The Corporate Transparency Act (CTA) creates new reporting obligations for a wide range of entities formed in the United States. Requires reporting companies to disclose information to the United States Treasury about their owners and persons who exercise control. Establishes tight reporting deadlines for entities formed after January
Under the CTA which went into effect on January 1, 2024, many U.S. small business owners are required to file corporate transparency reports with beneficial ownership information. For most eligible businesses, the filing deadline is January 1, 2025
The Corporate Transparency Act is Orwellian and an early Christmas present for the HOA Industrial Complex, lawyers, lobbysts and politicians: The illusion of fighting money laundering aka the Inequity of Prosecuting the Gnat, Instead of the Camel.
"It is usually safe to assume that any proposed law will do the opposite of its name" – Orwell’s Law
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| CTA going after the small fish |
According to Ledger Insights, while preventing money laundering is a worthy cause, but if it’s not working, fix it fast or find another away. Don’t allow decades more of economic cost with little gain.
In late September 2020, anti money laundering (AML) regulations hit the headlines, following reports that big U.S. banks enable large transactions for the very people that AML rules are meant to stop. Yet, the point that was missed was not just that AML is failing but the lack of effort to objectively measure whether AML is effective. The fact that a tiny fraction of 1% of criminal proceeds is seized says it’s not working. That’s despite the enormous economic cost borne by SMEs and those financially excluded because of AML. Not to mention the privacy invasion of ordinary people and the Orwellian Big Brother role delegated to banks.
In late September 2020, anti money laundering (AML) regulations hit the headlines, following reports that big U.S. banks enable large transactions for the very people that AML rules are meant to stop. Yet, the point that was missed was not just that AML is failing but the lack of effort to objectively measure whether AML is effective. The fact that a tiny fraction of 1% of criminal proceeds is seized says it’s not working. That’s despite the enormous economic cost borne by SMEs and those financially excluded because of AML. Not to mention the privacy invasion of ordinary people and the Orwellian Big Brother role delegated to banks.
The Whale aka The Big Camel
The Great Whacky Curve of Money laundering: 99% of the total amount of money laundering is done by the Big Fish -most of it untouchable: Take the Panama and Pandora Papers: Among those named in the leak were several current or former world leaders, 128 public officials, politicians, hundreds of celebrities, business people, and other wealthy individuals.While twenty-three countries have already recovered at least US$1.2 billion in taxes, Iceland's Prime Minister Sigmundur David Gunnlaugsson has resigned and US taxpayer Harald Joachim von der Goltz was convicted of wire and tax fraud, money laundering, and a host of other crimes and sentenced to four years in a U.S. federal prison, Panama aquits 28, the recovered amount is a slap on the wrist, nothing else of significance has happened.
The Pareto Rule of Money Laundering
99% of the laundered money remains with the Whale and the Shark, while the little fish funds the prosecution efforts that recovers nothing.
Strip clubs
Real estate “flipping” businesses - These companies may purchase real estate using cash, make minimal improvements, and then quickly sell the property. The money used to buy the real estate is dirty. After they sell the property, the money appears clean.
Car washes
Restaurants - Restaurants that are laundering money often only accept cash to make it easy for them to over-report their earnings.
Cryptocurrency trading - Businesses that deal in cryptocurrency can be hard for the government to monitor due to the complex nature of cryptocurrency.
The House Judiciary Committee and its subcommittee on the Weaponization of the Federal Government have been conducting oversight of federal law enforcement’s "receipt of information about American citizens without legal process and its engagement with the private sector."The committee also obtained documents that indicate officials suggested that banks query transactions with keywords like Dick's Sporting Goods, Cabela's, Bass Pro Shops and more.
The laws that apply to community associations grow more numerous and complex every year. It
has unfortunately become virtually impossible for associations to comply with all of those laws
without legal guidance.
But then the Property Management Company will do as told by the board - apparently, whether lawful or not. But if you want to know it's lawful, the board must pay up.
Important aspects of the program include:
• Accurate and timely reporting
• Confidentiality and security of board members’ personal information
• Monitoring for legal compliance now and if regulations change
• Initial filing for associations before the deadline
• Annual updates and additional off-cycle updates as needed
• The cost to the Association is $495 annually and $100 for off-cycle updates.
The Shark: Businesses most commonly used to launder money
These businesses are more likely to be investigated on suspicion of money laundering - include:
Casinos
Casinos
Strip clubs
Real estate “flipping” businesses - These companies may purchase real estate using cash, make minimal improvements, and then quickly sell the property. The money used to buy the real estate is dirty. After they sell the property, the money appears clean.
Laundromats - Since cash is universally used in laundromats, it is easy for laundromats to report that they collected far more money
Car washes
Restaurants - Restaurants that are laundering money often only accept cash to make it easy for them to over-report their earnings.
Cryptocurrency trading - Businesses that deal in cryptocurrency can be hard for the government to monitor due to the complex nature of cryptocurrency.
The Gnat aka Small Fish
The CTA was enacted in 2021 to allegedly 'combat illicit activity including tax fraud, money laundering, and financing for terrorism by capturing more ownership information for specific U.S. businesses operating in or accessing the country's market." Translation: the CTA s designed to catch the small fish: Not unlike the Internal Revenue Service's "$600 rule." If you use an online platform like PayPal, Venmo or Cash App, to collect payments of $600 or more, it must be reported to the IRS: the online platform will be required to send eligible business account holders a Form 1099-K to disclose the income.
By the way, FinCEN also flagged purchases of "religiou texts" as indicators of "extremism," according to the House Judiciary Committee.
The House Judiciary Committee and its subcommittee on the Weaponization of the Federal Government have been conducting oversight of federal law enforcement’s "receipt of information about American citizens without legal process and its engagement with the private sector."The committee also obtained documents that indicate officials suggested that banks query transactions with keywords like Dick's Sporting Goods, Cabela's, Bass Pro Shops and more.
Why is HOA Property Management Companies' accounting software does not supports a financial dashboard and make it available to the HOA board of directors? The HOA boards should be able to forecast when association fees will need to be increased, based on historical and current expenses, with sufficient lead time The Board can then decide whether to make cuts or not.
But Property Management Companies immediately jump on the Anti Money Laundering business! Why? Because regulations such as the the CTA create a clueless captive market, with zero cost of acquisition, whereas selling a financial app requires sales resources.
But Property Management Companies immediately jump on the Anti Money Laundering business! Why? Because regulations such as the the CTA create a clueless captive market, with zero cost of acquisition, whereas selling a financial app requires sales resources.
The laws that apply to community associations grow more numerous and complex every year. It
has unfortunately become virtually impossible for associations to comply with all of those laws
without legal guidance.
Because there's more money out there and the HOA Industrial Complex jumps in the CTA bandwagon: The Homeowners Associations' 'Preserve Property Values' is Myth. It's the HOA Industrial Complex!
If the cities benefit so much from homeowners associations, why are these viewed by city bureaucrats as orphaned children? Because in the age of artificial intelligence (AI) we are surrounded by bureaucratic Arrogant Incompetence (AI.)
Which is part of the HOA Problem
For example, this HOA Property Management Company agrees to "undertake commercial reasonable efforts to implement the lawful decisions of the HOA board."
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| The manager will do as told by the board- apparently whether lawful or not. |
The Property Management company will not tell you if the board's decision is legal or not unless the board pays to find out.
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| Selling CTA using FUD: Fear, Uncertainty and Doubt. |
On the other hand, the Property Management Company uses the FUD strategy: Fear, Uncertainty and Doubt, to have the HOA board to agree on wasteful structural expense, including having to opt-out, not opt-in, as shown in e-mail to the board, below.
E-Mail sent to Homeowners Associations Board of Directors by Blue Mountain using FUD strategy: Fear, Uncertainty and Doubt.
From: Caren Fewell
Dear Board Members,
We wanted to bring to your attention the Corporate Transparency Act (CTA), a new regulation that mandates organizations in the United States to file Beneficial Owner Information (BOI) with the Financial Crimes Enforcement Network (FinCEN) of the United States Treasury. This requirement aims to combat money laundering and other fraudulent activities. We had been hopeful that community associations would be excluded. This has not occurred and failure to comply can result in significant fines. All associations must comply with the CTA and report association details and information about those with substantial control over the entity by December 31, 2024.
To provide more information regarding the CTA and its implications for community associations, the link will take you to a recorded webinar that covers the details of the act, compliance requirements, and how board members can fulfill their obligations. Please see the link for the recording below:
Corporate Transparency Act: Everything You Should Know
At Blue Mountain Community Management, we will support this process to assist our communities with FinCEN filings. In September, we will be rolling out a secure, web-based platform centrally administered for all Associations. This turn-key solution allows board members to meet reporting requirements securely and easily. Most importantly, the solution allows board members to enter their own personal identification information so that it is 100% secure and confidential.
Important aspects of the program include:
• Accurate and timely reporting
• Confidentiality and security of board members’ personal information
• Monitoring for legal compliance now and if regulations change
• Initial filing for associations before the deadline
• Annual updates and additional off-cycle updates as needed
• The cost to the Association is $495 annually and $100 for off-cycle updates.
In the upcoming weeks, you will receive a link from our platform that will require you to input your legal name, address, date of birth, and identification number via your driver's license or passport ID number. Additionally, you will be asked to upload an image of these identification documents. Please be aware that our management team and administrators will not be able to process this request on behalf of board members due to the sensitivity of this information.
If you do not wish us to file this for your association or you have already had this filed, then please let us know by emailing CTA@bluemountaincommunity.com . Individual board members cannot opt out of this requirement; only associations can opt out by sending an email to CTA@bluemountaincommunity.com no later than September 30, 2024
We strongly encourage each board member to consult with their legal counsel to understand the necessity for compliance and any mandatory resolutions they may choose to adopt regarding the Corporate Transparency Act.
For more information about the CTA and its requirements, please visit the links provided by FinCEN and the Community Association Institute (CAI) below:
- https://www.fincen.gov/boi-faqs#C_10
- https://www.caionline.org/Advocacy/Priorities/CTA/Pages/landing.aspx
Thank you for your attention to this matter, and we look forward to your cooperation in meeting the requirements of the CTA.
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| FUD Full Court Press |
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