Thread Options
#1661342 - 02/06/12 10:32 PM CTR On Cashed Payroll Checks
crazed Offline
Joined: Dec 2005
Posts: 61
Business makes checks payable to their employees. Business owner comes into the bank with all payroll checks that have been endorsed over to him. He cashes all the checks which are over $10,000. How does the CTR need to be completed? Does it matter if the business is shown as the beneficiary with the owner being the conductor, or should the owner be both the beneficiary and conductor?

Return to Top
#1661403 - 02/07/12 03:57 AM Re: CTR On Cashed Payroll Checks crazed
rlcarey Online
10K Club
Joined: Jul 2001
Posts: 78,643
Galveston, TX
Technically, the beneficiaries are the individuals, if he is cashing the checks for the employees. You need them all in Section A.

This is usually a sign of something a little more devious going on.
The opinions expressed here should not be construed to be those of my employer:

Return to Top
#1661440 - 02/07/12 01:36 PM Re: CTR On Cashed Payroll Checks crazed
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
I agree with rlcarey, one section A for each payee. (That should put an end to your bank allowing someone to do this.)

Not to be too controlling, I suggest you call the FinCEN Helpline and ask them. I am told they quote the Byzantine "fishing boat ruling" and give a different answer.
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

Return to Top
#1661470 - 02/07/12 02:18 PM Re: CTR On Cashed Payroll Checks crazed
BSABecky Offline
100 Club
Joined: Mar 2011
Posts: 126
Seymour, IN USA
I've spoken with the FinCEN hotline and was told that since the checks were endorsed over to the business owner, HE was the only person to be listed as the beneficiary (and transactor). If I wrote a $12,000 check to Bob Smith and he in turn endorsed it over and gave it to me to cash at my institution for him, there is no proof that it really is for Bob. I'm signing for the cash, therefore I am the beneficiary as far as the CTR is concerned.

I do agree, however, that this is a bit odd. We have several small business customers that do this for their two or three employees and it never amounts to more than a couple thousand dollars, so it's never been a real issue for us.
My opinions do not necessarily reflect those of my employer.

Return to Top
#1661499 - 02/07/12 02:58 PM Re: CTR On Cashed Payroll Checks crazed
BrendaC Offline
Power Poster
Joined: Sep 2001
Posts: 6,029
Sweet Home AL
This is a red flag for human trafficking and other suspicious activities. Have you conducted and documented a review of the customer? If an auditor/examiner picks up on this activity, I suspect they will want to see how you handled and whether you recognized as a red flag.
Life without Jesus is like an unsharpened pencil - it has no point.

Return to Top
#1709991 - 06/13/12 07:30 PM Re: CTR On Cashed Payroll Checks crazed
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,557
Cape Cod
It is also one symptom of a phony or padded payroll that could be used to drain a company's assets.

Brenda and I are not saying your customers are crooks. We are saying that you need to recognize the clue and figure out how much you know about the customer. Is it reasonable that they are handling their payroll checks this way? How far away is the business that its employees can't cash their own checks? Can you see any evidence that employment taxes are being debited out of the company's accounts? Does anyone at the bank actually know anything about the company and its location (a loan or marketing officer who has visited the plant, for example)?

In today's environment with direct deposit and banks almost everywhere, sending a company runner to the bank to cash co-worker paychecks is becoming less common.

We're just sayin'.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top

Moderator:  Andy_Z