Wanted to get some thoughts whether to file on a restaurant (that we have an operating account for), but never makes a cash deposits. They receive credit card settlements which are used to cover operating expenses, but we have seen no cash come into the account. We don't believe they have an account elsewhere.

Thanks,

Do they accept cash? If they do then the bank account representative should ask them what they are doing with it. They might be paying their suppliers.

As RlCarey noted, this warrants a question to the customer, since this activity is out of pattern for a restaurant.

As a former BSA Officer, I've filed upon similar activity in the past; and as an auditor/consultant, I've observed other Institutions doing the same. Typically, the underlying concerns include skimming (misappropriation of assets), facilitating the underreporting of taxes, or usage of the cash to pay under the table wages which often are for trafficked workers.

I'm seeing more and more restaurants that won't accept cash.
https://usa.visa.com/visa-everywhere/innovation/cashless-restaurants-nyc.html

In an effort to avoid falling into the perpetual cycle of continuing activity SARs, I would have an account officer reach out to the customer to ask the questions necessary to try to resolve this. As a first step, you could go to the restaurant and attempt to pay in cash to see if they accept it. I had a similar issue and found that the customer actually did have another account at a bank with a branch that was located in very close proximity to them - they felt that it was safer for the employees to drop the cash at that location rather than transporting it to our nearest location.

Communication with the customer is the key here. I have often fallen into that trap of trying to figure things like this out without reaching out to the customer or asking the questions that could quickly explain the situation. It is easy to come up with a lot of nefarious scenarios that would paint the customer as a drug king pin or a human trafficker; however, there is likely a more reasonable (though certainly less entertaining) explanation. It's not to say that the explanation will be acceptable but at least your not speculating at that point.

Thanks, I do appreciate all of the responses. I will reach out to the branch manager and see what they can find out.

This question comes up from time to time, and I honestly do not understand how a SAR can even be considered when the issue is the absence of activity. The purpose of a SAR is to report activity take takes place at or through the bank. You don't have the activity, so you have nothing to report.

That said, good CDD certainly should compel your bank to follow the suggestions above to reach out to the customer and gain a better understanding of their business (and their money). But you're doing this for the purpose of knowing your customer- not for your SAR narrative.

Look to see if the owner's personal account is at your bank. Have lunch at the restaurant. Pay in cash. Then, ask the owner where the cash was deposited.

Asking questions is less labor intensive than filing the first in a never ending string of SARs.

Restaurateurs, rocket scientists that they are, often deposit their cash receipts into their personal accounts, bypassing their accountant and hopefully their income tax return. If your customer gets audited, the IRS will look at the restaurant's receipts, note the absence of cash, and summon the individual's personal account records as well.

I love that when I went to look at the page David recommended, it had a link to an article on the connection between driverless cars and cashless payments. The link led to an "Oops!" page ("404" error message) with a graphic of a tow truck.

The concept of no cash payments at a restaurant has a legitimate purpose and could catch on, even outside major cities.