Hide and Seek
A national study released in 2015 reported that “nearly half the residential purchases of over $5 million were made by shell companies rather than named people.”[ii] Because shell companies could often be formed without disclosing the individuals that ultimately owned or controlled them (i.e., their beneficial owners), and could be used to conduct financial transactions without disclosing their true beneficial owners’ involvement, there was a concern that criminals were using such vehicles to launder money through the purchase of real estate and thereby hide, or at least obscure, the illicit origin of their funds. The report explained that many of these purchases were made in all-cash transactions; thus, no lender was involved and, so, the usual due diligence that accompanies a loan application was avoided.[iii] Continue Reading NY’s LLC Transparency Act and NYC Real Estate – Albany Wants to Know the Secrets that You Keep[i]