The New York Times is taking a victory lap as the Federal government takes steps to establish oversight on the high value, all-cash real estate transactions that go unreported or whose beneficiaries are hidden by LLCs and shell companies. The newspaper says the program was provoked by its series on these transactions. Now the Times reports that the Treasury department is going to ask title insurers to provide the names behind LLCs in all-cash deals in New York and Miami. The program will run for six months after which the Treasury department will decide whether they’ve detected enough suspicious sales to create a permanent reporting process across the country.

Real estate professions have no legal requirement to know the identities of LLC owners, just as the art dealers have no responsibility to know the end buyer of a work of art. But a successful program in real estate might lead toward Treasury taking a look at the art business:

The use of shell companies in real estate is legal, and L.L.C.s have a range of uses unrelated to secrecy. But a top Treasury official, Jennifer Shasky Calvery, said her agency had seen instances in which multimillion-dollar homes were being used as safe deposit boxes for ill-gotten gains, in transactions made more opaque by the use of anonymous shell companies.

“We are concerned about the possibility that dirty money is being put into luxury real estate,” said Ms. Calvery, the director of the Financial Crimes Enforcement Network, the Treasury unit running the initiative. “We think some of the bigger risk is around the least transparent transactions.”

U.S. Will Track Secret Buyers of Luxury Real Estate (The New York Times)