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#371347 - 06/09/05 06:03 PM Combination of entities
Anonymous
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We have a customer who has 2 companies, Company A and Company B, that are separate entities with different TIN's. The principal (X) had been conducting all transactions, so we had been combining them for CTR's. They asked about structuring to avoid reporting, so we filed an SAR.

Now they are dividing the transactions further to try to avoid CTR's. X brings in a cash deposit for Company A and one for Company B. The total of both is less than $10,000. An employee of Company B brings in another cash deposit for Company B. The total of both Campany B cash deposits is below $10,000, but the total of A and B exceeds $10,000.

Since this is being structured to avoid CTR reporting by dividing funds between the 2 businesses (and know that is an aim of the principal), is it correct to combine both businesses and file a CTR? If so, do we list B and check multiple transactions (not listing the multiple individuals, even though we know who conducts them) and then list A and the name of who conducted the single A transaction?

The tellers are tracking who conducts each transaction, and the information is being assembled to submit a follow-up SAR for the continued suspicious activity and to evaluate whether to maintain the account.

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#371348 - 06/09/05 07:16 PM Re: Combination of entities
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
The rule is if the companies are different legal entities, their currency transactions are not subject to aggregation simply because they have common ownership. There isn't anything that suggests that a known pattern of structuring changes your CTR filing requirements.

Yet, here is a FinCEN ruling from a few years ago where the owner was basically ignoring the entities' existence, transfering and moving funds around like a shell game. In this specific instance, FinCEN said the cash was subject to aggregation because the entities were being treated as a single enterprise. Your example does not sound so extreme as this one, I would continue to treat them as separate entities for CTR filing.

Your consideration of a SAR and a potential account closure seems to be on the money. These folks are consuming enormous amounts of your employees' time in order to play this little game.
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