We run into this periodically. Customers take out $50,000 (or consistent large withdrawals) to pay for a home renovation projects because the contractor will only take cash. Are others considering this type of activity suspicious? The source of funds can be validated, but paying for that type of expens in cash seems to bury the transaction. Obviously, we are filing a CTR.

Thanks

Ours usually seem to structure out the renovation funds. We do file quite a few SARS on home remodeling work. And we file SARS on large cash deposits or withdrawals in general if we are not satisfied there is a legitimate reason for them. So yes, we would file on the $50K.

I don't think we'd file in this case given that the source of funds is legitimate and a reasonable explanation for the withdrawal was given. Construction work does seem to operate frequently with cash so the fact that the contractor requires it doesn't seem unusual. I also wouldn't want to file on our customer whose only "crime" is paying the contractor in the manner he requested. That said, we'd probably monitor the account for 3-6 months to make sure that the amounts didn't increase and that there wasn't any other concerning activity.

I suspect the underlying concern is that the contractor is using undocumented workers and/or avoiding payroll taxes by paying workers in cash. That's why there was a huge push awhile back to file SARS on contractors who paid their workers in cash.

In the serious scheme of things, if law enforcement was really that concerned about who contractors are paying for work, they would have a sting operation at every Home Improvement store - any given morning you will see a lot of guys hanging around the parking lot waiting to jump onto a truck for a day job.

IMHO - SARs should really help law enforcement focus on more serious matters - child trafficking, financial crimes, actual drug money laundering, terrorist activity...., crimes where there are actual victims.

[stepping off soap box - continue your day]

Princess, I remember hearing this guidance verbally at BSA Trainings from the law enforcement panels as well as the trainers. Did they ever issue any written guidance on this?

IMHO - SARs should really help law enforcement focus on more serious matters - child trafficking, financial crimes, actual drug money laundering, terrorist activity...., crimes where there are actual victims.


whilst I agree with you the Regulators are not law enforcement and may have an opinion different than you and I. But in this case you have a CTR and knowledge of where the money is coming from and going to. I do not think that we can assume that the contractor is doing something illegal with cash. when it is not illegal to pay a bill in cash.

If I know the customer is undergoing a major renovation and is not paying for it with checks, however he is withdrawing cash in commensurate amounts, I'm simply not suspicious. As noted, it is not illegal to pay for anything in cash. Speculation about why the contractor (not our customer) wants cash is idle.

Whether I would:

a) file or
b) write a memo to file explaining why I was not filing

would depend entirely on my opinion of "defensive filing." Most people have their own theory on that...

It seems like one of the cash withdrawals is so often $9,000 though.

That would be an additional fact not offered here...

Will add my two cents. We have a lot of contractors as customers and one of the issues that subs have is that a check may bounce after they've done the work so they request cash payments. It is not uncommon for our contractors to withdraw cash to pay subs for their part in the construction process. If we see where the funds came from (more often it's loan proceeds) and there are no concerns with that, what they do with the money they take out is not something that we can ever be sure of but if it makes business sense, we're not filing a SAR.