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#1584566 - 07/28/11 04:19 PM Can an exempt customer structure deposits?
AuditorK Offline
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Can it be considered structuring if suspect deposits are made to an exempt entity's accounts (A CTR would not have been filed)?

Here's the background:
A month ago, we had an employee of a local business (who is actually exempted from CTRs) ask at one of our branches about how much cash he could deposit without triggering the reporting requirements. The teller gave him FinCEN's CTR/Structuring brochure.

A few days ago, he made a number of deposits to the business's accounts that reek of structuring. He probably doesn't know that the company is exempt and I feel he's trying to keep his name out of a report to the government.

Do we file a SAR for structuring - even though by doing so wouldn't have circumvented filing requirements?

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#1584574 - 07/28/11 04:26 PM Re: Can an exempt customer structure deposits? AuditorK
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I would.

Best advice for SAR filing I ever got was to trust your gut (which you appear to already be doing). Better acronym for SAR is "Something Ain't Right"...sounds like you have that in this situation.
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#1584659 - 07/28/11 05:44 PM Re: Can an exempt customer structure deposits? Tater
BowlingQueen Offline
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This employee is definitely structuring to avoid the reporting requirements (even though the business is exempt), so I would file a SAR.

Question, is he a new employee to the business? I don't understand why, after they obviously had been a customer long enough to exempt, he would be concerned all of a sudden. Weird. crazy
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#1584669 - 07/28/11 05:54 PM Re: Can an exempt customer structure deposits? BowlingQueen
AuditorK Offline
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He is not a new employee to the business. My guess is he read something or someone told hime about the CTR requirements recently and he is now aware of it. Honestly, what made me hone in on this was the fact that he asked a teller a few weeks ago about the limit. I've been monitoring the account ever since, looking for any evidence of structuring.

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#1584675 - 07/28/11 06:02 PM Re: Can an exempt customer structure deposits? AuditorK
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If you feel an individual is structuring you should file an SAR. The fact that the customer is exempt from CTR's does not allow a bank to forgo monitoring any exempt account for suspicious activity. The BSA/AML Manual section on CTR Exemptions states:

"The exemption procedures do not have any effect on the requirement that banks file SARs or on other recordkeeping requirements.
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#1584698 - 07/28/11 06:15 PM Re: Can an exempt customer structure deposits? ACBbank
AquaMarine Offline
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I agree with ACB.
Another grounds for filing a SAR is the intent and the motive behind a suspicious activity. Whether the customer is aware of the exemption procedure or not is irrelevant, as the motive of structuring is to evade the reporting requirements. Herego, a SAR should be filed.
Last edited by AquaMarine; 07/28/11 06:17 PM.
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#1584715 - 07/28/11 06:27 PM Re: Can an exempt customer structure deposits? AuditorK
Elwood P. Dowd Offline
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Quote:
an employee of a local business


Suggest you attempt to flesh out who your SAR suspect is here... Have you had discussions with the business owner or manager where it would be apparent that they are well aware they are exempt?

My point is, it may not be the business or necessarily the owner(s) of the business who are making this decision. It may be just the fool who works for them. If so, that's your suspect and the narrative should explain the situation.
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#1585108 - 07/29/11 02:31 PM Re: Can an exempt customer structure deposits? Elwood P. Dowd
Sing A Little Offline
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I would say yes to at least a SAR investigation. Ken has a great point though, you'll need to find out if this is coming from the business owners or the employee is trying to prevent reporting records for himself.
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#1585185 - 07/29/11 03:24 PM Re: Can an exempt customer structure deposits? Sing A Little
Princess Romeo Offline

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From conversations I have had with non-bank folks, the common perception appears to be that the CTR will trigger an IRS audit. It's an unfortunate bit of urban lore that probably prompts a lot of the structuring activity rather than people consciously trying to avoid "a reporting requirement under the Bank Secrecy Act."

ETA - although that doesn't relieve the Bank from filing a SAR on the action or attempt.
Last edited by Princess Romeo; 07/29/11 03:25 PM.
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#1585430 - 07/29/11 07:00 PM Re: Can an exempt customer structure deposits? Princess Romeo
WonderWoman Offline
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gone fishin'
I would sit everyone down & have a chat.
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#1585477 - 07/29/11 08:00 PM Re: Can an exempt customer structure deposits? WonderWoman
Lestie G Offline

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The fact that this guy was given the brochure, and then structured deposits anyway sets off lots of warning bells for me.

I would file - after following up with the business owner, etc. as others have advised.
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#1591235 - 08/12/11 02:56 PM Re: Can an exempt customer structure deposits? Lestie G
newbietoo Offline
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"A month ago, we had an employee of a local business (who is actually exempted from CTRs) ask at one of our branches about how much cash he could deposit without triggering the reporting requirements. The teller gave him FinCEN's CTR/Structuring brochure"

I have heard it said before that the brochure can open the way for more questions than it does in answering them because it actually gives examples of structuring.

I'm interested in whether you guys have these brochures readily available in your branches?

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#1591582 - 08/12/11 06:52 PM Re: Can an exempt customer structure deposits? newbietoo
devsfan Offline
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Yes we do and we hand them out in situations such as this. It clearly states that structuring is illegal and if the customer continues to structure, so be it.

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#1591584 - 08/12/11 06:53 PM Re: Can an exempt customer structure deposits? newbietoo
devsfan Offline
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Yes we do and we hand them out in situations such as this. It clearly states that structuring is illegal and if the customer continues to structure, so be it.

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#1592232 - 08/16/11 12:31 AM Re: Can an exempt customer structure deposits? devsfan
huezoslb Offline
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I'll play devil's advocate here. LOL.
So the employee structures the cash for the business but this doesn't change the source of cash, does it? I'm sure during your exemption process, you did your EDD for source, expected activity, etc.
Like Ken stated, you need to chat with the business owner. Worse case you review quarterly and you don't grant the exemption status when it's up for renewal.

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#1592244 - 08/16/11 02:41 AM Re: Can an exempt customer structure deposits? huezoslb
Kathleen O. Blanchard Offline

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So devil's advocate for what? Source of cash has nothing to do with structuring.
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#1592280 - 08/16/11 01:26 PM Re: Can an exempt customer structure deposits? Kathleen O. Blanchard
AuditorK Offline
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Right, I'm comfortable with the source of cash. It was a challenge when reviewing this SAR with our Board. They kept coming back to the source of the cash being legitimate. I hope I finally convinced them that it was the intent to structure that was the problem - not the source of cash.

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