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#1991954 - 01/28/15 09:10 PM Structuring - Normal Activity??
CoSmIc GoPhEr Offline
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At what point should structuring in an account be labeled as normal business activity? Is it even possible to label it as such?

We have customers who tell us that the deposits being made are from their store sales and those sales tend to not go over the reporting threshold. If their daily sales are just that, amounts below $10K, we don't want to tell them to hold the money from one day to the next just to increase the amount of the deposit.

The problem that arises is with the SARs being filed. I will need to increase headcount in my BSA Team to write the required SARs when factoring in the initial SARs and the 90 day SAR reviews.

We have considered closing these accounts but is that really necessary? The source of the funds is legitimate. The only problem is the structuring.

Thoughts? Ideas? Comments?
Last edited by CoSmIc GoPhEr; 01/28/15 09:10 PM.
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#1991975 - 01/28/15 09:23 PM Re: Structuring - Normal Activity?? CoSmIc GoPhEr
Local banker Offline
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The BSA Exam Manual has an appendix G specifically on Structuring. It defines it as: The definition of structuring, as set forth in 31 CFR 1010.100 (xx) (which was implemented before a USA PATRIOT Act provision extended the prohibition on structuring to geographic targeting orders and BSA recordkeeping requirements), states, “a person structures a transaction if that person, acting alone, or in conjunction with, or on behalf of, other persons, conducts or attempts to conduct one or more transactions in currency in any amount, at one or more financial institutions, on one or more days, in any manner, for the purpose of evading the [CTR filing requirements].”

I think you have to determine the customer's intent-are they trying to evade filing or is it normal business?

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#1991979 - 01/28/15 09:26 PM Re: Structuring - Normal Activity?? CoSmIc GoPhEr
PrimeTime Offline
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To me, it would depend on the frequency of the deposits, as well as the business that they are in. If you have someone coming in every day with $9,900, it is certainly more difficult to argue that it's structuring, as it's a daily deposit in that amount. Conversely, if you have someone coming in with $9,900 on Thursday and then also the next day Friday, and no deposits for the rest of the week, that would certainly say to me that they're structuring, as they're depositing the same amount that's perceived to be generated in sales from Saturday-Thursday in a single deposit on that Friday.
I had a scenario very close to this, and I looked at the stores hours of operation, took into account any sales/promotions/nature of the business, and made a judgment based on the perceived daily sales. It's important to take into consideration all factors that could potentially be involved in a deposit that gives the appearance of structuring.
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#1991993 - 01/28/15 09:37 PM Re: Structuring - Normal Activity?? CoSmIc GoPhEr
JacF Offline

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Structuring is often indicated by multiple transactions below the reporting threshold, but it isn't defined as such. So while it is correct to review these transactions for possible structuring, assuming that they are structured just because of the dollar range is not correct.

The explanation that your customer provided (these are the daily receipts, deposited the day they are received, and the business typically takes in a range of cash that sits not far below the reporting threshold) is a perfectly valid one.

Unless you have a reason to suspect that the explanation is untruthful, and that the customer is manipulating their daily transactions to avoid filing, I think you have enough to memorialize the explanation and document your reasons for not filing.

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#1992433 - 01/30/15 02:59 PM Re: Structuring - Normal Activity?? CoSmIc GoPhEr
Elwood P. Dowd Offline
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JacFSB said it very well; if the customer's activity is such that it draws your attention, but, on investigation you do not actually suspect structuring, there is no basis for filing a SAR. Just be prepared for the reviewer who cannot distinguish between smoke and steam.
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#1992458 - 01/30/15 04:05 PM Re: Structuring - Normal Activity?? CoSmIc GoPhEr
amlnerd Offline
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I recall a customer from a previous place of employement who used the "daily business activity" reason. After many audits, transaction reviews, and investigations - just when the actiivty of the business was decisioned to be normalized, the owners were arrested for human trafficking. Go figure!

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#1992467 - 01/30/15 04:11 PM Re: Structuring - Normal Activity?? CoSmIc GoPhEr
rlcarey Offline
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Galveston, TX
I have seen banks that use the same mentality. The cash deposits are $8,000 to $9,500 five days a week. When I ask about whether they have considered the customer for structuring, they say, this is just normal business activity for them. They have been making these deposits like this for years. I then ask them: Why then, if they are open 7 days a week is not the Monday or Tuesday (in the case of a holiday) just a little bit more than this?????
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#1992540 - 01/30/15 06:18 PM Re: Structuring - Normal Activity?? Elwood P. Dowd
2old2new Offline
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What if a retail seller of sports vehicles tells you that he will not accept more than $9900 from any customer. Sometimes the $9900 will be a separate deposit and sometimes it will be added with other daily cash and requires a CTR. Yet the $9900 deposit will appear suspicious. He may not be trying to structure with us, but he appears to be avoiding filing from the business filing requirements (such as car dealers). Is this action reportable? Thank you for sharing your opinions.

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#1992556 - 01/30/15 06:48 PM Re: Structuring - Normal Activity?? 2old2new
Elwood P. Dowd Offline
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Based on his own words, he's structuring to avoid filing the Form 8300 and his deposits reflect that? I don't see much of a choice...
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#1992593 - 01/30/15 07:49 PM Re: Structuring - Normal Activity?? CoSmIc GoPhEr
CoSmIc GoPhEr Offline
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Are we there yet?
I appreciate the comments.

In reading each, it seems relatively clear that this is a gray area. We have been told by examiners that structuring is structuring and that activity can not be documented as "normal activity". Our current process is to reach out to our customers to make them aware of the law and just continue to file.

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#1992606 - 01/30/15 08:24 PM Re: Structuring - Normal Activity?? CoSmIc GoPhEr
JacF Offline

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It might be worth getting an understanding of what your examiners define as structuring, and whether or not it matches the actual regulatory definition.

I suspect that someone is not using the word correctly.

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#1992632 - 01/30/15 09:07 PM Re: Structuring - Normal Activity?? CoSmIc GoPhEr
Elwood P. Dowd Offline
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Quote:
We have been told by examiners that structuring is structuring and that activity can not be documented as "normal activity"


That is simply true and no one here has suggested otherwise.

If your customer is altering the amount of cash receipts as they are deposited for the sole purpose of avoiding the filing of a CTR that is "structuring." If your customer's cash receipts and deposits naturally fluctuate between $7,000 & $9,500 on a day to day basis (some of your respondents are skeptical), then that is simply not structuring.

It's about the customer's intent.

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#1992665 - 01/30/15 09:50 PM Re: Structuring - Normal Activity?? CoSmIc GoPhEr
MLR Offline
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We have encountered similar situations with our customers and we have been able to resolve this issue with educating the customer. In many cases they simply don't understand therefore in fear of reporting. Sometimes talking with them while on a site visit allows you a chance to experience the foot traffic there as well as show you care enough about your customer to make a personal appearance. Closing the account is not always the answer. The other question is, have they ever filed a CTR?

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