Gov. Targets Money Laundering in Luxury Real Estate

By Guillermo Duralde,
Domestic News Assistant Editor

The issue regarding limitations to an individual’s right to privacy have been under enormous amounts of scrutiny, especially with the rise of technology and access to sensitive personal information so easily found on the internet within a few key strokes.

Privacy is a matter that affects all individuals on a daily basis, even if it goes unrealized. Posting on social media and talking and texting on smart phones, among a litany of other examples, are making it such that the keeping private information private is increasingly difficult.

The US Treasury Department announced last week that they were beginning a policy, on a temporary 180 day basis, that is designed to weed out the practice of criminals or individuals who use dirty money to acquire high-end real estate as a means to clean their money. Since the dawn of the criminal, there have been various methods used to clean large amounts of dirty money, ranging from the simple to the incredibly complex.

Many legitimate high net-worth individuals use the practice of purchasing high end real estate through LLCS, completely incash, and then using shell companies to protect their privacy. According to World Finance, “the new scheme will force real estate firms to disclose the identities of those behind cash purchases” on properties in New York valued at more than three million dollars and more than one million dollars in Miami. Money laundering has become increasingly common in the United States, especially with the rise in drug trafficking and the availability of high end real estate.

Since the dawn of crime and the criminal enterprise, there have been a myriad of ways in which criminals wash their dirty money and turn it into clean and untraceable money. One of the most common methods for criminals now to clean their dirty money has been purchasing high end real estate with the dirty money and then selling the property, sometime in the future, in exchange for clean money. This practice is extremely common in large markets such as New York, Los Angeles, and Miami for drug kingpins, disgraced politicians, and other individuals of ill repute.

For years, according to The Economic Times, in reference to a New York Times series from last year, “the investigation found that real estate professionals, especially in the luxury market, often do not know much about buyers. Until now, none of them have been legally required to.” For many in the real estate business, especially the high-end portion, they did not care where the money was coming from, let alone from whom because it “has benefited enormously in recent years from a building boom increasingly dependent on wealthy, secretive buyers.”

The new policy instituted by the Treasury Department requires that real estate companies disclose the names of those individuals purchasing luxury properties completely in cash.
Many in the real estate community believe that this policy will send shock waves throughout the real estate market, according to CNBC, because “when you add uncertainty to a process, it tends to slow it down.”

The goal behind the Treasury Department’s new policy is to weed out individuals such as Alvaro Lopez Tardon, a Spanish drug dealer, who according to W orld Finance purchased “14 Miami condos with $26.4m of alleged cocaine profits” and the former President of Nicaragua, a man accused of stealing from his own people, from doing so again in the United States.

A version of this article appeared in the Tuesday, January 26th print edition.

Contact Guillermo at


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