Finding the Ultimate Beneficial Owners (UBO) of account-holding shell companies provides a never-ending investigatory challenge to financial institutions in their efforts to achieve compliance with BSA regulations on money laundering and terrorist financing.
The New York Times has been dipping its toes into those waters with a fascinating multi-part investigation of UBOs—but in real-estate ownership rather than banking. To be clear, the real-estate industry has no legal requirement to identify ultimate beneficial owners of the shell companies that are sucking up high-end real estate in major cities in the U.S. and abroad—and particularly New York and London. But what Times investigators found further informs the often-shadowy origins of big-money shell companies and the hidden individuals that are behind them.
Privacy-conscious wealthy celebrities like Tom Brady and Jimmy Buffett were among the individuals behind high-end real estate purchases by shell companies, but there has also been a flood of shell-company purchases in New York by PEP-style foreigners. Profiles by the Times included investigations into highly politically connected individuals from Malaysia, India, Mexico, and Russia.
The series is a fascinating read, and it speaks to the difficulties of penetrating shell companies, tracking purchases and payments when aliases and extended family are involved, and the labyrinthine task of identifying the sources of massive wealth not obviously connected to legal enterprises or family sources.
AML Partners has been focusing on this challenge of identifying and tracking UBOs for its clients in the financial-services sector. To learn more about our CDD (KYC) software solutions and how we can help you track UBOs for your financial institution, contact us today.