Feds Are Tackling Cash Luxury Deals With Wire Transfer Identification Standards. Vegas Next?

Feds Are Tackling Cash Luxury Deals With Wire Transfer Identification Standards. Vegas Next?


Big money houses could mean big money trouble, if recent reports from The Fed are indicating a trend.

Apparently large swaths of foreign money are making their way from overseas and into the pockets of American luxury home sellers without their knowledge.

During and after the recession, those not as affected by the sweeping financial duress have been buying real estate with cash.

This trend has created a byproduct for criminal misdeeds, attracting organizations to hide money within seemingly legitimate real estate deals.

Because cash (non-financed) deals have become more commonplace now than ever before, bad deals are more difficult to spot.

Money from the Middle East, China, Russia, and host of foreign nations has been behind some of the largest luxury home sales in the country over the last several years.

Federal investigators have found that up to 30% of luxury home sales involving a foreign buyer now use illicit funds. Buyers are laundering money through shell companies that are used to purchase homes.

Big money houses could mean big money trouble

The focus of the larger investigation has been in New York City and Miami-Dade counties.

According to Housingwire.com, investigators found a large percentage of cash deals benefitted individuals identified on “suspicious activity lists.”

Money is being targeted now when it comes from a wire transfer. Previously title companies were not obligated to identify an actual person behind a shell company using a wire transfer to pay for real estate.

New laws being put into place will require identification of wire transfer sources once the amounts in question reach a certain dollar amount.

Housingwire also reported that, “In Manhattan, for example, title insurance companies are required to reveal the individual behind a cash transaction on all sales of $3 million and above, while in other boroughs of New York City (Brooklyn, Queens, Bronx, and Staten Island), the reporting threshold is $1.5 million.

For Honolulu, FinCEN said the reporting threshold is $3 million and above.”

We can’t be altogether surprised by this new action on the part of Washington. Cash deals drove a great deal of our recovery from the recession and managed to keep the lights on in a good deal of real estate offices around the country.

However, we’re not above the realization that people are unscrupulous when it comes to making money. Real estate attracts a lot of it, too.

Then again, our nation does sometimes make a habit of “over-identifying” people who may be up to no-good. In other words, they could be wrong.

For luxury home buyers in Las Vegas, we suggest you plan on being a bit more patient with deal time should funds come from a wire transfer, which is a very common form of money transport.

We don’t know who may be watching.