Am I just totally paranoid or is it unusual for a law firm to be depositing large amounts of cash? This is a new customer and in 3 days has deposited over $35,000.

It's hard to say what is "usual" for a law firm. The field is simply so broad, and the industry's clients range from the very rich to the very poor, the very honest and upstanding to the most unsavory.

You certainly have the right, and I would say the obligation, to ask the firm the nature of its cash transactions, without asking about client names. That can help you understand the customer. I think you should be "up front" with the firm and tell them that you expect their cooperation in filing CTRs listing their clients' names and ID info when appropriate, and that you may from time to time ask about "clusters" of cash transactions if you feel they appear out of the ordinary.

As for the $35K, it may or may not have arisen from transactions with or for a single client. I suggest you ask.

I think it is unusual, and that is one of our red flag items. But, as John said, research and investigation would happen before a SAR is filed.

Thanks for your response. I have since found out that they are collection attorneys....collecting for a phone company, cell phone company, cable company, etc. It seems reasonable that individuals will bring cash to them to settle the debts.

I agree. That takes care of worrying about a SAR -- at least until something strange happens. Now you'll want to watch for structuring, and for any reluctance on the firm's part to give you the name(s) of clients for whom they collect cash if they are the subject of a CTR.

Just to clarify, are you filing the CTR showing only the customer (law firm) information, or are you getting and reporting their customers' information as well?

The law firm is our customer and we are filing the CTR on the law firm and transactor who brings in the cash.

Current examination procedures suggest that "customer due diligence" at account inception would have put the bank in a better position to evaluate the cash deposits. In short, you're going to need the information anyway, you might as well ask them about the focus of their practice, the types of items they will be depositing, etc. when the account is opened. Now, they are more likely to be resistive.

When you go visit them to have this conversation, see if you see enough traffic in their office to account for $35,000 in cash in three days when all the debtors are paying is phone bills. In addition, look at their deposits to see if they include other items; e.g. PMOs, official checks etc. which most people would use to pay a past due bill. I'm not buying this explanation, but note that they may have one I would buy.

If you are filing CTRs on this customer I recommend you re-think your entries in Section A of the form. When law firms deposit cash, they almost always are doing so on behalf of a client. The client is, in my opinion, a person who benefits from the deposit of the cash. That's why I suggested earlier that you get a comfort level with the firm's willingness to share that information with you.

In the case which you are describing, I question whether anything useful will derive from the firm's client's names and ID information. But the CTR rules are not written to include a decision point concerning the utility of information. If they were, we'd probably file a heck of a lot fewer CTRs!