Can your home be seized through civil asset forfeiture? Consider the ongoing and expanded effort to identify cash purchases of residential real estate to catch criminals.
An imminent Supreme Court decision on Timbs v. Indiana could have implications on your home and property. Although the case is about excessive fines brought on by a state, it highlights the issue of due process in civil asset forfeiture. To bring you up to speed, the case is about the seizure of an Indiana resident’s $42,000 Land Rover by the state of Indiana, although his drug related fine was only $10,000. The Land Rover was allegedly purchased from cash obtained from an insurance policy, instead of illicit monies.
Civil asset forfeit is a when the government (federal, state, or local) confiscates your property when you are suspected of a crime. You don’t necessarily have to be charged or convicted of the crime. Civil libertarians criticize governments and law enforcement agencies for abusing civil asset forfeiture for profit. Maryland is one of the many states that have recently passed legislation reforming civil asset forfeiture. However, Congress has yet to pass a civil asset forfeiture reform bill.
In their effort to fight money laundering and mortgage fraud, the Financial Crimes Enforcement Network (fincen.gov) recently stated that their Geographic Targeting Orders (GTOs) program has “provided valuable data on the purchase of residential real estate by persons implicated, or allegedly involved, in various illicit enterprises including foreign corruption, organized crime, fraud, narcotics trafficking, and other violations. Reissuing the GTOs will further assist in tracking illicit funds and other criminal or illicit activity…”
Previous GTO’s required title companies to report all-cash transactions that met specific criteria. The purpose was to track and identify individuals who mask their identity behind shell companies. FinCen found that the GTO program provided “valuable data on the purchase of residential real estate by persons implicated, or allegedly involved, in various illicit enterprises including foreign corruption, organized crime, fraud, narcotics trafficking, and other violations.” So much so, that A November 15th press release revealed expanded reporting criteria and metro coverage. FinCen believes that the “reissued GTO” will assist in “tracking illicit activity.”
FinCen’s targets were previously limited to suspected foreign entities purchasing luxury properties. However, FinCen is becoming increasingly aggressive to include more transactions and individuals in their reporting criteria.
Two years ago, I reported on the expansion of the FinCen’s interest in fighting mortgage fraud and money laundering through residential real estate transactions. A January 13th 2016 FinCen release stated their intention in expanding their anti-money-laundering efforts to cash purchases of luxury real estate. The GTO was supposed to help learn about the risk posed by “corrupt foreign officials, or transnational criminals” who were suspected of “secretly” buying of luxury real estate in certain metropolitan areas.
Previous GTO’s focused on the cash purchases of luxury homes (over $1 million) in limited metro areas. However, in their November 15th revision, FinCen lowers the reporting threshold of cash purchases to $300,000. Additionally, the metro areas of interest have been expanded to include certain counties Boston, Chicago, Dallas-Fort Worth, Honolulu, Las Vegas. Los Angeles, Miami, New York City, San Antonio, San Diego, San Francisco, and Seattle. Additionally, title companies in those metro areas are also to report “natural persons” behind shell companies used in all-cash purchases of residential real estate, as well as virtual currency purchases.
By Dan Krell. Copyright © 2018.
Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.