Some seventeen organizations, including Transparency International, worldwide Integrity and world Witness, wrote to the Treasury Department’s (FCEN) Financial Crimes Enforcement Network asking that a temporary exception from the Patriot Act granted to the real estate industry in 2002 be repealed.
The real estate industry lobbied a lot against the Patriot Act, which was signed into law in 2001. The law would have necessary those involved in real estate closings and settlements to behavior due diligence checks on their customers.
The communication cited a series of (NYT) New York Times articles, Towers of Secrecy, which recognized how wealthy worldwide buyers, including those subject to government question along with politicians, had used shell corporations to buy luxury condos in New York City.
Other Justice Department cases and congressional reports have found foreign money tied to corruption used to buy US real estate under the name of shell corporations.
The real estate industry claims to have charitable guidelines for performing background checks on purchasers. The New York Times series, however, quoted several citizens involved in condominium purchases overlooking Central Park at the Time Warner Center, who admitted that they had performed small checks beyond verifying buyers had the money for a purchase.
Present law in a number of states does not need that the owners of limited liability companies buying such properties reveal their identies.
The letter also asked that rules are requiring financial institution to raise their scrutiny of the owners of these limited liability companies and other “legal entity customers” be strengthen. Banks and other similar institution are not obligated to decide their identity.