<p>There have been a number of threads and posts about residential real estate transactions lately (or maybe there was only one and I’ve read it 500 times lol), I thought it might be useful to know that late yesterday FinCEN released a report titled “Suspected Money Laundering in the Residential Real Estate Industry”. To read the report, please visit [Financial</a> Crimes Enforcement Network (FinCEN)](<a href=“http://www.fincen.gov%5DFinancial”>http://www.fincen.gov), and you will see the appropriate links on the right hand section. </p>
<p>As background, FinCEN (Financial Crimes Enforcement Network) is an office within the Treasury Department specifically tasked with safeguarding the financial system from money laundering, terrorist financing, and collateral crime. IMO they have done a fantastic job, especially since the latest new director came on board. </p>
<p>Real estate as a target for fraud is a growing issue: thanks to the Patriot Act, FATF, BSA, and other regs, it has become more and more difficult for fraudsters to transact through the legitimate banking system, but this doesn’t stop criminals: they simply find some other way. The cycle of money laundering is that cash goes into the collateral (could be real estate, precious gems, expensive autos, etc.) very dirty; when the collateral is sold, the cash comes out clean.</p>
<p>The report is worth reading and some of the cases it mentions can also apply to other collateral.</p>