A new bill may go after LLCs in real estate.
Congresswoman Carolyn Maloney said she’s hoping to introduce a bipartisan bill that would force every LLC to reveal its owners, the New York Post reported. LLCs can be used to purchase real estate anonymously, which has allowed celebrities to stay under the radar but also facilitated criminal activity.
Since LLCs, which provide tax incentives and a shield from liability, were legalized in New York State in 1994, the entities have become the most common way to buy real estate in New York City.
“Law enforcement has been asking for years for new laws so that they can follow the money and not be stymied in their investigation by anonymous shell companies,’’ Maloney said. “The U.S. should not be a safe haven for money-laundering and criminals’ funds.”
A poster child for the problem has been 650 Fifth Avenue, the report said. The 35-story high-rise was built by the last Shah of Iran before he was overthrown, and later transferred to entities that are tied to the terror-supporting country.
Iran has allegedly taken in millions of dollars from rental fees from tenants like Marc Rich, a commodities trader and tax fugitive who sold Iranian oil to Israel despite sanctions. Federal authorities, however, weren’t able to tie the country’s government to the property after years of investigation.
Russian oligarchs have also snagged property through LLCs. Oleg Deripaska bought a $40 million Upper East Side mansion, for example. Several of his companies faced U.S. sanctions last year, though the Trump administration recently said it had a deal to lift the measures.
By 2017, 30 percent of cash purchases of high-end real estate by LLCs in New York, Miami, Los Angeles, San Francisco, San Diego and San Antonio involved suspicious buyers, according to the U.S. Treasury Department’s Financial Crimes Enforcement Network, or FinCEN.
The organization has issued geographic targeting orders as a means to mitigate such concerns. Most recently, the network expanded GTOs to include all-cash real estate deals above $300,000 in 12 metro areas including New York City, Miami, Los Angeles, Chicago and San Francisco. [NYP] — Meenal Vamburkar