On a recent trip to Geneva, I was chatting with a local resident when he told me that the watch industry has been suffering. Sales of Swiss watches were down, he said, and he offered a fascinating explanation: over the last few years, the government of China has instituted a broad crackdown on official corruption—and particularly on the giving, or receiving, of extravagant gifts. As a case study in the butterfly effect of international graft, it seemed almost too neat to believe. But it’s true. In fact, the whole luxury sector was affected by the regulations, from designer handbags to high-end spirits. Last year, when consultants from Deloitte surveyed Swiss watch executives, eighty per cent of them indicated that demand was down “due to anti-corruption legislation” in China.

This question of how one country’s graft might fuel the economy of another arose again last week, when the U.S. Treasury Department announced an initiative to track the secret buyers behind the trade in luxury properties in New York City. It is a truism, at this point, to observe that financiers and deep-pocketed foreigners are remolding Manhattan into a gilded citadel. But if you’re part of the élite, this may be something to celebrate. “If we could get every billionaire around the world to move here, it would be a godsend,” Mike Bloomberg said, in 2013. Sleek and skinny super-luxury buildings spring up around Central Park, and single apartments sell for nine-digit figures, adding credence to the caricature of Manhattan as a club for global plutocrats.

For many New Yorkers, this is not, in fact, a godsend: exorbitant prices in the tens of millions of dollars pull up prices in the lower end of the market, driving working- and middle-class people out of the city. And as a contemporary Jane Jacobs might observe, had she not been priced out of the West Village, billionaires don’t necessarily make good neighbors. Because luxe Manhattan real estate generates a good return, many people don’t actually live in their investment properties. If they’re not residents, they’re paying no local income tax here, and because of a steep tax abatement on certain luxury properties, they can often pay very little in real-estate taxes. (According to the Times, the annual taxes on a unit that sold for a hundred million dollars recently come to about twenty thousand dollars.)

On the upside, you won’t actually see these neighbors very often—because they aren’t here. According to the Census Bureau, throughout a sweeping stretch of midtown—from Forty-ninth to Seventieth streets, between Fifth Avenue and Park—nearly one in three apartments is completely empty at least ten months a year. In a revealing 2014 New York piece, which observed that real-estate ownership in the city “can be made as untraceable as a numbered bank account,” a developer concludes, “The global elite is basically looking for a safe-deposit box.”

As the Treasury Department’s announcement last week makes clear, it’s not just that your neighbors in midtown aren’t holding the elevator for you in the morning or popping into the local deli. The identities of the actual owners are often missing from the paper trail associated with the apartment itself. Increasingly, transactions for high-end properties are done in cash, using shell companies and limited-liability corporations—a web of legal obfuscation that can make the individual who paid for a property virtually impossible to identify. (This tactic is not unique to New York. Last year, Ed Caesar wrote a fascinating piece for the magazine about his efforts to track down the owner of the most expensive mansion in London.)

The new changes by Treasury were prompted, in part, by “Towers of Secrecy,” an extensive series in the Times, about the wealthy foreign buyers—many of them current or former government officials, or their family members or associates—who purchased apartments in the Time Warner Center, on Columbus Circle. The series is a tour de force: the Times team amasses an astonishing collage of circumstantial evidence that the money flooding into the building is dirty. Yet it might be most interesting for what it fails to prove, in the end making no direct allegations of criminal wrongdoing against any individual.

This is no knock on the authors, who were incredibly dogged in their investigation. (At one point, a reporter attempted to out the possible owner of an apartment by showing up at the Time Warner Center and asking for him by name, “to deliver him a bottle of wine.”) The money is just too hard to follow. Indeed, the limitations of the series point to the need for serious reform: the system is currently so opaque, and so rigged to shield the source of funds sloshing into New York’s real estate market, that even a well-resourced team of tenacious Times reporters could only arrive at a picture that was suggestive, but incomplete.

Of course, in many instances—the majority, even—the money is entirely legitimate, clear of any criminal connection or suggestion that it may have been pilfered from the public coffers. It stands to reason that some buyers, particularly very wealthy people or celebrities, may simply want anonymity. But in a significant number of cases there have been indications of impropriety: of foreign buyers using the secrecy and lax regulation of New York real estate to launder the proceeds of criminal activity; of foreign officials enriching themselves while in office and then stashing their gains in a condo with a view of Central Park.

It is a bit surprising to find so little transparency in the real-estate market, in light of the great vogue, since the terror attacks of 2001, for cracking down on dirty money. Efforts to track the finances of terror groups, and of corrupt foreign leaders, have led to a dramatic expansion in government scrutiny of other professional sectors. The U.S. government has also cracked down on the Swiss banking industry, in order to curb the use of secret accounts for tax evasion. As it happens, the U.S.A. Patriot Act originally contained a provision that would have required brokers and other professionals who were involved in real-estate transactions to perform due diligence on their customers—but after intense lobbying by the real-estate industry, that provision was dropped. Today, while banks are obliged to institute “know-your-customer” safeguards against money laundering, real-estate professionals are not. “Sometimes they come in with wires. Sometimes they come in with suitcases,” one broker who caters to foreign buyers told New York. In the Times series, a former manager of the Time Warner center said, “The building doesn’t know where the money is coming from. We’re not interested.”

The new regulations will oblige them to be interested. The effort will begin by focussing on two real-estate markets—Manhattan and Miami—and requiring title-insurance companies to identify the “beneficial owners” behind the shell companies and L.L.C.s involved in a transaction, in order to determine who the actual buyers are. This information would then be reported to Treasury. If officials can definitively establish that any of these apartments or houses were purchased with funds that were misappropriated or otherwise tainted, there could be a basis for seizing the property, through the Kleptocracy Asset Recovery Initiative. (A couple of years ago, the second vice-president of Equatorial Guinea, one of the poorest countries in the world, was obliged, under this program, to turn over his thirty-million-dollar residence, in Malibu.)

There’s no reason to think that, on its own, Treasury’s efforts to pierce the veil of anonymity in real-estate transactions might also burst the Manhattan housing bubble. But if I were a real-estate professional who catered largely to wealthy foreigners, I’d be thinking about the lesson of those Swiss watchmakers.