Real Estate News 24

Real Estate News 24

America Proposes Corruption Crackdown With Real Estate Focus

Beth McCandry

The White House made an astronomical claim on Monday: acts of corruption cost 2% and 5% of the world’s gross domestic product, respectively. According to the World Bank, that would be around $ 1.7 to $ 4.2 trillion.

How this figure came about was not elaborated, but the US government said it plans to do all it can to fight the problem. Their first goal: pure bar real estate deals, which will be examined more closely for their connections to criminals and corruption according to the new proposed rules.

Realizing about the really big problem of real estate

It sounds like Narcos or Cocaine Cowboys stuff because it is. According to the US Treasury Department, over $ 2.3 billion was laundered through American real estate between 2015 and 2020. Experts say something has helped traffickers, drug cartels, and seedy politicians.

While letterbox companies are perfectly legal, these illegal actors often use them as a vehicle to conduct transactions and hide money in assets spread across legitimate industries – and they can also be used for tax evasion. To solve the problem, the Biden administration wants to pave the way for one of America’s most important corruption agencies to access data on further real estate activities:

  • The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) is proposing to expand a program to track US $ 300,000 cash sales of residential real estate in 12 major US metropolitan areas across the country.
  • FinCEN is also considering requiring mutual funds such as hedge funds and private equity vehicles to participate in anti-money laundering programs.

Helping hand: The US is also planning the extraordinary step of helping overseas strengthen its own corruption watchdogs. This could help prevent cases like that of former Ukrainian Prime Minister Pavlo Lazrenko, who stole hundreds of millions during his reign and was caught with $ 22.8 million in illegal US assets, including a nine-bedroom California villa and a Picasso lithograph (at least he had good taste).