Skip to content

Stop Money Laundering!

$3,000 RULE GIVES US MORE AMMUNITION

Drugs kill.

Drugs will destroy a body-a family-a society-a nation.

It has not been enough to "Just say 'No' to drugs". We have to take steps to protect ourselves and those we love.

The banking industry is a major factor in the war against drugs.

The producer of drugs has to sell to the supplier, who sells to the pusher, who sells to the user.

The user has to buy drugs from the pusher-with money-$5, $10 and $20 bills.

The pusher has to buy drugs from the supplier-with money-$5, $10 and $20 bills.

The supplier has to buy drugs from the producer-with money-but they can't use those $5, $10 and $20 bills.

That's where we come in.

We stop the chain, and we can help win the war against drugs.

The supplier has taken all those $5, $10 and $20 bills from the pusher, and now has to get that cash out of the country in order to buy more drugs from the producer.

The producer only sells drugs in large quantities-costing a million or more.

DO YOU KNOW WHAT A MILLION DOLLARS IN CASH LOOKS LIKE?
A million dollars in $5, $10 and $20 bills all bundled and stacked is a pile of currency about the size of a washing machine.

Pretty difficult to get that out of the country in your luggage!

So all that currency has to either be converted to large bills, or, better yet, to bank checks, money orders, or travelers checks that can fit in a suit coat pocket.

Or deposited into accounts that can be used to wire the money out of the country. (Are you listening, new accounts people?)

This conversion of cash by changing to large bills, buying checks, or depositing to an account to wire out, is called "money laundering".

The people who do money laundering are known on the street as "smurfs"!

A few years ago the banking industry started slowing down this money laundering by filling out a Currency Transaction Report and notifying the Internal Revenue Service or Customs about all transactions over $10,000.

We excluded, as much as we could, the stores and supermarkets that do that much business each day.

The government agents were really more interested in individuals who were coming in with that much cash-especially in $5, $10 and $20 denominations.

It didn't take the pushers and suppliers long to figure out we were going to be asking questions and looking for transactions over $10,000.

So they just dropped back and changed their methods. They started coming in more often with amounts under $10,000.

The government and the banking industry is now going to try to stop their new methods.

Beginning Monday, August 13, 1990, we will start keeping records on anyone who comes in with between $3,000 and $10,000 in CASH and buys a bank check, cashier's check, draft, money orders or traveler's checks.

We aren't going to send those records out of our institution. (Although we are going to keep them all in one central file, by date, for five years in case agents need them later for an investigation.)

We're just going to keep track of all individuals who buy bank checks, money orders, or travelers checks in one day for $3,000 to $10,000 in cash.

Of course, if the total goes over $10,000, we're going to go for the Currency Transaction Report (4789) and fill that out instead.

WE'RE ALL IN THIS TOGETHER.
All financial institutions, nationwide, are required by the government to keep these records-either electronically, or in paper form.

Customers may not be aware of the ruling yet-and they might not understand why we are doing it.

CAUTION!
If you have someone who asks to purchase any traveler's checks, money orders, bank checks, etc., for over $3,000 and when they find you have to fill in the log with their information, they "change their mind", or refuse to give you the information-DO NOT CONTINUE WITH THE TRANSACTION. Call it to the attention of an officer of your institution at once.

Your regular customers may be annoyed by the extra time you have to take. Explain to them that we're helping-in every way we can, to win the war on drugs.

It will be a great feeling to know that you are keeping the pushers and the suppliers out of your office. And somehow, we think your customers will be glad of it, too!

SUMMARY
OVER $10,000 CASH
-in, out, or exchanged for large bills-Currency Transaction Report (CTR)-Form 4789-mail to IRS.Keep copy for five years. $3,000 TO $10,000 CASH

-to purchase bank check, cashier's check, draft, money orders, or travelers checks-log the transaction, send the record to a central location in your institution at the end of each month. Hold for five years.

Copyright © 1990 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 1, No. 6, 7/90

First published on 07/01/1990

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics