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#1981279 - 12/05/14 04:16 PM Person on whose behalf (CTR question)
YaYa Offline
Junior Member
Joined: May 2008
Posts: 48
Ohio
We have one MSB. It is a tavern owned by a husband & wife. I will use the name Mary & Jim. They cash checks over $1,000 for their clients.

Mary cashes a check once a week for usually over $10,000 so the tavern has the funds to cash checks for their clients at the tavern.

The check, drawn on the tavern account with us, that Mary cashes is made payable to her (Mary) because it is our bankís procedure not to cash a check made payable to a business. But the funds from the check are used for the business (Tavern). Therefore when we file a CTR, the Person on whose behalf the transaction is conducted section shows the tavern. The Person conducting transaction for another section shows Mary.

We are wondering if this is the correct way to file the CTR? Or should Maryís name be in the Person on whose behalf the transaction is conducted section since the check being cashed is made payable to her? I hate to do this since I know she (Mary) is not benefiting from the funds. The tavern is the one benefiting.

What do you think?

If you think the CTR should not reflect the tavern's name for Person on whose behalf the transaction is conducted section, is there any other way I could handle the transaction so I would not need to show Mary as the Person on whose behalf the transaction is conducted? Should I request the check that Mary is cashing be made payable to the business (tavern) and have Mary endorse it? This would be an exception to our bank procedure since we donít cash checks made payable to a business.

Thank you!

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#1981284 - 12/05/14 04:28 PM Re: Person on whose behalf (CTR question) YaYa
Midwest BSA Offline
Member
Joined: Sep 2014
Posts: 54
If Mary is listed as a signer on the account and not an owner/signer, we would put it through as Mary on behalf of the tavern. If she's an owner/signer, we'd put it through as Mary on her own behalf.

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#1981290 - 12/05/14 04:41 PM Re: Person on whose behalf (CTR question) YaYa
CFR31 Ch x Offline
Junior Member
Joined: Dec 2014
Posts: 31
It all comes down to the knowledge of the financial institution.

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#1981296 - 12/05/14 04:50 PM Re: Person on whose behalf (CTR question) YaYa
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,684
Cape Cod
How is the tavern owned legally? Is it a corporation, LLC or other entity, or is it a partnership? If it's in a state that allows spouses to jointly own a "sole proprietorship" (such as Oklahoma), is it owned by Mary and Jim?

If it's entity or partnership, I'd file the CTR to report the transaction conducted by Mary on behalf of the business.

If it's a sole proprietorship, I'd file it with Mary conducting on her own behalf (box 2a) and on behalf of Jim (2c).
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
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#1981314 - 12/05/14 05:23 PM Re: Person on whose behalf (CTR question) YaYa
YaYa Offline
Junior Member
Joined: May 2008
Posts: 48
Ohio
The tavern is a LLC but owned by Mary & Jim and we are in the State of Ohio. Mary & Jim are the only signors on the account.

During our OCC exam this year, the Examiners did not find any issues with our CTRs which would include the ones filed for the tavern/Mary. The question whether they are filed correctly came from an internal auditor during a recent internal BSA audit.

Since I know the funds are used by the tavern and I know what they are used for (I review the tavern account every month), am I ok in leaving the tavern as the Person on whose behalf the transaction is conducted section and Mary in the Person conducting the tranaction for another section?

Thank you so much for your assistance!
Last edited by YaYa; 12/05/14 05:32 PM.
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#1981327 - 12/05/14 05:39 PM Re: Person on whose behalf (CTR question) YaYa
devsfan Offline
Diamond Poster
Joined: Jun 2004
Posts: 1,927
NYC
You are preparing the CTRs correctly. The LLC is box 2c and Mary is 2b.
Last edited by devsfan; 12/05/14 05:44 PM.
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#1981346 - 12/05/14 06:34 PM Re: Person on whose behalf (CTR question) YaYa
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,684
Cape Cod
Thanks for clearing up the question of the business ownership, YaYa. I'll second devsfan's response. You've got it right. Don't let the auditor muddy the water on you.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

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#1981512 - 12/08/14 01:24 PM Re: Person on whose behalf (CTR question) YaYa
YaYa Offline
Junior Member
Joined: May 2008
Posts: 48
Ohio
Thank you all for your responses. It is so nice to be able to depend on other's compliance expertise when we need a helping hand.

I wanted to let everyone know that I contacted FinCen to add additional clarification (validation). They confirmed we are completing the CTRs appropriately because we have knowledge as to whom (the tavern) is benefiting from the funds therefore the tavern is the person on whose behalf the transaction is conducted and Mary is the person conducting the transaction on behalf of another. They further stated it does not matter what our internal procedure is when completing a completing a CTR. They want to know who is benefiting from the money.

I hope this helps others. Thanks again...........

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