US regulators concerned about real estate purchases made through “shell companies”

Global Business

US regulators concerned about real estate purchases made through shell companies.00_01_44_00.Still002

Despite renewed signs that the U.S. property market is under pressure, prices in some areas of the country are still red hot.

And that’s worrying the government because most of those real estate purchases have been made by ‘shell companies’.

CCTV America’s Daniel Ryntjes reports.

Follow Daniel Ryntjes on Twitter @danielryntjes

US regulators concerned about real estate purchases made through \"shell companies\"

US regulators concerned about real estate purchases made through \"shell companies\"

Despite renewed signs that the U.S. property market is under pressure, prices in some areas of the country are still red hot. And that's worrying the government because most of those real estate purchases have been made by 'shell companies'. CCTV America's Daniel Ryntjes reports.

The U.S. Treasury has begun an experiment designed to track foreigners purchasing luxury homes, anonymously, in two of the hottest U.S. real estate markets. U.S. regulators are especially concerned about purchases made through “shell companies”.

When a company doesn’t transact business, or own significant assets, it’s called a “shell company.” The U.S. Treasury is concerned that shell companies making cash purchases for high end properties in New York and Miami could be scams to launder money.

To combat fraud, the U.S. Treasury has asked real estate title companies to help identify the buyers for cash purchases over a million dollars in Miami, and for sales over three million dollars in Manhattan. For the next six months, this information will go to the U.S. Treasury’s Financial Crimes Enforcement Network.

Experts at the U.S. Treasury Department will examine whether there are changes in the patterns of cash purchases during the six-month experiment.

If the data shows suspicious activity, officials will prepare a set of new rules designed to make it easier for law enforcement agencies to crack down on illicit real estate transactions.


The Nassimi Group president Richard Nassimi on the U.S. Housing Market 

For more on the U.S. housing market, CCTV America’s Michelle Makori spoke to Richard Nassimi. He is the president of The Nassimi Group, Real Estate Investment & Developments.

The Nassimi Group president Richard Nassimi on US Housing Market Update

The Nassimi Group president Richard Nassimi on US Housing Market Update

For more on the U.S. housing market, CCTV America's Michelle Makori spoke to Richard Nassimi. He is the president of The Nassimi Group, Real Estate Investment & Developments.