Pawn Shop - $400,000 account. Account opened and customer states "NO" to cashing checks over $1,000 in one day for one customer. Has been in business since 1990 - is not new to pawn shop business nor to banking.
Activity during February AML review finds that he has deposited numerous checks cashed over $1,000 and he structured transactions in February - therefore violating two federal requirements / laws.
1. Owner who completed Due Diligence form at account opening not involved with day-to-day activities and possibly answered "NO" to the check cashing question incorrectly by mistake. However they have been in business for over 20 years and they should know MSB regulatory expectations by now so, do I believe them?
2. They also should know CTR thresholds and structuring - they file CTRs in their business on a regular basis when customers of the businss exceed the threshold. Again, should I trust them?
3. President of that Region says customer will sign agreement not to cash checks over $1,000 nor to structure in the future. However, that would require constant monitoring to insure that they are doing what they promised to do.
Based upon above scenario - do you trust them and spend the extra time to monitor their activity just to give them a second chance or do you explain that the account must be closed - since it should have never been opened to begin with because we have a policy to not open new MSB accounts?
If we keep it open, do we require them to register or let them sign a statement?