The Financial Crimes Enforcement Network (FinCEN) has identified thousands of instances where financial institutions, particularly banks and money services businesses (MSBs), filed suspicious activity reports (SARs) involving title and escrow companies, often in connection with mortgage fraud.
In a press statement, FinCEN says that it does not currently require title and escrow companies themselves to file SARs, but many have reported suspicious activities by annotating the Report of Cash Payments Over $10,000 Received in a Trade or Business (FinCEN Form 8300), which they are required to file.
Structuring, false statement, and mortgage loan fraud were the primary activities reported from 2003 through 2011, the period which FinCEN analyzed. The study covers 11,800 records filed by depository institutions, 10,000 records filed by MSBs, and over 1,000 annotated Forms 8300 filed by title and escrow companies.
‘This first baseline study will help inform our ongoing efforts to identify regulatory gaps that criminals look to take advantage of,’ says FinCEN Director James H. Freis Jr. ‘We can now more efficiently and effectively address those gaps and mitigate those risks through public awareness, support to law enforcement or appropriate regulatory action. This comprehensive review provides greater context to understand the individual instances previously identified by FinCEN in its studies of mortgage fraud and money laundering in the real estate industries, as well as in supporting criminal investigations and prosecutions that involved title and/or escrow companies.’