Customer issued $60,000. official check as cash out of Employee Stock Plan to non-customer. Non-customer comes to bank, cashes check, takes $20,000. cash (DTR done). and then requests and we agree to cut 8 official checks for $5,000. each. Now person comes into bank and cashes 2x5, then 10 days later 3x5 then 7 days later 3x5.

We feel we should file a SAR. Person probably thinks they are hiding money from Feds (?)....what would you do? What would you put in the SAR narrative? is this structuring?

We feel we should do a SAR

I guess my question is, why did you allow them to get 8 checks at $5,000 in the first place? Sounded fishy then, questions should have been asked then, not now.

Right. And we will certainly discuss this with the teller. However, to my question, would you file a SAR? narrative would be?

Yes, I would certainly file a SAR. The narrative should contain the same information you presented in your post. For example:

Customer X issued a Cashier's Check for $60M out of Y account. This item was made payable to Z who is not a customer of the bank. Upon receiving the aforementioned Cashier's Check, Mr. Z requested eight (8) official checks, all of which were made payable to ABC for $5M each.

From there, I would just detail the dates he/she cashed the checks and the amounts withdrawn. You could always end it with "This is suspicious, as it is suggestive of structuring to avoid CTR reporting. Furthermore, this activity is suggestive of tax evasion.”

I agree with Georgia, I think it's time for your tellers to undergo some training.

Not sure why you'd leap to the structuring conclusion. On at least three different occasions, a CTR would have been filed.

The tax evasion leap bothers me, too. This guy's disbursement of $60K should result in a mandatory filing with the IRS. He's not going to duck taxes.

The guy may be a kook, or he may have had a reason for splitting the balance up into $5K pieces. Did anyone ask why?

I'm with John. I'm confused - how is this structuring if you file a CTR for every transaction aside from one (the 2 X $5k cashier's check cash-out)?

$20k cash - CTR
2 x $5k cashier's checks cashed out - no CTR
3 x $5k cashier's checks cashed out - CTR
3 x $5k cashier's checks cashed out - CTR

And you think this guy is structuring to avoid the feds? How?

In my experience, some customers do weird things (like break up a large sum into several smaller cashier's checks) but it doesn't automatically mean they're doing something suspicious.

Just because a CTR is filed doesn't mean he didn't he didn't make an attempt to evade the reporting requirements. That's what structuring is. We have multiple customers’ who withdraw/deposit over $10M in one day. However, they do it through multiple transactions. Past experience has led to me determine that's meets the definition of structuring. So, if you ask the customer and he gives you a reason, how do you determine it’s valid? It’s a roll of the dice either way. If it was a one time occurrence, I would agree with you John. But three times is a bit much.

The tax evasion could be a jump, but once again we’re assuming the company is doing the right thing. As we both know, the majority of structuring cases are related to some form of tax evasion. That’s why I suggested mention it.

I disagree. Structuring means the person attempted to get around reporting requirements (usually by breaking up the cash transactions into smaller amounts that are under the reporting threshold). In this scenario, I fail to see how he attempted to get around the reporting requirements.

He cashed multiple items, which when aggregated, hit $10M or exceeded $10M. Unless I misread the original post, he did it three times. This is taken from the 2010 Manual:

"In any manner” includes, but is not limited to, breaking down a single currency sum exceeding $10,000 into smaller amounts that may be conducted as a series of transactions at or less than $10,000. The transactions need not exceed the $10,000 CTR filing threshold at any one bank on any single day in order to constitute structuring."

Structuring is a very subjective topic. It's a matter of what you’re comfortable with Aggs. If you feel that particular example isn't structuring that's fine. Document your rationale and move forward. However, I feel it is structuring, as it falls into the above guidance. As such, I would file the SAR.

I don't think the transaction pattern was mentioned, was it one time or did he come in multiple times. If he presented 3 checks at the same time (last two transactions), then I do not believe that this argument holds water.

With the $5,000. checks the person came in on three different days. ABC, the issuer of the stock checks, most probably will report, as requred by law. (Not a fishy company). We were thinking that the person was trying to hide the money from either a spouse, significant other, etc. The whole trans. from the first check to the other checks was done with us. As the person doesn't have an account with us, they don't hit any account. Probably the person was thinking 1. the whole trans. with ABC will not be reported to the Fed (wrong) and 2. the fact that the money isn't hitting any account the person has with another bank. So, the Fed isn't seeing this either. I am assuming that the person is not taking the cash and going elsewehre, however, ther is always the potential of using a safey deposit box). We get parenoid these days about thinking we have to take off our AML hat and put on our IRS investigator hats, to help them identify people not reporting...I know this is trending in that direction. Personally I don't want that role but I heard a webinar recently (not BOL or ABA) and one of the speakers was frothing at the mouth in describing how she has robust programs for white collar crime (which she put tax evasion into) and gave examples of how she reported, via SARS, potential examples of this type of potential crime. A stretch, I know and I agree with John in this regard....but it is, unfortunately, trending that way.

If I filed a SAR everytime I questioned something, there wouldn't be enough hours in a day. I'm sorry, but unless it is something blatant or huge sums of money, I'm not wassting my time, nor FinCEN's.

I'm with the no SAR group. If he is structuring, he's not very good at it.

So?



In the absence of facts, don't make up your stories. And there is no law against keeping cash in a safe deposit box.


Also with the no SAR camp as well.

Trees, does your bank have a SAR committee? If not, I would highly suggest one, especailly with all of your recent suspicious events!

But most contracts forbid it.

Whether or not a safe deposit contract forbids a lessee from keeping cash in a box, it's certainly not a SAR-worthy event in itself.

I join others here in suggesting that you should not be conjuring up potentially illegal activities that your customer might be involved in. You have transactions that aren't explained based on your experience with customer behavior. You have not indicated that you have asked for an explanation. That would be your first step. Then, if the behavior still doesn't reconcile with reality as you know it, file the SAR. But don't start writing scripts for the Outer Limits, imagining the worst.

Randy actually brought up a good point. I had assumed in my original posts that the customer didn't make the transactions at the same time. Now that Trees confirmed that, I would again recommend filing a SAR.

I'm very curious as to the amount of staff and/or resources people have who are saying contact the customer. How long do you wait for a response when the clock is ticking on not just this incident, but many others? If I even get a response back from the branches, it's usually one that doesn't help make the decision any easier. I don't know the volume that Trees deals with, but that option always isn't available. Some times, you have to make a decision based on what you see. In this particular example, if the activity stops, you don't file a second SAR. Or, don't file the SAR to begin with if you are comfortable with the pattern.

On a side note, it seems a number of people think the little things don't matter. That's hardly the case. We, as bankers never know the full story behind a series of transactions. I can't tell you how many Special Agents have commented at various conferences that a SAR that didn't seem like anything important to a specific bank was the missing piece to a bigger puzzle.

I think she confirmed that the transactions were made the way I initially read:



Maybe things are getting lost in translation here, but if the above is what happened, I still do not see structuring or the need for a SAR. 3 of the 4 transactions are not indicative of structuring attempts, as CTRs were (I assume) filed and there is a paper trail.

But hey, good discussion!

I'm very curious as to the amount of staff and/or resources people have who are saying contact the customer. How long do you wait for a response when the clock is ticking on not just this incident, but many others?

As all others not enough, but the clock does not start ticking until you determine if the actiivity is suspicious.

Very true EA. However, you can't just avoid starting the clock because you don't get a response from the customer or the branch. So, how long do you wait before starting the clock?

Aggs, maybe I'm misreading Trees post. I am under the impression that the customer in the example cashed each check spread over a couple of days. If the situation is as you described, I would be much more comfortable with not filing a SAR.

In this case as Audit is in my name the answer is N/a. Seeing how difficult the process is (compliance dept) and working in branches (dragging the info. from customer) for more years that I care to count. I give the benifit of the doubt to the Compliance dept. for the time as they do not abuse it. Generaly a couple of days.

Wow. Lots of emotion here. Traditionally we are not SAR happy. Just the opposite, believe me! We seem to have spurts of strange things that pop up on our desk, back here in BSA/Complianceland. Sometimes they pop up after the fact when we run SAR rules....as is the case here.

Our culture is very unobtrusive. We are not at the point where we have long applications for details in order to open a checking account! Nor we do ask people why they are doing the type of trans. that they are unless we feel it will be more costly and there is a better way. If a customer cashes a check and says i want the proceeds in 5 checks of 410,000. each payable to me, we do not ask why. Its their business. However...

We do have a committee and that system works good most of the times. I do have people who know our customer snd sometimes the bleeding hearts emerge when we have a true structuring case and then the discussions have to turn to the possible issues that come with getting emotional when filing SARS. But that is another story.

We don't, as a rule, spook over people's visit to their safey deposit box. We are not seeing what is going in/coming out. I don't see how anyone can file a SAR with box visits...unless the customer comes out and says, I am laundering money/avoiding payong taxes, etc etc.

I am leaning towards the do not file a SAR camp in this case.

I will buy many lottery tickets on the way home. I will enjoy a couple glasses of something and maybe weed my garden. I will regain my sense of priorities around 6:00. have a good weekend everyone!

One comment: sometimes the conjuring up scenarios helps staff to think through a transaction and see if it fits any typical activity for an industry, or laundering patterns discussed in the SAR Review or prior activity seen at the bank from other customers. What could this be? Could it be structuring? How? This is a lot of cash, is this usually a cash industry? This is usually a cash industry, where is the cash, what could they be doing - would any of the possibilities be normal vs reportable? Talking it through can really help staff to:

figure it out
learn

Good points. I need to work hard to get that mindset established as a way of life here. The whole concept of using our frontline staff to be on the constant vigil for possible issues has never set well with Executives. Ongoing saga for me. Once the regulators put it in writing, well, that will change things.