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University of Miami Business Law Review

Gary McPherson

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Comment

Abstract

Miami is experiencing a money laundering controversy the likes of which have not been seen since the “Cocaine Cowboys” era of 1980’s Miami. Condominiums and other mega developments are popping up at an unprecedented pace, immediately after the housing market crash that caused the Great Recession. Adding to this questionable boom in development is the fact that the vast majority of Miami’s population cannot afford to live in places like these. So, the question presented is who is fueling this explosion in development? Criminals, that’s who. Federal agents believe criminals are buying coveted Miami real estate through shell companies to launder their ill–gotten money.

In response to this crisis, the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a Geographic Targeting Order (GTO) that requires Miami title insurers to report information about the identities of those hiding behind shell companies to buy real estate in cash purchases. Through the order, FinCEN aims to gain information about and deter potential money launderers. The GTO places Miami squarely in the cross–hairs of FinCEN’s anti–money laundering regime. However, there is a problem: the GTO will not actually prevent money laundering. There are fundamental issues with the GTO: it is underinclusive and riddled with loopholes and ambiguities. These issues are easily resolved by a more inclusive, detailed drafting of the GTO that eliminates the many loopholes and clarifies the latent ambiguities inherent in it. However, as currently written, the GTO’s many issues prevent it from effectively fighting money laundering in Miami, but they also shelter Miami’s real estate market from the potential negative effects that many feared the GTO would cause.

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