Money Laundering in the High-End Super-Rich Luxury Home Market
In Miami and New York City, federal anti-money laundering agencies have launched a major effort to end buying high end housing with laundered money. These are apartments in multi-million-dollar condominiums, waterfront high end homes in Palm Beach, Boca Raton, Los Angeles and D.C. The Task Force is now operating full steam! Take note that there are Federal Grand Juries actively investigating money laundering in New York and Florida. Government money laundering federal prosecutors have begun a campaign to take down lawyers and real estate agents who facilitate these money laundering transactions. How? First there now is a push to emphasize the “know your client” rule. The American Bar Association has published an attorney’s best practices pamphlet http://www.americanbar.org/content/dam/aba/uncategorized/GAO/2014oct_abaguide_preventingmoneylaundering.authcheckdam.pdf which is a must-read for lawyers in New York, Miami, and now Boca Raton Florida who have clients from outside the U.S. who purchase expensive homes with cash. “Know Your Client” means… the true beneficial party must be known by his or her government issued identifier. Identifiers are tax identification number(s). For U.S. citizens? — a social security number. For non-U.S. nationals? –Their citizen identification is now required: passports are acceptable citizen identifiers. A Beneficial Owner, or true equity-owner- person, is a living human being. Best practices are to not accept transactions where the buyer is a business or a partnership or an entity: that is no longer good enough to shield you from a major problem. You should (read that must) know the name of a living, breathing person. It’s best to actually have personal contact with the beneficial owner(s). If you don’t , and the government looks at the transaction and begins a money laundering investigation you (Real Estate broker or salesman, or Mr. or Ms. Attorney), will have a visitor from the Treasury Department, or the FBI and then it’s off into a major kettle of woes. First thing is hiring your friendly federal criminal defense attorney. Or responding to a Grand Jury subpoena. Or a meet with the FBI investigator, or the U.S. Attorney’s case agent. It gets worse. Think about the Bar, or your practice partners, or your clients who read about you being indicted in federal court on a wire fraud, or money laundering charge. https://www.southfloridacriminaldefenselawyerblog.com/
Is it worth the aggravation to explain to your golfing buddies in Boca Raton about your miseries? How about your friends in Miami who thought you were at the top of your game and now you’re playing hardball with the U.S. Attorney’s Office in New York. So, what to do? Here’s a few things to do:
- Remember that 78% of all real estate transactions in Miami and Boca Raton require compliance with the Bank Secrecy Act. https://www.fdic.gov/regulations/safety/manual/section8-1.pdf
If you’re not familiar with it then call your malpractice underwriter and get the protocol for a closing.
- Learn and learn well, that starting today you have to (must) monitor, identify, know and name all parties to the transaction. Find and identify (with numerical identifiers) the true beneficial persons of interest: the buyer who walks and talks and will live in the five-million-dollar waterfront townhouse in Palm Beach.
- Go online and read the first page of the U.S. Treasury’s Department of Financial Crimes Enforcement Network (FinCEN). https://www.fincen.gov/
- Or call your federal criminal defense lawyer in Fort Lauderdale, or Miami, or New York. Don’t be bashful it’s a call that can save you money and maybe your license!
- Again, go online and read about Suspicious Activity Reports (SAR’s) what they are and how attorneys and real estate agents and brokers can be tagged for not making a SAR report.
- Refamiliarize yourself with the definition of Willful Blindness.
- Go online to the website of the Association of Certified Anti-Money Laundering Specialists (ACAMS) or go online to find the local Chapter of ACAMS and call one of the names on the registry of members.
- Ask a banker for a contact in their internal Anti Money Laundering Compliance department.