Executive Summary
While real estate title and escrow companies are not required to establish an AML program and file SARs, they are subject to certain other FinCEN recordkeeping and reporting requirements. Businesses providing escrow and other settlement services in the purchase of real estate are required to report currency transactions greater than $10,000 using the FinCEN/Internal Revenue Service Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business (“Form 8300”).If an escrow or title company employee suspects that a person with whom they are conducting business is attempting to cause the Form 8300 not to be filed, or to file a false or incomplete form, the employee may voluntarily report a suspicious transaction by marking box 1b on Form 8300. Real estate title and escrow businesses also have been the subject of SARs filed by other types of financial institutions with SAR reporting requirements.
As with other components of the financial sector, criminals look for opportunities to commit fraud and other financial crimes, and launder money through title and escrow companies. In response to concerns about the potential role of title and escrow agents in some high-profile transactions involving the proceeds of foreign corruption, FinCEN analyzed certain BSA filings relative to title and escrow companies. This assessment covers businesses and individuals that are involved in the settlement of transactions involving real estate, prepare property abstracts, research and insure property titles, or handle escrow funds, by looking at common terms to identify relevant businesses. It provides numerical data synopses and typologies of filings of suspicious activity related to real estate title and escrow-related businesses and individuals by examining certain BSA filings from 2003 through 2011 made by individuals and entities involved in these businesses or reported by other financial institutions on these entities. It summarizes the nature of the suspicious activity reported and provides information on typologies that illustrate the various ways illicit actors may have exploited real estate title and escrow companies to commit financial crimes, such as fraud, and launder the proceeds of foreign corruption and criminal activities.
Link to the detailed report: click here