Panama Papers Leak Supports Federal Crackdown on All-Cash Purchases
The Panama Papers may have just proved the Feds were onto something.
The Panama Papers, leaked files from Panamanian law firm Mossack Fonseca, revealed that millions of dollars in shady, all-cash real estate transactions were connected to individuals who have been linked to bribery, corruption, embezzlement, tax evasion or other misdeeds in their home country, according to the Miami Herald, which received the leak earlier this year.
That’s exactly what the Financial Crimes Enforcement Network (FinCEN) suspected was going down in these hot all-cash markets.
“In Miami, the leak revealed 19 foreign nationals who have created offshore companies and purchased real estate, eight of which are identified as connected to some form of fiscal misdeed,” the Herald reports.
Offshore companies, the kind Mossack Fonseca helps the rich and powerful set up, are legal to own as long as their assets are declared. These types of companies are attractive to the famous and wealthy because they do not force company owners to reveal their names, the way most U.S.-based companies do. That makes it easier for owners to commit illicit acts, like tax fraud or money laundering, the Herald reports. Though these firms like Mossack Fonseca are charged with doing due diligence to prevent illegal acts, they do not always follow through.
The data leak is the largest in U.S. history and will have an indelible impact on real estate going forward.
You can read more about how this temporary initiative, which expires in August, affects REALTORS® and how to spot potential fraud here.
