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Question & Answer
Question: I know my question is common, but I'd like to see an answer in writing. A customer comes in with $16,000 in cash. We were getting the information for the CTR, but when she found out the report was going to be filed with the IRS she refused to tell us her occupation. What do we do now?
Answer: We talked to the Office of Financial Enforcement about your question, and their answer was pretty standard. Unlike the same situation in the transactions between $3,000 and $10,000, they don't have the authority to tell you to refuse an "over $10,000 transaction", although, of course, that is one of your choices. But they will tell you…"Every Currency Transaction Report you fill out must be accurate and complete. Failure to do so can result in civil penalties."
The response from our own staff of Bank Secrecy experts was a little more detailed. They said you need to consider the facts of each case.
Is this a customer you know?
Is it a one time deposit, or one of many?
What is your opinion of the transaction?
If a cover letter is attached to the CTR explaining the lack of information, are you comfortable with the fact that if IRS does a subsequent investigation, your financial institution may be placed in a compromising position?
If IRS does a subsequent investigation and finds out that your customer is laundering cash, what is your risk of prosecution by the Treasury Department?
The first choice of our staff would be to refuse the transaction. For $16,000 it isn't worth the risk.
If you choose to accept the transaction, the second choice is to check off the suspicious transaction box, fill out a Criminal Referral Form, and make your telephone call to IRS-CID, documenting your entire process.
The bottom line is a fine line between servicing your customer, and risking a civil and/or criminal penalty for violating the Bank Secrecy Act. We are firm believers in quality service. However, in a case such as you describe, we feel you should lean toward the protection of your institution.
Copyright © 1994 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 4, No. 8, 2/94
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