America’s cities are being bought up, bit by bit, by anonymous shell companies using piles of cash. Modest single-family homes, owned for generations by families, now are held by corporate vehicles with names that appear to be little more than jumbles of letters and punctuation – such as SC-TUSCA LLC, CNS1975 LLC – registered to law offices and post office boxes miles away. New glittering towers filled with owned but empty condos look down over our cities, as residents below struggle to find any available housing.
All-cash transactions have come to account for a quarter of all residential real estate purchases, “totaling hundreds of billions of dollars nationwide,” the Financial Crimes Enforcement Network – the financial crimes unit of the federal Treasury Department, also known as FinCEN – noted in a 2017 news release. Thanks to the Bank Secrecy Act, a 1970 anti-money-laundering law, the agency is able to learn who owns many of these properties. In high-cost cities such as New York, San Francisco, Los Angeles and Miami, it’s flagged over 30% of cash purchases as suspicious transactions. But FinCEN also cites this bill to hide this information from the public, leaving the American people increasingly in the dark about who owns their cities.
For journalists, it requires undertaking a tremendous investigative effort to find the real owner of even one property, let alone millions.
“It reminds me of Moldova after the fall of the Soviet Union: oligarchs running wild, stashing their gains in buildings,” James Wright, an attorney and former Treasury Department bank examiner, told me. He now helps foreign governments combat money laundering. “Back then, you’d walk down the street, and people would say, ‘That building is a washing machine.’ Everyone knew it. Today, America is not that different.”