By Francis Monofort
Senators Chris Van Hollen (D-Md.) and Sheldon Whitehouse (D-R.I.) have called on the Government Accountability Office to study whether vulnerabilities in anti-money laundering laws applicable to the real estate sector present increased risk of criminal activity.
The senators’ announcement noted that there has been widespread reporting on potential criminal activity in the real estate market, including between the Trump Organization and Russia.
In a letter to Comptroller General Gene Dodaro, the senators expressed concerns that transnational criminal organizations and other corrupt actors may be exploiting the gaps in US regulatory and law enforcement processes related to the laundering of money through the US real estate market.
“The luxury real estate market attracts money launderers because all-cash deals through shell corporations allow criminals to mask their ownership information. Cash-only real estate transactions are subject to fewer reporting requirements than financial institutions have to comply with. Addressing this problem is even more urgent when you consider the widespread reporting on the potential of criminal activity in the real estate market with regards to the Trump Organization and Russia,” according to the senators’ press release.
Van Hollen and Whitehouse requested the GAO to assess the results of the real estate Geographic Targeting Orders issued by FinCEN. GTOs temporarily require certain US title insurance companies to identify the persons behind shell companies used to purchase high-end residential real estate, among other requirements.