Feds Expand Money Laundering Probe to All Five Boroughs – and Beyond

The federal government is expanding its probe into money laundering through high-end real estate.

Since March, the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, has been requiring people who pay all cash for expensive properties in Manhattan or Miami to give their true identity, even if they are using a shell company to complete the purchase.

Now, buyers in the outer boroughs — and several other American cities — will have to do the same. That means title insurers must inform the government of the names of the “beneficial owners,” or real purchasers, behind any deal.

The probe has already turned up some evidence of deals that don’t look kosher.

"In one case we saw a beneficial owner that engaged in 16 million dollars in suspicious cash withdrawal activity,” said a Treasury official, in a news briefing for reporters. “A beneficial owner possibly involved in dealing with counterfeit checks, and a beneficial owner connected to a network of shell companies that received about 7 million dollars in suspicious wire transfers from businesses in South America."

According to Core Logic, 44 percent of homes purchased in New York State in April were paid in cash.