Webb County Notice: Navigating the Renewed Geographic Targeting Orders (GTOs) for Real Estate Transactions

October 25, 2024

What title companies and real estate agents need to know

In October 2024, FinCEN (Financial Crimes Enforcement Network) renewed Geographic Targeting Orders (GTOs) targeting specific U.S. counties and regions with heightened regulatory scrutiny in real estate transactions. As part of FinCEN’s ongoing efforts to combat money laundering and illicit financial activity, these GTOs require businesses involved in certain residential real estate transactions to collect and report critical information about the individuals and entities purchasing properties. The terms of this Order for purchases in all counties covered by this Order are effective beginning October 16, 2024, and ending on April 14, 2025.

The most recent renewal continues to cover several jurisdictions across the country, including counties in Texas (Webb, (Laredo), Bexar (San Antonio), Dallas, Harris (Houston), Montgomery, Tarrant (Fort Worth), and Travis (Austin); California, Florida, New York, and other high-activity real estate markets. The aim is to curtail the misuse of U.S. real estate as a vehicle for hiding illicit funds, particularly through shell companies and anonymous entities.

As the author of The 3 Bucket Method for Asset Protection, I emphasize how this regulatory requirement intersects with broader concerns about safeguarding assets, maintaining privacy, and ensuring that clients navigate real estate transactions legally and efficiently.

Geographic Scope and Jurisdictional Impact

The renewed GTOs apply to specific counties within several states, including:

Texas: Bexar (San Antonio), Dallas, Harris (Houston), Montgomery, Tarrant (Fort Worth), Travis (Austin), and Webb (Laredo) counties.
California: Los Angeles, San Diego, San Francisco, San Mateo, and Santa Clara counties.
Florida: Miami-Dade, Broward, Palm Beach, and other populous counties.
New York City: All five boroughs—Bronx, Brooklyn, Manhattan, Queens, and Staten Island.
Plus, counties in Colorado, Hawaii, Illinois, Maryland, and beyond.

These regions have been targeted for a reason: they are known for high real estate transaction volumes and attract international investments, making them vulnerable to money laundering activities.

If you’re involved in real estate transactions within these areas, this should be on your radar. Whether you're a real estate investor, developer, title insurance company, or a business facilitating transactions, failure to comply with GTO requirements can lead to significant legal and financial consequences.

What Does a "Covered Transaction" Mean?

A "Covered Transaction" under the GTOs refers to any residential real estate transaction involving the purchase of property using certain forms of payment that FinCEN considers to be at higher risk for illicit activity. Specifically, this includes purchases made without external financing or those that utilize methods such as:

Cash
Cashier’s checks
Certified checks
Money orders
Virtual currency (e.g., Bitcoin)
Funds transfers

FinCEN also defines "residential real property" as property designed primarily for the occupancy of one to four families, including individual condominium or cooperative units. Therefore, whether you are buying a single-family home or a condo unit, these transactions fall within the GTO’s scope.

The Burden of Compliance on "Covered Businesses"

Businesses involved in these transactions—referred to as "Covered Businesses"—must follow specific steps to ensure compliance. Covered Businesses include title insurance companies and other businesses directly or indirectly involved in facilitating the transaction. The burden of compliance can be substantial, as these businesses must:

Identify Beneficial Owners: For any Legal Entity purchasing property, a Covered Business must identify and report information about the "Beneficial Owners" of the entity. This means determining who directly or indirectly owns 25% or more of the purchasing entity’s equity interests.
Verify Ownership: Businesses are required to verify the identity of these Beneficial Owners through valid identification documents, such as a driver’s license or passport. Businesses can rely on third-party information provided by agents or representatives of the purchaser, but they remain responsible for the accuracy of the reports they submit to FinCEN.
Report to FinCEN: If the transaction meets the criteria outlined in the GTOs, the business must electronically file a Currency Transaction Report with FinCEN, detailing the information about the Legal Entity and its Beneficial Owners.
Retain Records: Businesses are required to retain all records related to compliance with the GTOs for at least five years after the GTO expires. This means even after the GTOs are renewed or lifted, businesses must keep these records for potential future review.

Intersection with the Corporate Transparency Act

It's crucial to note that the GTO reporting requirements are separate from the obligations imposed by the Corporate Transparency Act (CTA). The CTA, effective starting January 1, 2024, requires most corporations, LLCs, and other similar entities to report their beneficial ownership information to FinCEN. However, compliance with the CTA does not exempt businesses from reporting similar information under the GTOs.

For example, if a Legal Entity purchaser has already reported its Beneficial Owners under the CTA, the Covered Business involved in the real estate transaction must still report the same information under the GTO requirements. Essentially, there is no "double counting" exemption—both sets of rules must be followed.

How Does This Affect Asset Protection?

For those of you familiar with my book, The 3 Bucket Method for Asset Protection, you know that protecting your assets isn’t just about having the right legal structures in place—it’s about understanding how to navigate a complex web of regulations that can impact your financial security. The GTOs are a perfect example of this intersection. They are designed to ensure transparency in real estate transactions and reduce the opportunities for hiding assets behind anonymous shell companies.

However, transparency doesn’t have to mean the loss of privacy or protection. The key is ensuring that your legal entities are properly structured, your beneficial ownership is clearly defined, and you’re following both state and federal laws. By working with experienced legal counsel, you can ensure that your transactions are not only compliant but also structured in a way that maximizes asset protection.

Challenges and Opportunities for Investors

The renewed GTOs also present unique challenges for real estate investors. For those operating in jurisdictions under GTOs, transactions can now face greater scrutiny, potentially slowing down the purchasing process. Investors may find themselves needing to disclose more personal information than they anticipated, particularly if they are using legal entities to purchase properties.

However, for those who are prepared and well-advised, there is an opportunity to stay ahead of these regulatory changes. Proactively ensuring compliance with both the GTOs and the CTA can minimize disruptions and safeguard your investments. In the long run, transparency and compliance could serve as assets themselves, as more international buyers and businesses seek out partners who are fully compliant with U.S. law.

Final Thoughts

The renewed Geographic Targeting Orders reflect an ongoing effort by U.S. regulators to combat money laundering and illicit finance in the real estate sector. While these measures increase the reporting burden on businesses involved in real estate transactions, they also emphasize the importance of transparency and compliance.

For those looking to protect their wealth and investments, navigating these regulations is a critical part of a broader asset protection strategy. By understanding the requirements and working with experienced professionals, you can stay compliant while protecting your assets and financial future. And as always, the best protection comes from being proactive and informed—don’t wait for problems to arise before seeking advice.

If you have any questions about how these GTOs may impact your real estate transactions or broader asset protection strategy, feel free to reach out. Let’s make sure your assets are protected in today’s regulatory landscape.

< Older Post Newer Post >

Molding Your Financial Future in 2025

January 17, 2025

As we step into the new year, I find myself reflecting on the countless entrepreneurs, professionals, and business owners I’ve worked with throughout my career. Helping clients mold a shield of protection around their assets has been one of the most rewarding aspects of my practice. Time and time again, I’ve witnessed that success isn’t reserved for geniuses, nor does it require a fancy degree. The secret lies in action, strategy, and discipline—traits anyone can cultivate to achieve and maintain wealth. The Myth of Instant Wealth How often have we heard someone say, “When I win the lottery, I’ll finally be set”? It’s a common refrain, but let’s examine the reality. Imagine winning $10 million in the lottery. After choosing the lump sum option and paying taxes, you might walk away with only a fraction of that—perhaps $2 million. Without a solid financial plan, it’s no surprise that many lottery winners end up broke within a few years. True wealth isn’t about luck or flashy possessions. It’s about what you do with your resources and how you protect them. If you look around your community, the truly wealthy aren’t necessarily the ones with the biggest houses or newest cars. They’re often the ones who’ve taken calculated risks, lived within their means, and built unglamorous but steady businesses. These individuals mold the clay they’re given, creating shields of protection around their assets that ensure their financial stability for generations. The Trap of Looking Rich We’ve all seen it—the big house, luxury car, and designer wardrobe. But appearances can be deceiving. Many who look wealthy are drowning in debt, spending more than they earn, and chasing the illusion of success. As my wife lovingly calls it, Dickersonism #7: “Looking rich does not MAKE you rich.” True wealth is built on a foundation of solid, income-generating assets, not consumables. Falling into the trap of “keeping up with the Joneses” (or Kardashians) often leads to financial instability and missed opportunities to create lasting wealth. The Cost of Inaction One of the greatest obstacles to wealth and protection is inaction. Henry Ford famously said, “If you think you can, you can. If you think you can’t, you can’t. Either way, you’re right.” Inaction is the path of least resistance, but it’s also the path to missed opportunities and unfulfilled potential. Some hesitate out of fear or over-analysis, a condition I call “analysis paralysis.” It’s easy to get caught up in what could go wrong, but this mindset keeps you stagnant. Every successful person I’ve worked with has one thing in common: they took action. They understood the risks but focused on the rewards, moving forward despite uncertainty. Setting Your Course for 2025 If you haven’t taken steps to mold your financial future, now is the time. Ask yourself: Where do you want to be a year from now? In five years? In ten? Define your goals and begin building the path to reach them. Just as importantly, protect what you’ve built. Not having a plan to shield your assets is like running exposed electrical wiring—sooner or later, you’ll face unnecessary risks. A board-certified estate planning attorney can help you design a plan to safeguard your wealth, ensuring it stays secure for you and your loved ones. Take Control of Your Future Success doesn’t just happen—it’s molded. Listen to trusted advisors, but remember that the final decisions are yours to make. Clarify your vision, take bold steps, and build the life you’ve always dreamed of. At The J.M. Dickerson Law Firm, we’re here to guide you every step of the way. Whether in person, by appointment, or via Zoom, we’re committed to helping you create a legacy of success and security. Contact us today, we can help! South Texas: 956-791-5422 Central Texas: 830-302-4577 Let’s make 2025 your year of action, growth, and protection.

Embracing the Holidays as a Time for Estate Planning

December 20, 2024

The body content of your post goes here. To edit this text, click on it and delete this default text and start typing your own or paste your own from a different source.

Start the New Year Strong: Four Steps to Success

December 13, 2024

As the end of the year approaches, it’s easy to feel the weight of unfinished tasks and the hustle of the holiday season. Between wrapping up work projects, preparing for family gatherings, and making plans for the future, this time of year can feel overwhelming. But amidst the busyness lies a valuable opportunity—the chance to press reset and prepare for a fresh start. The New Year offers a clean slate, making it the perfect time to reflect, reorganize, and refocus your goals. By dedicating some time to the right activities now, you can set yourself up for success in the months ahead. Here are four key steps to help you start the New Year on solid footing. Step 1: Reflect on the Past Year As the calendar flips to a new year, many of us naturally find ourselves looking back at the previous 12 months. This is the perfect moment to assess your professional and personal accomplishments, challenges, and growth. Ask yourself: • What were my biggest successes this year? • What goals did I miss, and why? • What strategies or habits worked well for me? • Where can I improve moving forward? Reflection isn’t just about identifying wins and losses; it’s about understanding the “why” behind them. Seek feedback from colleagues, mentors, or trusted peers to gain new perspectives. The more honest and thorough your evaluation, the more valuable it will be as a foundation for future planning. Step 2: Create a Game Plan for the Year Ahead Reflection is only the beginning. To make real progress, you need a clear and actionable plan for the year ahead. Start by defining your big-picture goal for the next 12 months. What’s the most important outcome you want to achieve? Once you have that, break it down into smaller, measurable objectives. For example, if your goal is to expand your business, your smaller objectives might include increasing marketing efforts, attending networking events, or launching a new service. Outline the steps needed to achieve each objective and set realistic timelines for completion. Revisit your goals regularly—at least quarterly—to ensure you’re staying on track or to adjust for any changes in your circumstances. Flexibility is key to maintaining momentum throughout the year. Step 3: Declutter Your Inbox An overflowing email inbox can be a constant source of low-grade stress. Ending the year with a streamlined and organized inbox can give you a fresh sense of control as you head into January. Here’s how to tackle it: • Respond immediately to any urgent or unresolved messages. • Delete emails that are no longer relevant. • Unsubscribe from newsletters or mailing lists you no longer find useful. • Create folders and filters to better organize incoming messages moving forward. To keep your inbox manageable, schedule regular cleanups throughout the year. Whether monthly or quarterly, these maintenance sessions will prevent clutter from building up again. Step 4: Knock Out Small Tasks The small, unfinished tasks lingering on your to-do list can be more draining than you realize. Use this time to cross off as many as possible before the New Year begins. • File paperwork that’s been piling up. • Respond to emails you’ve been avoiding. • Wrap up loose ends on ongoing projects. Completing these small but nagging tasks will give you a sense of accomplishment and free up your mental bandwidth for bigger goals in the New Year. Starting January with a clean slate will allow you to hit the ground running. Your Fresh Start A new year is a chance to realign your priorities, set meaningful goals, and approach your work with renewed focus. By reflecting on the past year, setting actionable goals, decluttering your space, and tying up loose ends, you’ll create the foundation for a successful year ahead. Whether you spread these steps out over a few weeks or tackle them all in one day, the most important thing is to commit to the process. A little effort now can make a big difference in how you start the year—and how you finish it. Here’s to making the most of your fresh start!