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#2016118 - 05/26/15 10:51 PM Interesting Structuring Case -
Retread Offline
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Retread
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Thought some of you might be interested in this article, particularly since it contains court documents.

Forfeiture Action
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#2016119 - 05/26/15 11:22 PM Re: Interesting Structuring Case - Retread
el guapo Offline
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I find it hard to believe that they were completely unaware that structuring was not allowed and they were only keeping transactions (intentionally) under $10,000 out of a belief that "insurance" doesn't cover transactions greater than that amount.

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#2016127 - 05/27/15 02:41 AM Re: Interesting Structuring Case - Retread
JacF Offline

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No doubt they were fully aware of structuring laws.

Nevertheless, asset forfeiture, which bypasses due process, is immoral. This never should have happened.

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#2016131 - 05/27/15 10:31 AM Re: Interesting Structuring Case - Retread
edAudit Offline
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There also appears to be some issues with the reporting.

The Couple opened the account in NY as a d/b/a with Joint signatures which is not allowed in NY it could have a POA.

How were they able to operate a NC company with a NY D/B/A?

Why would they think that it is the banks responsibility to warn them about the transactions (although most banks do)if they are not even authorized to do business in NC?



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#2016132 - 05/27/15 10:34 AM Re: Interesting Structuring Case - edAudit
Elwood P. Dowd Offline
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Search The Institute for Justice web site for the word "forfeiture." They have handled lots of these cases (including this one).

My personal favorite includes a video.

The issue should be on the wane due to changes in IRS and DOJ methodologies referenced in the article. Nevertheless, continuing to roll out the press releases is undoubtedly still good for the organization's coffers.
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#2016200 - 05/27/15 02:59 PM Re: Interesting Structuring Case - Retread
John Burnett Offline
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I put part of the blame for "Lady's" woes on her bank, which must have dropped the SAR dime on her based on her cash deposit patterns. I suspect that the bank failed to do any kind of digging to understand the business and its cashflow. If they had, the patterns of cash deposits could have made sense to them, and a SAR would likely not have been filed. No SAR, no investigation. No investigation, no forfeiture.

Bankers that make the leap to file SARs without an effort to understand a customer's cash business should be forced to watch "Lady's" video and ponder their short-cutting of the process. They simply have to get over their reluctance to ask questions.
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#2016216 - 05/27/15 03:38 PM Re: Interesting Structuring Case - Retread
JacF Offline

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Originally Posted By John Burnett
Bankers that make the leap to file SARs without an effort to understand a customer's cash business should be forced to watch "Lady's" video and ponder their short-cutting of the process. They simply have to get over their reluctance to ask questions.


I agree completely.

But I think part of the problem is the shift in our thinking that we produce SARs for the benfit of regulators instead of as a useful tool for law enforcement. The result is an increase in reporting of transactions that have nothing to do with any suspected criminal activity either because we don't try to understand the customer's business, we don't accept whatever answer the customer provides as long as the transacitons fit our "known" pattern of structuring, or because we aren't confident in our ability to justify our reasearch and non-filing to our examiners on the cases we have investigated.

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#2016244 - 05/27/15 04:23 PM Re: Interesting Structuring Case - John Burnett
edAudit Offline
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Originally Posted By John Burnett
I put part of the blame for "Lady's" woes on her bank, which must have dropped the SAR dime on her based on her cash deposit patterns. I suspect that the bank failed to do any kind of digging to understand the business and its cashflow. If they had, the patterns of cash deposits could have made sense to them, and a SAR would likely not have been filed. No SAR, no investigation. No investigation, no forfeiture.

Bankers that make the leap to file SARs without an effort to understand a customer's cash business should be forced to watch "Lady's" video and ponder their short-cutting of the process. They simply have to get over their reluctance to ask questions.


The part you can put on the bank is opening an account for a d/b/a that is not authorized in the state.

If they bank (IDNK if) has any BSA deficiencies any examiner would have a field day if they did not file good excuse of not(just a fact of life).

There are just too may transaction in the $9,000. range over 1 or 2 days. It is supposed to be a suspicious transaction report not a guilty transaction report and LE should have investigated it.
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#2016392 - 05/27/15 08:22 PM Re: Interesting Structuring Case - JacF
John Burnett Offline
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Originally Posted By JacFSB
Originally Posted By John Burnett
Bankers that make the leap to file SARs without an effort to understand a customer's cash business should be forced to watch "Lady's" video and ponder their short-cutting of the process. They simply have to get over their reluctance to ask questions.


I agree completely.

But I think part of the problem is the shift in our thinking that we produce SARs for the benfit of regulators instead of as a useful tool for law enforcement. The result is an increase in reporting of transactions that have nothing to do with any suspected criminal activity either because we don't try to understand the customer's business, we don't accept whatever answer the customer provides as long as the transacitons fit our "known" pattern of structuring, or because we aren't confident in our ability to justify our reasearch and non-filing to our examiners on the cases we have investigated.


Total agreement from here. Perhaps it's the examiners who need to see the results of their efforts in "Lady's" video and other ridiculous outcomes of "defensive" SAR filings.
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#2016410 - 05/27/15 08:45 PM Re: Interesting Structuring Case - John Burnett
Princess Romeo Offline

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Originally Posted By John Burnett


Total agreement from here. Perhaps it's the examiners who need to see the results of their efforts in "Lady's" video and other ridiculous outcomes of "defensive" SAR filings.


I doubt they would care.
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#2016422 - 05/27/15 09:05 PM Re: Interesting Structuring Case - Princess Romeo
edAudit Offline
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Originally Posted By Princess Romeo
Originally Posted By John Burnett


Total agreement from here. Perhaps it's the examiners who need to see the results of their efforts in "Lady's" video and other ridiculous outcomes of "defensive" SAR filings.


I doubt they would care.


agreed
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#2016470 - 05/28/15 11:20 AM Re: Interesting Structuring Case - edAudit
Elwood P. Dowd Offline
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It's interesting to see a group of bankers watch the "Mrs. Lady" video. At some point they all realize that their compliance with the law may instigate an egregious asset forfeiture case.

With no indictment, there's no public rendition of Mrs. Lady's deposits, but my understanding is that her cash deposits did not hover near $10,000. They were pretty consistently in the $4K to $8K range. The problem was that the restaurant is in a resort area and while other businesses' deposits shot up on Memorial Day and Independence Day, hers stayed between $4K and $8K. (In one story she was quoted as saying that her mother told her that depositing more than $10K was an inconvenience for the bank so she made it a point not to.)

In a strikingly similar situation, Magic City once gave me the example of the Irish pub (already a structuring suspect) whose cash deposits did not spike on or after St. Patrick's day. That's just not credible even if it's a lousy Irish pub.

The problem here is not that Mrs. Lady's bank probably filed a SAR for structuring. It is that, unfettered, law enforcement occasionally exhibits the manners and conscience of a schoolyard bully.
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#2016574 - 05/28/15 03:19 PM Re: Interesting Structuring Case - Retread
NU Rhules Offline
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The problem is not the banking industry, though I submit that we could do a better job of educating customers with the use of FinCEN's Flyer on structuring. After all, it is public law and the reason we deal with innocents getting filed on is partly because of ignorance of the law.
Couple that with what Ken says. I agree - IMHO the problem is sits squarely on the shoulders of our Government and it's unwillingness to act responsibly - both in the rulemaking/law writing, giving banks a pile of pooh to deal with, and in Law Enforcement's heavy handedness. Write your Congressmen and Senators and tell them to call the Treasury and IRS to come out and do some 'splaining at a Congressional oversight committee hearing. That's the only way things will change. If nobody shines on a light on injustice, it won't get fixed.

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#2017625 - 06/02/15 04:28 PM Re: Interesting Structuring Case - NU Rhules
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Exactly, spot on! For too long bankers have had to "CYA" when dealing with BSA/AML all the while its the "law" that stings you if you fail to comply. Its the law that's been at the heart of all our anguish and worry. Changes needed for too long now a must!

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