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#508722 - 03/06/06 09:14 PM MSB and possible kite
nemsi Offline
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Joined: Nov 2005
Posts: 383
I remember seeing a post fairly recently that touched on this topic but i can not locate it using the search option. During a review of account activity i noticed numerous money orders made payable to my MSB customer, a C-store, and deposited into the C-store's dda (my MSB customer is also an agent of another MSB authorized to issue MO). MO purchase date and date of deposit are the same. any ideas on what's going on? Doesn't appear to be structuring, cash-in amount would not warrant structuring. Low balance account makes me think that it's a kiting suspect. Any thoughts on what may be going on would be appreciated. Thanks for any suggestions.

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#508723 - 03/06/06 09:30 PM Re: MSB and possible kite
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,898
Galveston, TX
When does the issuing agent debit the money out of the DDA account for the purschase of the money orders? If there is a one or two day delay - there is your float for the kite.
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#508724 - 03/07/06 06:34 PM Re: MSB and possible kite
nemsi Offline
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Joined: Nov 2005
Posts: 383
I have not been able to find a debit match on the $ amounts. Maybe the funds are being wired in?. What is so strange about the transactions is that numerous sequentially numbered MO for $1000 are issued, by my customer as the agent, to my customer. Within the hour, a deposit which includes the money orders, is made into my customers account.

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#508725 - 03/07/06 07:31 PM Re: MSB and possible kite
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,898
Galveston, TX
You don't require your MSB customer to conduct all their banking with you??? How do you monitor the amount of money orders they are selling to see if cash flows are reasonable?? You need to pay these guys an on site visit and ask them point blank - of what legitimate business purpose do these transactions serve.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#508726 - 03/07/06 09:16 PM Re: MSB and possible kite
nemsi Offline
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Joined: Nov 2005
Posts: 383
Thanks RLCarey for taking time to respond to my question. I think you recommendation is exactly what needs to happen.

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#508727 - 03/07/06 10:47 PM Re: MSB and possible kite
ABrown Offline
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Joined: May 2001
Posts: 279
Texas
I had this exact situation happen to us. They were using the money orders to cover the float time between when they deposited the money and when the MO company debited the account for the MO's sold. I had their officer contact them with a couple of pointed questions, and that activity has ground to a halt; however, I did file a SAR on the activity due to the aggreagate dollar amount.

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#508728 - 03/07/06 11:28 PM Re: MSB and possible kite
BrendaC Offline
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BrendaC
Joined: Sep 2001
Posts: 6,029
Sweet Home AL
We require some type of collateral for our MSB customers particularly check cashers. The amount varies based on the type of services they provide and velocity in accounts. They can either put up a CD or a letter of credit.
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