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#1721211 - 07/18/12 06:02 PM Charitable organization
Overboard Offline
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Overboard
Joined: Aug 2007
Posts: 192
Minnesota
Not sure what I should do with this.
Customer came in and opened a non-profit checking account. He had all the correct paper work. He is getting donations from different organizations but as far as I can tell he is only spending the money on himself. How should I handle this?

Thanks

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#1721230 - 07/18/12 06:32 PM Re: Charitable organization Overboard
AFaquir Offline
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AFaquir
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Well depending on how the money is being deposited and used you could SAR the guy.
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#1722159 - 07/22/12 11:37 AM Re: Charitable organization Overboard
rlcarey Offline
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rlcarey
Joined: Jul 2001
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Galveston, TX
What is "all the proper documentation"?
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#1744324 - 09/26/12 04:18 PM Re: Charitable organization Overboard
sturner Offline
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Joined: May 2010
Posts: 103
Arkansas
I would also like to know the proper documentation as we just had a customer come in wanting to open a benifit type account for her husband who was burned during a chemical fire at work in which people can make donations to. We were not sure what all needed to be obtained for this type account for CIP purposes, etc. and how we should set it up.

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#1745087 - 09/28/12 02:58 AM Re: Charitable organization Overboard
Greg Offline
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Joined: May 2004
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Michigan
For CIP purposes you need a legally existing entity. In Michigan that means it must either be a DBA titled in the owner's name or an entity ( Inc, LLC, etc) registered with the State.

You are under no obligation to monitor what's done with the fund. That being said, if you believe he may be defrauding donors you should file a SAR - assuming the threshold is met.

Caution your tellers about "donation receipts." Unless the entity has a not for profit determination letter from the IRS "donations" are not tax deductible.

True example: a young wife and mother in our community disappeared. Her husband asked our manager to open an education account for their daughters. I refused, the local credit union opened the account. Thousands of dollars were donated - he cashed out and moved out of state. Eventually he was arrested and returned here to stand trial for murder and tax evasion for failure to claim the donations as income. Guilty on both counts. There were multiple stories in the media about the credit union that collected money for a wife killer.

Be charitable but dot your I's and cross your T's.
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#1745115 - 09/28/12 01:10 PM Re: Charitable organization Overboard
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Quote:
as far as I can tell he is only spending the money on himself.


Sometimes people set up what looks like charitable organizations and then simply use the account as their own. Their motivation might simply be to avoid creditors or they may intend to solicit bogus contributions.

Either way, you don't want them. If you're into foreplay you can ask the customer what's up. Instead, you can just give the customer notice that the account is being closed. (I would try to do that before the activity got to the SAR filing threshold.)
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