The federal government has made it virtually impossible for buyers of homes in three Bay Area counties to hide their identities from law enforcement by using a shell company and paying all cash — or cryptocurrency.

The Treasury Department’s Financial Crimes Enforcement Network announced last month that it has expanded a program designed to hunt down tax evaders, drug dealers and other criminals who try to hide cash by purchasing homes through shell companies without a mortgage, thereby avoiding the banking system’s know-your-customer and anti-money-laundering rules.

Under the expanded program, title insurance companies must identify any customer who owns at least 25 percent of a legal entity — such as a limited liability company or corporation — that purchases a home for at least $300,000 in one of 22 counties nationwide including San Francisco, San Mateo and Santa Clara.

Previously, different dollar thresholds applied in different areas. In the Bay Area counties, it was $2 million and up. This year, only 3 percent of homes and condos sold in those three counties combined cost less than $300,000, according to research firm CoreLogic. It’s not known how many were purchased by legal entities for all cash.

Many people purchase homes through LLCs for legitimate reasons, such as anonymity, liability and estate-planning strategies. But Fincen said they are also used to purchase homes by people implicated or suspected of “various illicit enterprises” including foreign corruption, organized crime, fraud and narcotics trafficking.

In January 2016, Fincen announced a “geographic targeting order” that required title companies to report to Fincen the “true beneficial owner behind a legal entity involved in certain high-end” home purchases in Manhattan and Miami-Dade County. That July, it expanded the order to 12 more counties in California, Florida, New York and Texas. Fincen added Honolulu in August 2017. Last month it added counties surrounding Boston and Seattle and purchases made, at least in part, with virtual currency.

These reports are not made public. Fincen puts them into a database where they can be cross-referenced against reports filed by banks, mortgage brokers, casinos and other companies under the Bank Secrecy Act. These include “suspicious activity” reports and cash transactions over $10,000, Fincen spokesman Steve Hudak said.

In February 2017, Fincen announced that 30 percent of transactions covered by its order involved a person who “is also the subject of a previous suspicious activity report.”

Fincen is not required to announce changes to this program, and sometimes it doesn’t. This year, it issued a confidential order to title companies that, among other things, dropped the purchase-price threshold to $300,000 nationwide, said Steve Gottheim, senior counsel for the American Land Title Association, which represents title companies.

The secretive nature of the order “created problems for us,” Gottheim said. “You can imagine someone trying to buy a home in San Francisco and sees that the only public version they know of said $2 million was the threshold.” If they are buying a lower-priced home through an LLC, “they don’t think they should be reporting” their identity. After hearing about those issues, Fincen decided “to no longer require the terms to be confidential,” he said. The November order “did not change anything from what we were doing” since earlier this year.

In May, Fincen confidentially expanded the order to include trusts, which created another set of problems because so many people purchase homes that way, said a San Francisco title agent who asked not to be named because she is not authorized to speak publicly. That was reversed in the November order.

Hudak would only confirm that Fincen’s latest order does not apply to revocable or irrevocable trusts.

It’s hard to gauge whether the expanded order will drive buyers out of Bay Area real estate. “If it was going to have an impact, this is one of the places it would have one,” said Alina Laguna, a lawyer and broker associate with Re/Max in San Francisco. “In San Francisco we have a lot of buyers from outside the United States. A lot are very private people. They make a lot of cash purchases.”

Jordan Levine, senior economist with the California Association of Realtors, does not think Fincen’s latest order will affect the market. “With the price appreciation we have had, we have seen all-cash deals dwindling for the last couple of years. They are at fairly low levels now,” he said. Many investors who paid cash during the recession for homes to rent out are now putting them back on the market, he said. It’s also become harder for people buying homes to live in to pay all cash.

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People who want to launder money through homes could simply purchase in a county or through a structure not covered by the order, or go without title insurance.

“They could buy in the name of a relative or straw buyer. If it’s not a U.S. person, it may be difficult for the United States to get any information on the person,” said Ville Rantala, an assistant finance professor at the University of Miami.

Rantala co-wrote a study that estimated the impact of Fincen’s order on the real estate market. It looked at all-cash purchases by corporate entities in 17 states where it could get the necessary data. Before the first order was announced in January 2016, all-cash purchases by corporate entities were about 10 percent of the dollar volume of housing purchases in all 17 states. After the first order was announced, the number purchased that way dropped by 66 percent across all markets and by 95 percent in Miami, one of the first two target markets. “The decline started immediately after the order took effect in March 2016,” he said.

The drop coincided with an increase in noncorporate cash buyers.

Even though the initial order covered only two cities, the move seemed to “scare away” corporate buyers elsewhere, perhaps because “they worried further regulation may be coming,” Rantala said.

There was “very little change” across all markets after the second wave of counties was announced in July 2016, although there was a small drop in the metro areas listed in the second round, Rantala said.

The report also estimated that high-end home prices in the 14 counties covered by the first two orders grew 4.2 percent less than in other metro areas nationwide in the year that ended in March 2017.

Rantala does not think the latest order will have much impact on the real estate markets, but a bill in Congress that essentially would expand the orders nationwide could. If it passes, however, fraudsters would probably find another place to put their money.

“Money laundering is always a game of whack-a-mole,” Gottheim said.

Kathleen Pender is a San Francisco Chronicle columnist. Email: kpender@sfchronicle.com Twitter: @kathpender