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FINANCE
OF LUXUU.SR. WYILLRTREAACKLSEECRSETTBAUYTERES
Cby Michael Wiener, E.A. buyers increasingly sought safe havens for their money in the
ondominiums at the Time Warner Center were United States.
found to have a number of hidden owners for over
a decade who had been the subjects of government The investigation found that real estate professionals, especially
investigations. Concerned about illicit money flowing into in the luxury market, often do not know much about buyers. Until
luxury real estate, the Treasury Department stated that it now, none of them have been legally required to. The use of shell
would begin identifying and tracking secret buyers of high- companies in real estate is legal, and L.L.C.s have a range of uses
end properties. The initiative will start in two of the nation’s unrelated to secrecy. But a Treasury official said her agency had
major destinations for global wealth: Manhattan and seen instances in which multimillion-dollar homes were being
used as safe deposit boxes for ill-gotten gains, in transactions made
Miami-Dade County. more opaque by the use of anonymous shell companies. “We are
It will shine a light on the concerned about the possibility that dirty money is being put into
luxury real estate,” said Ms. Calvery, the director of the Financial
darkest corner of the real estate Crimes Enforcement Network, the Treasury unit running the
market: all-cash purchases made initiative. “We think some of the bigger risk is around the least
by shell companies that often transparent transactions.”
shield purchasers’ identities.
It is the first time the federal The department will focus on sales that are both paid for all
government has required real in cash and conducted using shell companies. The government
estate companies to disclose is requiring title insurance companies, which are involved in
names behind cash transactions, virtually all sales, to discover the identities of buyers and submit
and it is likely to send shudders the information to the Treasury. The government will put the
through the real estate industry, information into a database for law enforcement. The Treasury’s
which has benefited enormously in recent years from a program will affect billions of dollars in real-estate transactions.
building boom increasingly dependent on wealthy, secretive
buyers. The initiative is part of a broader federal effort If you should have a topic that you would like me to
to increase the focus on money laundering in real estate. discuss or if you should have a question, please feel free to
Treasury and federal law enforcement officials said they
were putting greater resources into investigating luxury call 239.403.4410 or e-mail me at
real estate sales that involve shell companies like limited mike@cctaxandaccounting.com.
liability companies, often known as L.L.C.s; partnerships;
and other entities. Future investigations, they said, will An enrolled agent, licensed by the US Department
focus increasingly on professionals who assist in money of the Treasury to represent taxpayers before the IRS
laundering, including real estate agents, lawyers, bankers for audits, collections and appeals. To attain the enrolled
and L.L.C. formation agents. agent designation, candidates must demonstrate expertise in
Officials said the new government efforts were inspired taxation, fulfill continuing education credits and adhere to a
in part by a series last year in The New York Times that
examined the rising use of shell companies as foreign stringent code of ethics.
74 Life in Naples | March 2016
