Does the USA Patriot Act require real estate companies to establish anti-money laundering programs?
Not yet. The USA Patriot Act of 2001 requires that all “financial institutions” must establish anti-money laundering programs. The term “financial institutions” includes “persons involved in real estate closings and settlements.” As of the drafting of this article, persons involved in real estate closings and settlements have, for the most part, been temporarily exempted from the requirement to establish an anti-money laundering program. However, real estate brokers remain subject to existing reporting requirements for transaction in cash or currency exceeding $10,000.00. Question #3: How might someone use a real estate transaction to launder money? Answer: A frequent step in the chain of laundering money is to deposit currency (such as U.S. dollars) into the banking system. The following are two examples by which money launders might attempt to launder money through a real estate broker. Example A. An apparent buyer might use cash as earnest money. The apparent buyer would have the br
