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#476291 - 12/29/05 09:23 PM CTR Multiple Checks Cashed
otis123 Offline
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Joined: Jan 2005
Posts: 20
One of our customers sends the office secretary to the bank each payday with all of the individual payroll checks, all endorsed, to be cashed. She then cashes them and (hopefully) takes all of the cash back to the office and it is appropriately distributed to the individuals. From a procedural standpoint, I have a problem with this, but the manager doesn't. But, from a BSA standpoint, I have a question. On whom is the CTR filed? The company with the secretary's information filled out in Section B?OR should there be a CTR on each transaction over $10,000..Section A being payee and Section B being secretary..each other check logged if appropriate OR customer is Section A and Section B is checked as Multiple Transactions? OR Payroll exemption - Phase II?

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#476292 - 12/29/05 09:36 PM Re: CTR Multiple Checks Cashed
devsfan Offline
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Joined: Jun 2004
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NYC
In my view, since the secretary is the person walking out of the branch with the cash and you have no way of knowing the ultimate disposition of the money, she should be shown in Part 1 Section A with box e checked in Section B. I would show the account number of the business account in box 35. You really cannot identify all of the payees since you do not have any of their information and they are not the ones conducting the transaction.

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#476293 - 12/30/05 06:48 PM Re: CTR Multiple Checks Cashed
BankerKB Offline
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Wouldn't you have to list the employees on the CTR since the transaction is made payable to them and they would be benefiting from this. I don't really see how you could leave them off if the check is made payable to John Doe pay to the order of Jane Doe (secretary).

Section A would be John Doe and Section B would be the secretary who is conducting the transactions.
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#476294 - 12/30/05 09:48 PM Re: CTR Multiple Checks Cashed
huntik Offline
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Nebraska
If John Doe signed the check over to Jane Doe, its Jane's check now, John has nothing to do with it.
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#476295 - 12/31/05 06:00 AM Re: CTR Multiple Checks Cashed
rlcarey Online
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Galveston, TX
Also, just remember that if any of these checks add up to more than $1,000 to one person, Jane is an MSB. Also - it's a great way to embezzle from an employer by creating fake employees and using this as a cover story.
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#476296 - 01/03/06 02:26 PM Re: CTR Multiple Checks Cashed
John Burnett Offline
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Cape Cod
If Jane is cashing each of the checks separately and putting it into individual envelopes, there's strong evidence that she's a messenger, and the check payees are the beneficiaries of these transactions. That means you have one CTR with one Section B entry (Jane) and multiple Section A entries (one for each payee). This, of course, presents horrific logistic problems, since you probably don't have ID info on any of the payees.

If Jane presents the checks as one transaction, and you give her cash for the total, with no breakdown per payee, then I think Jane or the company is the beneficiary, and Jane is still the transactor.

As for any thought of exempting the issuer of the checks under the payroll exemption, don't even think about it. That's only available to employers who pay their employees in cash (no check issued).

For some pretty obvious reasons, this sort of transaction is a royal pain. If the employer insists on having Jane act as messenger on payday, you should insist that the employer gather and provide the address and ID information on all the payees. Maybe you even get the employer to fill in all the Section A and B items on the CTR so it's ready when Jane comes to the bank.
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#476297 - 01/03/06 03:46 PM Re: CTR Multiple Checks Cashed
Elwood P. Dowd Offline
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Next to Harvey
Jane's conducting the transaction. The choices as to who she might be conducting it for are:
1) herself,
2) the payees on the checks and
3) the company.

I vote for number 2 and would not hinge the decision on whether she segregated the cash into individual envelopes for each payee. That's likely to be the least popular choice with the person who has to list each payee on the CTR, but it's consistent with what the bank actually believes is happening and the language in 89-5 that says the bank is supposed to know who is actually benefitting from the transaction:

Because the BSA requires financial institutions to file complete and accurate CTR's, it is the financial institution's responsibility to ascertain the real party in interest. 31 U.S.C. 5313. One way that a financial institution can obtain information about the identity of the person on whose behalf the transaction is being conducted is to ask the person conducting the transaction whether he is acting for himself or on behalf of another person.

Ask her what she's going to do with the money. I don't think she will say she's going to give it to her employer and I don't think she will say she's going to keep it.

If you don't want to fill out CTRs listing all the individual payees tell them you will be glad to open individual accounts for their personnel so they can cash their own checks.
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#476298 - 01/03/06 04:35 PM Re: CTR Multiple Checks Cashed
John Burnett Offline
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Cape Cod
Quote:


If you don't want to fill out CTRs listing all the individual payees tell them you will be glad to open individual accounts for their personnel so they can cash their own checks.




Better yet -- Encourage the company to start using direct deposit. Sending a messenger to cash paychecks is so 20th century!
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
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