So we live in the sticks & customers withdraw cash for building contractors because they "get better deals".

I have one customer who consistently withdraws $9,500 in cash to pay the contractor. The funds are from a construction loan that we gave them.

If I can determine (by asking the customer) that the contractor has requested this amount ... is it no longer suspicious?

I would not go off that reason alone. I would have a hard time believing that the contractor is consistently charging that much - i.e. that their costs never change. Regardless of what the customer states it is the responsibility of the bank to perform enhanced due diligence. Do a drive-by to see if the customer is having work done on their house. I think if anything, the customer may not know that the contractor is asking them to structure. Depends on where the contractor is placing his funds - if you could find that out and both you and that bank are registered then you could share info.

Oh BTW - love your quote. hilarious!

I'm guessing the customer does not know what they are doing is "structuring". I believe they have been told by the contractor "pay me XX in cash & I'll give you a discount" & they may know the contractor is evading some taxes ... but I don't think the customer fully understands what their involvment means ...

Such a touchy subject to talk to the customer about. Do I just file & hope the activity ends when the house is complete?

(It's our construction loan - so we have to disburse the funds - we know the house is being built)


Thanks beach girl! I love the movie :o)

The customer is assisting/aiding/abetting in structuring cash transactions to avoid reporting. Structuring cash transactions is illegal whether they know it or not. If the contractor was receiving more than $10,000 at a pop from this customer, he would have to report the customer on a Form 8300.

It seems that the only reason a contractor provides 2 prices a cash payment price and payment by check or credit card is the the contractor is not reporting the cash sales. Aside from the possible structuring issue, is whether a SAR should be filed because the customer may be assiting in tax fraud. While some people may be so niave as to not understand this is occurring, I suspect most realize but don't care. Participating in a criminal act justifies filing a SAR.

What also amazes me is that the bank hands the customer cash for construction draws. How does the bank know that the contractor actually gets the money? The customer could give the contractor the cash or not, the contractor says he never got paid, the bank is stuck in the middle with all kinds of liens on the structure.

This is way wrong in more ways than one. I also think that the bank is a participant by allowing this to happen and might itself be implicated in a SAR investigation.

See this thread - is it really any different?

http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1119813&gonew=1#UNREAD

We don't hand the customer cash. The money is dispersed to their account. The customer then writes the checks for cash. I'm not the loan expert on how this is to be properly completed. I'm guessing they have invoices to show how much money should be dispursed.

Of course I am filing SARs on this activity ...

I'm just wondering if we should even talk to the customer ... since I believe they are good customers who do not fully understand what their involvment means for them ... or just continue to file SARs until the house is done & the activity stops.

*warning - rant*
I understand structuring is illegal no matter what ... but it sometimes frustrates me that we clog the system with this type of activity that could be stopped with a simple conversation ... but we're told we're not allowed to discuss the laws with customers because then we could be a part of the structuring!

It's the same as speeding. How do I know I'm speeding if there are no signs posted? And the information that would keep me from speeding is not readily available to the general public. Had I known I could go to jail for speeding - I may not have sped in the first place.

(Not as)newbsa I totally agree with you!

Give the customer the FACTS YOU SHOULD KNOW ABOUT CURRENCY REPORTING brochure.

There is no problem with telling your customer what the law requires. The difficulty is that you have to limit that conversation and make certain you do not provide enough additional information to be accused of "assisting in structuring." Hence, devsfan's suggestion that you hand out a pamphlet that simply explains the law; the pamphlet is an internal control that makes certain you do not over explain.

FinCEN is working on a pamphlet of its own on CTR filing. (It's finished and going through the final approval process.) I'm curious to see how it might be an improvement over the commercial product.

As an aside, I believe that only a small fraction of the general public knows that large currency transactions are reportable and that an even smaller portion of the total might realize that avoiding the reporting requirement is a crime.

Nevertheless, when the person who gives my daughter riding lessons, trims my trees, or reupholsters my couch asks to be paid in cash I know exactly what is going on and I think everybody else does too. If you refuse to pay people in cash you are innocent. If you do not...