The following indicators are for your consideration if you are an institution that opens accounts and holds deposits on behalf of individuals or companies. This includes banks, credit unions, caisses populaires, trust and loan companies and agents of the Crown that accept deposit liabilities.
Personal Transactions
Client appears to have accounts with several financial institutions in one geographical area.
Client has no employment history but makes frequent large transactions or maintains a large account balance.
Client makes one or more cash deposits to general account of foreign correspondent bank (i.e., flow-through account).
Client runs large credit card balances.
Client visits the safety deposit box area immediately before making cash deposits.
Client wishes to have credit and debit cards sent to international or domestic destinations other than his or her address.
Client has numerous accounts and deposits cash into each of them with the total credits being a large amount.
Client deposits large endorsed cheques in the name of a third-party.
Client frequently makes deposits to the account of another person who is not an employer or family member.
Client frequently exchanges currencies.
Client frequently makes automatic banking machine deposits just below the reporting threshold.
Client’s access to the safety deposit facilities increases substantially or is unusual in light of their past usage.
Many unrelated individuals make payments to one account without rational explanation.
Third parties make cash payments or deposit cheques to a client’s credit card.
Client has frequent deposits identified as proceeds of asset sales but assets cannot be substantiated.
Client acquires significant assets and liquidates them quickly with no explanation.
Client acquires significant assets and encumbers them with security interests that don’t make economic sense.
Corporate and Business Transactions
Some businesses may be susceptible to the mixing of illicit funds with legitimate income. This is a very common method of money laundering. These businesses include those that conduct the majority of their business in cash, such as restaurants, bars and vending machine companies. On opening accounts with the various businesses in your area, you would likely be aware of those that are mainly cash based. Unusual or unexplained increases in cash deposits made by those entities may be indicative of suspicious activity.
Accounts are used to receive or disburse large sums but show virtually no normal business-related activities, such as the payment of payrolls, invoices, etc.
Accounts have a large volume of deposits in bank drafts, cashier’s cheques, money orders or electronic funds transfers, which is inconsistent with the client’s business.
Accounts have deposits in combinations of monetary instruments that are atypical of legitimate business activity (for example, deposits that include a mix of business, payroll, and social security cheques).
Accounts have deposits in combinations of cash and monetary instruments not normally associated with business activity.
Business does not want to provide complete information regarding its activities.
Financial statements of the business differ noticeably from those of similar businesses.
Representatives of the business avoid contact with the branch as much as possible, even when it would be more convenient for them.
Deposits to or withdrawals from a corporate account are primarily in cash rather than in the form of debit and credit normally associated with commercial operations.
Client maintains a number of trustee or client accounts that are not consistent with that type of business or not in keeping with normal industry practices.
Client operates a retail business providing cheque-cashing services but does not make large draws of cash against cheques deposited.
Client pays in cash or deposits cash to cover bank drafts, money transfers or other negotiable and marketable money instruments.
Client purchases cashier’s cheques and money orders with large amounts of cash.
Client deposits large amounts of currency wrapped in currency straps.
Client makes a large volume of seemingly unrelated deposits to several accounts and frequently transfers a major portion of the balances to a single account at the same bank or elsewhere.
Client makes a large volume of cash deposits from a business that is not normally cash-intensive.
Client makes large cash withdrawals from a business account not normally associated with cash transactions.
Client consistently makes immediate large withdrawals from an account that has just received a large and unexpected credit from abroad.
Client makes a single and substantial cash deposit composed of many large bills.
Small, one-location business makes deposits on the same day at different branches across a broad geographic area that does not appear practical for the business.
There is a substantial increase in deposits of cash or negotiable instruments by a company offering professional advisory services, especially if the deposits are promptly transferred.
There is a sudden change in cash transactions or patterns.
Client wishes to have credit and debit cards sent to international or domestic destinations other than his or her place of business.
There is a marked increase in transaction volume on an account with significant changes in an account balance that is inconsistent with or not in keeping with normal business practices of the client's account.
Asset acquisition is accompanied by security arrangements that are not consistent with normal practice.
Unexplained transactions are repeated between personal and commercial accounts.
Activity is inconsistent with stated business.
Account has close connections with other business accounts without any apparent reason for the connection.
Activity suggests that transactions may offend securities regulations or the business prospectus is not within the requirements.
A large number of incoming and outgoing wire transfers take place for which there appears to be no logical business or other economic purpose, particularly when this is through or from locations of concern, such as countries known or suspected to facilitate money laundering activities.
Source : FINTRAC
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