Anyone know what a typical cash volume might be for a scrap metal business? I have never encountered one until now. We're filing for structuring, but I'm wondering if the cash volume is suspicious as well. It's a new customer and they've withdrawn 190,000.00 in one month, half of which is clearly structured.

Have you talked to the customer? How can someone structure half of their deposits? Do they just withdraw sometime under or at $10,000 and sometimes over $10,000 - that is not structuring. It may very well represent their specific cash needs for that period.

Typically metal recyclers withdraw a lot of cash as that is how they pay for their product. You are asking questions on a customer type that should have all been vetted long before the ink dried on the signature card.

I think you have a gap in your CDD/EDD process at account opening, if you have to follow-up on high risk customers after the fact.

We have several scrap metal companies. Many factors play into how much cash they use. Do they replenish their cash daily or weekly? Are they a small local company or do they have large supplier contracts? I would ask more questions of the customer before filing for structuring. We rely on our new account questionnaire as well as commercial retail staff customer knowledge.

I agree with this. We bank several recyclers. A couple of them regularly exceed the CTR threshold, but also have some days where their cash needs are below the threshold.

Whether or not $190k per month is an appropriate volume for your customer is something you will need to determine through your EDD process. Factors such as the size of your customer's operation, and the proximity of competing scrapyards may reveal that this volume is appropriate, so you'll want to include these considerations in your EDD.

Agreed.

Half of your customer's activity clearly indicates he is not structuring. Filing the SAR is the easy decision, but it has long term ramifications. Talk to him. If you are registered under 314(b), call the bank he came from. (Maybe even if you are not.)

To add to Ken's point, if you are not 314b registered, consider requesting bank statements and a reference. It's a prudent step in today's de-risking environment.

Also, heavily evaluate the sources funding these withdrawals. Often, scrap guys sell to smelters or refiners. Most of the incoming funds should be from them.

The tough part with these businesses is that the red flags aren't always easily identifiable through bank account analysis. If they artificially inflate the weight or value of their goods, the only indicator you might spot would be an excessive difference between how much they pay for scrap and how much they get paid by refineries. And structuring of course...