This congresswoman is working on a bill to target LLCs in real estate

She hopes to remove owner anonymity

TRD New York /
Jan.January 23, 2019 08:30 AM

Congresswoman Carolyn Maloney with 650 Fifth Avenue and a silhouette (Credit: Getty Images, Google Maps, and Pixabay)

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


Related Articles

arrow_forward_ios
Gov. Andrew Cuomo has given the go-ahead to reopen schools for in-person learning statewide (Getty; iStock)

School’s back on. Will the NYC resi market follow suit?

School’s back on. Will the NYC resi market follow suit?
New York’s real estate market is becoming two different stories: Manhattan, where deals are falling — and the suburbs, where demand is spiking. (iStock, Unsplash)

Manhattan is cold, the suburbs and Brooklyn are hot: Here’s what the resi market looked like in July

Manhattan is cold, the suburbs and Brooklyn are hot: Here’s what the resi market looked like in July
Home sale price declines are expected for July, after a recent bump, according to a CoreLogic report. (iStock)

Home sale prices got a bump, but a drop is coming: Report

Home sale prices got a bump, but a drop is coming: Report
(Images courtesy of Victor Group)

The Getty condo chops prices up to 53%

The Getty condo chops prices up to 53%
28 Liberty Street (Wikipedia)

Manhattan’s office leasing sees busiest month since January

Manhattan’s office leasing sees busiest month since January
442 Union Street and 257 Berry Street (Google Maps)

Brooklyn’s luxury market reaches new pandemic high

Brooklyn’s luxury market reaches new pandemic high
Marwan Kheireddine (inset), Jennifer Lawrence and 400 East 67th Street (Getty, Compass, BDL Accelerate)

Jennifer Lawrence’s Upper East Side PH sold at 37% loss

Jennifer Lawrence’s Upper East Side PH sold at 37% loss
Senate Minority Leader Chuck Schumer and Senate Majority Leader Mitch McConnell (Schumer by Tasos Katopodis/Getty Images; McConnell by Ting Shen/Xinhua via Getty)

Schumer v. McConnell on SALT: Who’s gonna give?

Schumer v. McConnell on SALT: Who’s gonna give?
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...