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#524607 - 03/30/06 04:30 PM CTR Filing
Floridian Offline
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Joined: Jul 2004
Posts: 56
A business owner and customer came into the bank with payroll checks for his employees. Each individual had signed their check. The branch proceeded to cash these checks and give the owner the cash for distribution to their employees. Over $10,000. I know that we have to file individual CTR's for each transaction, the business has been contacted to supply information on the employees. However, we are told that we will not be able to get all the information as some of the employees may not have acceptable ID's. We have all the information on the Owner of the business who cashed the checks. What do we do now? Do we send in the incomplete CTR's? (There are almost 100 of them)HELP
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#524608 - 03/30/06 05:17 PM Re: CTR Filing
MagicCity Offline

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MagicCity
Joined: Apr 2003
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Fort Lauderdale, Florida
I would file only on the person who walked out of your bank with over $10M in cash.

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#524609 - 03/30/06 07:08 PM Re: CTR Filing
Floridian Offline
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How can I do that when the transaction was performed by one person on behalf of many others?
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#524610 - 03/30/06 07:43 PM Re: CTR Filing
tcgcompliance Offline
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Joined: Mar 2006
Posts: 32
CA, USA
I am not convinced you need to file a CTR at all.

Whilst it is true that you handed over more than $10,000 to an individual you did so on the basis of his acting as an agent for multiple parties.

Had he brought in each individual and had you hand the cash to each no CTR would be needed (but your branch would have a very long queue).

I'm presuming that if you didn't have reason to believe that the client was acting as an agent for these multiple persons then you would have refused to cash the checks endorsed by you know not whom? Since you did have a reason to believe he was acting for others and not in his own right this is not one transaction but multiple transactions and that being so no CTR is required?
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#524611 - 03/30/06 09:20 PM Re: CTR Filing
ECMC7 Offline
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Joined: Sep 2005
Posts: 46
I agree with MagicCity. You would only need to file on the person that left the premises with over $10,000. Other than that, there is no "knowledge" of to whom the cash is going, it's all hearsay.

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#524612 - 03/30/06 09:25 PM Re: CTR Filing
Floridian Offline
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Joined: Jul 2004
Posts: 56
That is what I would love to do, however, the checks were made to each individual employee. Everything scenario that I find that addresses a person cashing other peoples checks (runner) says that CTR's are required.How do I explain that away during an exam.
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#524613 - 03/30/06 09:39 PM Re: CTR Filing
BrendaC Offline
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BrendaC
Joined: Sep 2001
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Sweet Home AL
From FinCEN FAQ
"Question 13b: Would a CTR be required if several individual employees endorsed their respective payroll checks (all individual payroll checks are under $10,000 but combined they aggregate to an amount that exceeds $10,000), and made the checks payable to one employee who, in turn, cashed them at a financial institution for the purpose of distributing the proceeds back to the individual employees?

Answer 13b: A CTR would be required in this instance because one person is receiving more than $10,000 in currency.(10/2001)"

Since it is clear that the ultimate beneficiaries of the cashed checks are the check payees, the payees are the individuals to be listed in Part 1: Section A - persons on whose behalf the transaction is conducted. We have had this situation before and we worked directly with FinCEN to properly complete the CTR - it was long and UGLY! We haven't had it again.
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#524614 - 03/30/06 09:50 PM Re: CTR Filing
Sunshine_101 Offline
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Quote:

Since it is clear that the ultimate beneficiaries of the cashed checks are the check payees, the payees are the individuals to be listed in Part 1: Section A - persons on whose behalf the transaction is conducted. We have had this situation before and we worked directly with FinCEN to properly complete the CTR - it was long and UGLY! We haven't had it again.




This doesn't make sense to me though, why would you want to file a CTR on all of the individual employees?

If for example someone wrote a check to me, I endorse it, then have my husband cash it, wouldn't you just do a CTR on my husband? After all who is the one taking the cash out of the bank?

Anyway why would it even be reportable if it is conducted on behalf of all of the employees.

I don't understand, I can see why it was a long process to figure out. T

his could be argued many different ways it seems to me. But I know nothing!!!
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#524615 - 03/30/06 09:54 PM Re: CTR Filing
JoeEastBanker Offline
Member
Joined: Mar 2006
Posts: 68
Boston, MA
tcgcompliance: You absolutely need to file a CTR in this situation! Anytime someone gives you or takes over $10,000.00 in Cash it has to be reported. The question here is "What is Reasonable"? You MUST report the individual conducting the transaction. Multiple transactions are defined a few different ways... not one of them being 'cashing several checks'. As far as you know his workers may owe him money and signed their checks over to him and now he is cashing them (one transaction). Regardless, he must be reported and then comes the question of 'whats reasonable'. I can't see that the IRS would want you to send them 100 pages each with only section A of Part 1 filled out for an individual who needed to cash a $500 payroll check. That itself is a question only the IRS DCC could answer.

I would file for the individual that conducted the transaction and consider it a single transaction.

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#524616 - 03/30/06 09:58 PM Re: CTR Filing
Sunshine_101 Offline
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Sunshine_101
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Section 103.22 (c)(2)

Multiple currency transactions shall be treated as a single transaction

if the financial instituion has knowledge that they are by or on behalf of any person

and result in either cash in or cash out totaling more than $10,000 during any one business day.
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#524617 - 03/30/06 10:19 PM Re: CTR Filing
devsfan Offline
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Joined: Jun 2004
Posts: 1,927
NYC
BrendaC is correct; that is the proper way (as ugly as it might be) to prepare the CTR. Next time, insist on all of the information from the conductor when the transactions are being done, or else refuse it.

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#524618 - 03/31/06 03:34 PM Re: CTR Filing
Floridian Offline
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Joined: Jul 2004
Posts: 56
I spoke with FINCEN this morning and was told to only file a CTR on the individual who took the cash. She referred me to FINCEN ruling 2000-1 http://www.fincen.gov/reg_rulings.html
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#524619 - 03/31/06 04:31 PM Re: CTR Filing
John Burnett Online
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Cape Cod
The ruling that Floridian refers to doesn't address the question head on. To complete the CTR correctly, you have to know on whose behalf the checks are being cashed at the bank.

If each check is individually cashed and the proceeds separated from the proceeds of the other checks, such that it is plain that the courier is taking back a separate cash amount to each check payee (separate envelopes, perhaps), the transaction is clearly being made on behalf of the individual check payees, and there should be a separate Section A entry for each such payee.

If, on the other hand, the checks are added up and the total is given to the courier without any attempt to make separate amounts for each payee, it's apparent that the employer cashed the checks out of its own currency, and is now replenishing that cash for itself. The employer gets listed in Section A, the courier in Section B, and the individual check payees are not listed.
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#524620 - 03/31/06 04:33 PM Re: CTR Filing
John Burnett Online
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John Burnett
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Cape Cod
I'll add a suggestion: Don't allow the employer to do this again unless the employer completes all of the CTR information in Part I for you, including all the extra sheets necessary. Refuse to cash any check for which there isn't complete information (warning the employer that's your requirement). I predict it won't happen again.
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#524621 - 03/31/06 05:17 PM Re: CTR Filing
Floridian Offline
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Joined: Jul 2004
Posts: 56
Your suggestion is well taken and believe me it won't happen here again. Thanks so much for your advice and input.
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#524622 - 04/04/06 11:37 AM Re: CTR Filing
Dolly Nugent Offline
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Dolly Nugent
Joined: Nov 2000
Posts: 1,820
Southern California
I've ran into this situation many times. In most cases we convinced the business to cash one check to cover payroll. Then you can indicate the business name in Section A and the name of the person taking the cash in Section B.

If you continue to cash the checks made payable to the employees, you will need to collect information about each employee for Section A of the form.
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#524623 - 04/04/06 05:57 PM Re: CTR Filing
blvsinangels Offline
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Joined: Aug 2003
Posts: 372
This question came up at a recent BSA seminar. The issue of who endorses the checks should be taken into account. If your single customer signs the back of all of those employees checks, yes file the CTR, but with only one person in section b. Thats my two cents worth!!

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#524624 - 04/05/06 04:28 PM Re: CTR Filing
BrendaC Offline
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BrendaC
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Sweet Home AL
In the scenario I described above, we knew who was benefiting from the cashed check transactions based on information provided by the individual cashing all of the checks. The proceeds of each check was placed into a separate envelope with the name of the payee for distribution by the individual when he returned to the job site. He was serving as the runner and the payees were the individuals ON WHOSE BEHALF the transactions were conducted.

If we are faced with this type of situation, we should ask who is benefiting if we don't know. The information provided by the individual can be compared to the specifics of the situation (how the checks are signed, etc.) and the CTR completed accordingly.
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#524625 - 04/21/06 01:24 PM Re: CTR Filing
Floridian Offline
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Joined: Jul 2004
Posts: 56
Thanks to all of you who responded. I am going with the FINCEN recommendation and not filing the CTR.
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