about the identity of the individual primarily responsible for representing the buyer. The title company must obtain a record of the individual’s driver’s license, passport of other similar identification
  • Date of closing of the covered transaction
  • Total amount transferred in the form of a monetary instrument
  • Total purchase price of the covered transaction
  • Address of real property involved

If the purchase involved in the covered transaction is a limited liability company, the underwriter must provide the name, address and taxpayer identification number of all its members. Additionally, covered title companies must retain all records relating to compliance with the order for five years, store the records so they are accessible with a reasonable period of time and make the data available to FinCEN or other law enforcement or regulatory agency, upon request. Under the Bank Secrecy Act, covered businesses must retain all records relating to compliance with the GTOs for at least five years from the last day that the GTOs are effective (including any renewals).

ALTA has developed several tools to help members comply with the order.

Companies with questions can email FinCEN at FRC@FinCEN.gov.

Frequently asked questions regarding these GTOs are available here.

Earlier this year, ALTA joined several other trade groups in a letter to the House Financial Services and Senate Banking leadership urging passage of the Corporate Transparency Act (HR 2513). The bill would update anti-money laundering laws and establish a national strategy to protect real estate from money launders. A requirement for companies to report their beneficial ownership will help law enforcement identify and combat the use of real estate in money laundering. This is integral for efforts to modernize the United States anti-money laundering and countering the financing of terrorism (AML/CFT) regime. On Oct. 22, the U.S. House of Representatives passed HR 2513

States do not require companies to disclose their beneficial owners at the time of creation. This reduces the value of financial intelligence provided by banks, title insurance companies and other financial institutions under their AML and geographic targeting order obligations. A single national repository, operated by law enforcement, would ensure FinCEN obtains valuable information about anonymous shell companies from the sources with the best knowledge.

ALTA believes Congress should include a corporate beneficial ownership registry at a federal or state level to help law enforcement combat the abuse of LLCs to hide beneficial ownership in real estate transactions. The Corporate Transparency Act of 2019 would create this repository at FinCEN to collect and record a corporation or LLC’s beneficial ownership information. The information would be available through appropriate protocols, only to law enforcement, financial intelligence agencies and financial institutions with the consent of their customer. This system would provide law enforcement with a valuable tool for combating money laundering in real estate, without creating new compliance burdens for industry stakeholders.

Specifically, HR 2513 would:

  • require corporations and limited liability companies to disclose their true, beneficial owners to FinCEN at the time the company is formed
  • establish minimum beneficial ownership disclosure requirements by providing beneficial owners’ name, date of birth, current address, and driver’s license or non-expired passport number
  • require companies to file annually with FinCEN a list of its current beneficial owners, as well as a list of any changes in beneficial ownership that occurred during the previous year
  • provide civil and criminal penalties for persons who willfully submit false or fraudulent beneficial ownership information, or who knowingly fail to provide complete or updated beneficial ownership information.


Contact ALTA at 202-296-3671 or communications@alta.org.

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