Financial Crimes Enforcement Network proposing regulations for real estate transactions to combat money laundering and violations will fall under the new FINCEN whistleblower program

The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) plans to issue the proposed rules for real estate transactions, including requiring Suspicious Activity Reports similar to those required for banks and other financial institutions. FinCEN administers the US anti-money laundering requirements under the Bank Secrecy Act (BSA), which, among other things, requires financial institutions to maintain AML programs, keep detailed records, and file reports with FinCEN. The proposed regulation would sweep the real estate industry, to one degree or another, into the BSA.

The proposed rule making is likely to issue in two months and then there will be a period for comment.

The rules may include real estate professionals including agents and brokers as well as attorneys and law firms. The new requirements that pass are expected to include both residential and commercial real estate and will cover purchases by trusts corporations and natural persons.

Under the Corporate Transparency Act passed by Congress in 2021, FinCENfinalized new regulations requiring the mandatory reporting of beneficial ownership information by domestic and foreign companies These take effect on January 1, 2024.

Congress also recently expanded cover the new rules under consideration $300 million Financial Integrity Fund that will allow Treasury to reward whistleblowers who come forward with information about potential violations of the BSA or US economic sanctions laws (see our prior alert analyzing the new AML whistleblower program). This expansion includes a new 10% award floor intended to incentivize reporting, putting the program are similar to other well-established government whistleblower programs.

Jeffrey Newman is a whistleblower lawyer who handles FINCEN whistleblower cases as well as SEC whistleblower cases and claims under the False Claims Act (FCA). He can be reached at 617-823-3217 or at Jeff@JeffNewmanLaw.com or www.JeffNewmanLaw.com