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#672664 - 01/25/07 09:11 PM bsa

If a commercial loan customer brings in a large amount of large checks made payable to different business of which he paid these companys for a variey of works performed for his business. He then turns around and cashes these checks himself for the business. Each of these checks are for more than $1000.00 Does this make him a MSB and should this constitue a SAR's. This customer has done this 2 times before. He is in the business of construction of new homes.

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#672702 - 01/25/07 09:36 PM Re: bsa Anonymous
Georgia Golfer Offline
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Georgia Golfer
Joined: Jun 2003
Posts: 415
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I'm not sure I completely understand, so let me recap: A construction company is bringing in 3rd party business checks that they are cashing? These other businesses are doing some contracting work for him & as payback he's cashing checks for them? We have prohibited ALL of our MSB's from cashing 3rd party business checks. There have been only 1 or 2 instances of MSB's that have tried to slip one in & we have refused to accept those checks & filed SAR's on the MSB's.

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#672861 - 01/26/07 12:27 AM Re: bsa Georgia Golfer
MagicCity Offline

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Joined: Apr 2003
Posts: 3,003
Fort Lauderdale, Florida
I understand this scenario to be:

A construction company is paying its contractors for work done and then cashing the checks for them and giving them cash.

I think that is highly irregular.
Where is he getting his cash from to fund these checks?
It may technically make him an MSB, but more than that it makes him/his activity suspicious and I would file a SAR.


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#673611 - 01/26/07 07:51 PM Re: bsa MagicCity
rlcarey Online
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Joined: Jul 2001
Posts: 80,358
Galveston, TX
Are the checks signed by the other business and endorsed back to the contractor?

If not - how are you negotiating them?

If they are - how do you know that the signatures are legitimate and authorized?

It is a lose/lose situation and something that the bank may eventually be on the hook for.

It is also a great way to create income tax fraud. The contractor shows these as expenses on his books and walks with the cash. Pretty slick - right?
The opinions expressed here should not be construed to be those of my employer:

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