Date Available

1-13-2023

Year of Publication

2023

Document Type

Undergraduate Capstone

College

Undergraduate Education

Department

Public Policy and Administration

First Advisor

Dr. Cory Curl

Abstract

The United States faces threats to economic stability and legal integrity from money laundering practices in the real estate market. Legislative loopholes, complicit enablers, and aging technological systems used by government agencies allow individuals to flow ill-gotten wealth into the United States with little effort. As a result of these factors, local economies suffer job loss, once-inhabited properties lie empty in decay, and trust in government weakens. Illegal wealth is transformed into protected assets in the form of property and can stored to later fund terrorism organizations or influence the American people. Approximately $2.3 billion was laundered through real estate in the last five years alone.1 To address this issue, I identified policy alternatives using criteria of security, technological capability, and lasting effectiveness. I also prioritize solutions that are more likely to produce long-lasting results over temporary fixes. Possible alternatives to stopping money-laundering in real estate include the following: • Expansion of existing anti-money laundering frameworks by requiring third party entities, such as real estate agents and third-party payment services, to follow anti-money laundering laws. This policy is favored by Congress and is included in the 2023 National Security Authorization Act as the ENABLERS Act Amendment. • Establishment of a national and permanent version of the Department of Treasury’s Geographic Targeting Order (GTO) system. These orders require reporting of identification information for all-cash purchases above $300 thousand. Currently GTOs are limited to specific localities and last six months. • Diffusion of New York State’s anti-money laundering laws to all states to fill in legislative gaps and allow states to address nuanced challenges. • Improve federal technology and data storage systems. • Increase awareness of money laundering practices by informing local governments of how bad actors commit crimes and the implications of these efforts.

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