John Smith has 3 checks written off his account that total over $10,000.

He wants one cashiers check, but he

?

Eventhough he's not avoiding any report that I know of - he still thinks he is.

File a SAR? ... I say yes ...

I would say file as the intent was there and the customer is assuming that they structured and avoided reporting. I think the customer just knew enough to be dangerous as it were. They do not understand the reg.

I have had cases like that in the past for say wire transfers, or cashiers check exchanges etc, where a customer "structured" these transactions to be individually under the CTR limit, even though the particular events were not reportable as they were not cash. However, the customers intent was to structure and break the law.

But that is my opinion.

I agree that a SAR should be filed.
The intent was to structure.

I'm not sure that the intent to avoid something that doesn't even apply is breaking the law, so I'll argue that a SAR filing isn't warranted.

IMO, this is a good example of a pattern that should be found in your "no SAR" files.

He obviously know's the threshold, file.

I would not file. What treshold does he know? Didn't he use checks to pay for the official check? I must be missing something.

I'm with John and Nemsi - what did he do that was a suspected crime.

I may think that it is illegal to skip while crossing the street, but just because I skip while crossing the street does not allow the police to issue me a ticket for illegal skipping.

so would we all agree that this is a classic case of a "not file" - and this customer warrants additional monitoring?

That would be my current course of action on this customer.

Ok, how about this scenario. Business comes in almost every day to withdraw cash. The amounts are always just under the reporting threshold, $9800, $9980, etc. A comment has been made more than once to the teller that "I am just under the reporting limit". To me that's structuring. Am I wrong?

Even if the customer did not make the comment to the teller it is structuring and reportable.

The fact that the customer made the comment means you do not have to do further research to determine if it is a pattern.

Agree, absolutely.

I would file a SAR on this because there is reason to believe that he/she is structuring cash deposits in order to avoid reporting. The transactions involve cash. If he comes in and deposits $9,800 in checks everyday I would not file a SAR even if he believes that he is avoiding some IRS reporting and deliberately limits the amount of his deposit accordingly.

Great! I did the right thing. I was worried for a minute. Thanks for your input!

Sorry to drag this up again ...

But what if the customer (for some reason) starts structuring ... when they are Exempt?

(in this case customer is a good customer - it is believed somebody "scared" them & gave them wrong information)

What to do in this situation? They technically aren't avoiding anything, because if they went over $10k - we wouldn't file a CTR anyways ...

I think we should have a conversation with the customer ... but since they are "structuring" - would you have to file a SAR?


*sheesh*

Since they most likely believe that they are doing this to avoid reporting, it is structuring and IMHO a SAR is in order. You might consider revoking their exemption also, because you will have to do it at the next annual review anyway as they will no longer have the 8 required transactions.

Now aren't we contradicting ourselves?

I'm confused ... if they're not avoiding a report ... why would we file? (see first post I made & responses)


Wouldn't a SAR would be warranted in BOTH scenarios? Based on:

Referencing the original post, whether the person wrote one check or three checks for the purchase of a cashier's check, there would have been no reporting required. Since this involves currency, I think it is a totally different situation and is not contradictory with the previous statements in this thread.

In this case they believe they are avoiding actual regulatory required reporting and barring the exemption that they apparently are not aware of, they are purposely avoiding CTR reporting by structuring their deposits.

I just went over this with my staff - When you "exempt" a customer you are only exempting them from the CTR - NOT a SAR.

I agree file the SAR and remove the exempt status.

This customer must be an idiot, unless the person conducting the transaction is the one who is avoiding his/her name on the CTR. Why would the customer structure when he/she could deposit any amount of cash into the account? Let's see, "I could deposit $100,000 in cash today, but instead I'll hold on to it and attract attention by depositing $10,000 for the next 10 business days."

The customer/conductor is structuring. A SAR should be filed. The customer is exempt from CTR filing, but not from SAR filing.

I don't think the OP was suggesting that they are exempt from SAR filing. I believe the question was since the customer is exempt from CTR filing, are they really "structuring" . Whether they deposit 100,000 or 10,000 a CTR isn't going to be filed so can you still consider it structuring.

FWIW, I agree with everyone that this is still structuring and a SAR should be filed. I just wanted to point out that I don't think the OP thought the customer was exempt from SAR filing.

Before you accuse the customer of structuring, you should find out why they are depositing less than $10,000 at a time. We recently had an exempt customer who normally deposited cash over $10,000 but suddenly start depositing cash just under $10,000, sometimes more than once a day. Why? Their insurance started limiting their coverage to $10,000 so the customer started coming to the bank every time they got near $10,000.

Thank you MN Banker - that's exactly my point ...

While I do agree we should file ... I was comparing this situation to my first situation.

No report avoided ... is it a SAR just because the person thinks they are avoiding?

I've seen this situation even on customers who have signed documentation necessary for exemption approval (re: percentages of ineligible business activities)! When sent an early renewal of the exemption documentation, they signed it again, and continued with the $9800-$9900. OP - look at the timing of the deposits (the specific hour and minute of a group of deposits over a one to two week period). I concluded that since $9800 was deposited two minutes before $9900, with the same teller, by the same customer - there was NO ATTEMPT or INTENT to avoid a CTR. I am imagining a small safe below the customer's feet at their cash register in their store, where they are required to drop cash (to avoid robbery) in increments of $10,000 or less, never wanting a larger amount out of the safe at any time. Or where they are back-office, counting cash, and don't want to go over $10,000 in a batch because that is a lot to re-count if you mess up. Regardless, if you simultaneously hand me three deposit tickets with $9800 to $9900 cash on each of them, I don't think you are trying to structure - but if you look at the aggregation reports, and AML software, it is a false hit every time.

In scenario one, there is no cash to be structured. In my opinion it would be feasable in this situation to document the transaction on a 'no SAR' summary explaining the intent but lack of any 'actual' structuring.

In scenario two, there is cash being structured. I think it would be much more difficult to justify not filing a SAR when there is actual true structuring happening along with the intent to do so.... IF the business is trying to avoid a CTR. As noted above, there are legitamite reasons out there for such a change in behavior.

I mean realistically speaking, when I think maybe a SAR is not necessary on something, I pen a 'no SAR' summary, and if when I read it I think it's weak...I support a SAR filing. In the second scenario my explanation would be something along the lines of 'Customer began depositing cash just under reporting threshold, however due to exemption no CTR would have been filed anyway so no structuring to avoid a CTR actually occurred.' To me, that's weak and I could not imagine trying to defend it to an auditor or an examiner.

However, in the first scenario I would feel confident I could defend the justification not to file based on the lack of any cash involvement. However, I would definitely include a statement that the customer would be watched for possible cash structuring in the future since the bank now has knowledge that they are likely to do it.

Just my thoughts.