I work in a BSA investigations area and we seem to have different perspectives on structuring and whether a SAR should be filed in the following a situation:

A retail grocery store usually makes cash deposits each weekday in various amounts. On some days, usually twice a month or so, they will deposit cash over $10,000 and CTRs are subsequently filed. However, on some days, they will deposit right at $10,000, sometimes conducting the same amount over consecutive business days. They have a consistent pattern of depositing above $10,000 and right at $10,000.

To me, I think that the deposits conducted at $10,000 appear structured and SAR should be filed; however, others in my area feel that since they routinely and knowingly have CTRs filed on them, no SAR is necessary.

Please let me know your thoughts.

thanks!

When they deposit over $10,000, how much are they depositing?

If they usually deposit even amounts, I could see why they would be depositing exactly $10,000 on some days.

For example, when it's over, are they depositing $11,000 or $12,000? Or are they depositing uneven amounts?

Your customer is what i like to call a "benign structurer."

Your scenario is blatantly structured activity and you should file a SAR. However, your bank can decide (designated committee) not to file if you have identified this activity as typical for your customer. From experience, a lot of these supermarkets deposit in those amounts due to insurance coverage. If so, ask for that coverage. Some also say that their CPA advised them.

Depending on the size of this supermarket, your customer may need some education. Hand them(actual owners NOT the cash runners or conductors) the FinCEN issued CTR reference guide. If this still does not work, then you may file forever.
http://www.fincen.gov/whatsnew/pdf/CTRPamphletBW.pdf

The fact that you have filed CTRs gives MORE of a reason that they are probably, knowingly, purposely depositing under the reportable threshold. The hardest job for a DA's Office to prove its case is that very fact, that the customer knows the CTR limit. The first thing the DA will ask for is copies of those very CTRs.

The flip side is dealing with your regulators, they'll most likely question it which is when, us as bankers, are caught in the middle. Depending on your bank's resources conduct your EDD periodically on this supermarket.

Anyway, sorry for the long response, i get excited when i see this kind of stuff. Good luck.

thanks so much for the insight! this is VERY helpful. Aloha!

If this is normal activity for your customer, why would you file a SAR? It's obvious that he's not trying to always stay under the CTR reporting threshold, otherwise you would not be filing any CTRs. We have customers that always deposit even amounts, whether it is above or below the CTR threshold.

I disagree with Huezoslb and this statement

The fact that you have filed CTRs gives MORE of a reason that they are probably, knowingly, purposely depositing under the reportable threshold. The hardest job for a DA's Office to prove its case is that very fact, that the customer knows the CTR limit. The first thing the DA will ask for is copies of those very CTRs.

Huezoslb, what is a 'benign structurer'?

My thoughts are the same as Georgia Plum.

I agree. MauiBuilt, I have a gas station with very similar transactions, and I haven't filed a SAR. Because they regularly go over the limit, I believe it is LESS likely that they are structuring. Customers who structure tend to always structure. They don't say to themselves, "I'll structure this week and let the bank file CTRs the next."

Similar situtation is a customer who has an ATM in their gas station. The machine physically holds $10,000 in cash so when it's empty, they come to the bank to W/D $10,000 to replenish. This is easily documentable for us because they draw directly from the daily ACH credits, so we can that the machine has gone through $10,000 when each withdrawal is made.

Georgia, a benign structure is a business who typically deals with cash and it makes sense for the their type of business.

Examples: a self employed electrician, plumber, general contractor, gas station, etc.

If their transactions make sense, why file a SAR?

I agree, I have had customer's with similar activity and do not consider the transactions to be structured.

I agree, if it's routine activity for the customer, a SAR is not warranted.

thank you all for your input!

Sorry if i wasn't initially clear.
A benign structurer isn't necessarily bad OR it doesn't mean that you'll have to file.

It's just a term we used to use(at my previous employer) and stuck.

Not a good term because structure means structuring to intentionally evade the reporting requirements. If they are regularly having ctr's filed, they are not trying to evade reporting so dig to determine why they occasionally are hitting right at or below the threshold.

Two things I would check in deciding whether or not to file:
1. Is the same runner(s) conducting all transactions, or do different runners make deposits? If different, is it the same one always making the $10,000 deposits? (I have seen this happen before when one runner refused to provide ID and so as an individual would not bring a deposit with more the $10,000 whereas other runners did).
2. Are the CTRs that are filed a result of aggregate deposits, or is it a single deposit that exceeds $10,000?

If the answer to 1 is a single transactor conducts all, I probably wouldn't file...otherwise I am likely to.
If the answer to 2 is single transaction, I probably wouldn't file...otherwise I am likely to.

KathleenB, I disagree. You said:

"Not a good term because structure means structuring to intentionally evade the reporting requirements."

But everybody structures. That you deposit your paycheck instead of cashing it is structuring. That you withdraw $40 twice a week instead of $80 is also structuring. Those are prudent cash management tools to minimize the risk of loss. Not structuring to evade reporting.

Structuring to evade is different, and it sounds like they may be. The insurance comment might justify such structuring (if true), but I think it more likely it is to avoid the courier having a CTR filed.

Al

Hi rdelgado:

1. I'm glad you pointed this out..and thought perhaps there are different runners. The same person usually conducts the deposits above $10,000, but I am not certain at this point if that same person conducts the one at $10,000.

2. The CTRs that are filed are usually a single even deposit above (i.e $16,000, $18,000, etc)

I used to have customers who would consistently wire 9,000 - we called those imaginary structuring because it was just plain stupid since there was no rule re wires. Of course it was a red flag and we checked to see what they were trying to hide.

In this case, it seemed to me that the bank had determined it wasn't really structuring but there were other legitimate reasons the customer used those amounts - I wouldn't call that benign structuring. It could be misleading and I hate to be misleading in any way shape or form when examiners are involved.

In my opinion, this does not sound like structuring - benign or malignant. They're a business with cash needs; perhaps you should ask them why they've deposited $10,000 flat instead of filing a SAR. Convenience store managers often instruct their employees to limit the amount of cash they bring to the night drop due to security concerns. Is their apparent intent to avoid CTR filing? They've proven they're not averse to CTR filing. Do you think the CTR triggering transactions are red herrings to throw law enforcement off the trail?

In my opinion, the existence of those CTRs is the deciding factor; and makes the decision to file a SAR go from appropriate to asinine.

There seems to be a persistent myth that the customer has to structure all the time in order to be suspected of structuring; many banks do not file on customers on whom they occasionally file CTRs. I've heard FinCEN reps say from the podium that a single instance of structuring is reportable without regard to what the customer usually does.

If the question is worth your time, call the Helpline to get an answer you can put in the file to explain what you did or did not do.

As suggested, I would ask the customer for an explanation before I did anything else.

I agree that a single instance of structuring is reportable. However, I don't think that every $10,000 cash transaction is a structured one. A conversation with the customer may clear this up for you.

I think I have to go to whether or not you see it as suspicious. If you routinely file CTRs, but they sometimes structure their deposits, as if to avoid a filing, look at the whole picture.

$10,000 each day for 3 days appears to be structuring. When you file CTRs, are you filing for around $30,000 or is it more like $15,000. Could they be structuring to avoid filing CTRs so that the overall bulk of cash reported via CTRs is smaller at the end of each month? Absolutely.

You need to understand your customer's business to make your decision.

If I decided that the $30,000 should really be closer to $10,000 or $15,000 based on their normal business activity, they could be laundering illegal funds through the account. I would file.

If I could explain it as a security issue, I would not.

To follow up, I'm here in SF at the WCAML Conference and Tom Fleming along with other Law Enforcement folks did state that Money Launders don't care about CTRs, they don't structure anymore because they have SO much cash to get rid of.

Even if the cash comes from a legitimate source AND it appears like blatantly structuring, the bank is obligated to file.

The problem here is that there is a major disconnect between those of us in trenches and those up in their ivory towers.

Of course law enforcement and FinCEN would say those things, they read the SARs and prosecute the suspects that actually conducted such activity. To them, it makes sense to file. But how many of those talking heads have ever sat in front of a computer and decisioned alerts?

Can it happen? Of course. But, AML Analysts make their decisions based upon probabilities. If a customer occasionally makes cash transactions above the threshold and knowingly and willingly provides information for the CTR; then the probability that the transactions which APPEAR to be structured actually ARE structured decreases significantly. No SAR needed. And FWIW, I have a reputation for being trigger-happy when it comes to SAR filing.