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#1934240 - 06/19/14 09:00 PM this looks like suspicious activity - Cashiers Cks
jmysray1 Offline
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Joined: Dec 2008
Posts: 22
missouri
I have just been made aware that we have a customer that purchased a large cashiers check payable to herself from herself, and every month or so she comes in, says she did not use it for what it was intended for and request cash usually $500.00 and request a new cashiers check. It did not show up on my monitoring because they did not view as cash, but it sure seems fishy to me, what are your thoughts

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#1934247 - 06/19/14 09:20 PM Re: this looks like suspicious activity jmysray1
Sunshine Lady Offline
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Sunshine Lady
Joined: Apr 2014
Posts: 673
It does sound suspicious and it also sounds like that is her monthly mad money and she is using it as her monthly allowance instead of using a checking account. Without knowing what the original amount of the cashier's check was, if it was over the 10K a CTR might have already been done. It comes down to if the bank feels that she is doing something illegal and a SAR needs to be filed, but $500.00 monthly and getting a new cashier's check just sounds like she wants to bank to be her bookkeeper.
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#1934250 - 06/19/14 09:27 PM Re: this looks like suspicious activity jmysray1
Doug Hendrickson Offline
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Doug Hendrickson
Joined: Oct 2009
Posts: 3,927
I agree with Sun Shine Lady. We've had a couple of customers in the past who had this same routine. They did not want their relatives knowing they had the money, so they did not deposit it into their account and felt that at least as a cashier's check it was 'protected'. Depending on the size of and source of the original funding for the cashier's check it may not be suspicious.
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#1934258 - 06/19/14 10:30 PM this looks like suspicious activity - Cashiers Cks jmysray1
Mike Mixon Offline
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Mike Mixon
Joined: Oct 2013
Posts: 22
Kingman, AZ
We have had several customers who buy cashier's checks to and from themselves. Several have stated that they were trying to avoid levies, and one said he was going to file bankruptcy and didn't want the courts going after his money. Another reason might be someone who doesn't want their social security payment reduced because of a high bank balance. I always look at these with a lot of skepticism unless I see a valid reason. After all, a SAR isn't reporting a crime, it's reporting a suspicion.

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#1934267 - 06/20/14 10:57 AM Re: this looks like suspicious activity - Cashiers Cks jmysray1
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
All prior discussions on this topic (there have been several) eventually reached two conclusions:

* This is a low tech method for hiding money from creditors or spouses embroiled in a divorce. However, neither activity is criminal in nature and SARs are about reporting suspected criminal activity. If you know that an individual is using this method to hide assets to falsify a needs based application for some form of government benefits, then you might consider a SAR filing based on those very specific circumstances.

* Allowing people to purchase a cashiers check with another cashiers check can be cured by a policy simply prohibiting the practice. If the customer presents an on-us official check, just tell them they can deposit it or they can cash it, but they cannot use it to purchase another official check. They are your checks, the only applicable rules regarding their sale are yours.

P.S. I know of one examiner who "directs" banks that SAR filing is always required in these situations as well as those where a customer has simply held a large cashiers check for an extended period of time, describing it as money laundering or income tax evasion. He's appallingly wrong, but if he's your examiner it's probably smarter to go along than to get crosswise with his employer. Smarter still would be: Institute policies that eliminate the issue.
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#1934359 - 06/20/14 02:49 PM Re: this looks like suspicious activity - Cashiers Cks jmysray1
charlied Offline
Member
Joined: Oct 2009
Posts: 94
TN
We have had that one examiner. And if you let this practice continue for long and then get that examiner, be prepared for a LOT of work. Last year, we had to trace cashier check exchanges all the way back to 2008 when the customer first began exchanging them. It was the exact situation you describe, jmysray1. Besides eliminating the practice of exchanging official checks for official checks, I would also suggest you look to see if you are charging this customer for each check purchase. I would not be surprised to find that they are waiving the fee.

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#1935517 - 06/25/14 05:12 PM Re: this looks like suspicious activity - Cashiers Cks jmysray1
TryingtoComply Offline
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Joined: Apr 2013
Posts: 2,199
The West
I've had examiners tell me that this falls under the umbrella of "Transaction with no apparent economic, busines or lawful purpose."

And I've had tellers tell me that customers told them that they keep the funds in cashier's checks to conceal it from the IRS.

Whether you file or not would be based on what you know. There is no harm in asking the customer what the heck they are doing.
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