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#2213280 - 05/09/19 07:41 PM CTR file or not?
EuphegeniaDoubtfire Offline
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Posts: 44
Hello,
We have a situation where there is a disagreement on whether to file a CTR or not. John Doe came in and made two deposits for two different accounts. First deposit was for his DBA account totaling $9,000.00 cash. The second deposit was for a business account on which he is a signer, totaling $1,600.00. I feel that since this customer physically handed over more than $10,000.00 a CTR is required, (plus he has access to both accounts). Another opinion was because the two deposits were for two separate entities with different tax ID's that one is not needed. Input please! I am going back and forth on this and am not confident on what should happen. I plan on asking the BSA Officer but wanted to see what other people thought.
Thanks!

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#2213315 - 05/09/19 11:40 PM Re: CTR file or not? EuphegeniaDoubtfire
BrianC Offline
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A CTR is required if more than $10,000 is conducted "by or on behalf of" the same person. Although we don't have more than $10,000 on behalf of the same person ($9,000 for the DBA and $1,600 for the entity.) we do have $10,600 conducted by the same person. A CTR is required.

You BSA Officer should also evaluate the deposits to determine if the customer structured them to try and avoid a CTR which could result in other forms being filed.
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#2213348 - 05/10/19 04:25 PM Re: CTR file or not? EuphegeniaDoubtfire
EuphegeniaDoubtfire Offline
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That's what I was leaning towards, but I got told no by the BSA officer.

The explanation I was given was this: "Multiple Currency transactions totaling more than $10,000 during any one business day are treated as a single transaction if the bank has knowledge that they are by or on behalf of the same person. Transactions throughout the bank should be aggregated when determining multiple transactions.

In cases where multiple businesses share a common owner, the presumption is that separately incorporated entities are independent persons. The currency transactions of separately incorporated businesses should not automatically be aggregated as being on behalf of any one person simply because those business are owned by the same person. Financial institutions should determine, based on information obtained in the ordinary course of business, whether multiple businesses that share a common owner are being operated independently depending on all the facts and circumstances.

However, if a financial institution determines that these businesses (or one or more of the businesses and the private accounts of the owner) are not operating separately or independently of one another or their common owner (e.g., the businesses are staffed by the same employees and are located at the same address, the bank accounts of one business are repeatedly used to pay the personal expenses of the owner) the financial institution may determine that aggregating the businesses' transactions is appropriate because the transactions were made on behalf of a single person.

If a financial institution determines that the businesses are independent, then it should not aggregate the separate transactions of these businesses. Alternatively, once a financial institution determines that the businesses are not independent of each other or their common owner, then the transactions of these businesses should be aggregated going forward."

What I understood from the officer was that since the businesses are being operated independently that there was no need for a CTR. What I get caught up on though is the same person bringing in over $10,000.00 in cash. I guess I will call this a loss and maybe note that there was a difference in opinion and I was overruled.

Thank you for your input!

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#2213350 - 05/10/19 04:33 PM Re: CTR file or not? EuphegeniaDoubtfire
BrianC Offline
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Illinois
Aggregating commonly owned businesses or not is based on determining if we have more than $10,000 conducted on behalf of the same entity. (We are determining if we treat multiple business as a single entity.)

This guidance does not negate the requirement to aggregate when multiple transactions are conducted BY the same person. It's an either/or requirements. We file if (1) there are more than $10,000 conducted on behalf of the same entity OR we file if (2) more than $10,000 is conducted by the same person.

Option 1 did not occur because we treat the DBA and the corporation as separate entities. Option 2 DID occur because John brought in all the money.

Your BSA Officer is wrong.
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#2213351 - 05/10/19 04:44 PM Re: CTR file or not? EuphegeniaDoubtfire
EuphegeniaDoubtfire Offline
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I agree with you. I reached out again and FDIC is being contacted for clarification. Thank you! I'll let you know the outcome!
Last edited by EuphegeniaDoubtfire; 05/10/19 06:25 PM.
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#2213464 - 05/13/19 07:23 PM Re: CTR file or not? EuphegeniaDoubtfire
TryingtoComply Offline
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The West
If your BSA Officer told you that a CTR was not required, then they don't know what they are doing. That was rather harsh, but the instructions to the CTR are quite clear. A CTR is required when cash transaction exceed $10K and are conducted BY OR ON BEHALF of the same person. The transaction you described met the "by" prong.
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#2213532 - 05/14/19 04:52 PM Re: CTR file or not? EuphegeniaDoubtfire
EuphegeniaDoubtfire Offline
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I was told that the FDIC said we do not need one also, part of the reasoning is knowing the customer. I tried!

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#2213558 - 05/14/19 07:19 PM Re: CTR file or not? EuphegeniaDoubtfire
TryingtoComply Offline
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The West
Someone should be calling FinCEN, not the FDIC. Knowing the customer has nothing to do with CTR filing obligations.
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#2213560 - 05/14/19 07:31 PM Re: CTR file or not? EuphegeniaDoubtfire
ColoradoAML Offline
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I feel like something must be missing in this explanation, like the corporate customer being exempt. Otherwise there's no justification for the BSAO or FDIC's interpretation. There's plenty of grey area in BSA, but this seems as clear as it can get"

"multiple currency transactions shall be treated as a single transaction if the financial institution 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"

KYC also has nothing to do with CTRs other than in exemption, and this whole thing just sounds like people throwing words around.

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#2213562 - 05/14/19 07:40 PM Re: CTR file or not? EuphegeniaDoubtfire
EuphegeniaDoubtfire Offline
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Corporate customer is not exempt. I have documentation of my reasoning for thinking it needs to be filed, which I will hang on to if needed later down the road. Thank you everyone, I am glad I am not the only one thinking this way.

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#2213563 - 05/14/19 07:40 PM Re: CTR file or not? EuphegeniaDoubtfire
TryingtoComply Offline
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The West
I agree Colorado. Sometimes the way information is presented will influence the response. I think the facts are not being presently correctly, perhaps by someone that really doesn't understand them.

As you stated, the answer is clear. A CTR is required.

OP,
Your bank is risking a future potential violation here if this is discovered. Someone should be placing a call to FinCEN. Remember, they are the only agency qualified to interpret the regulation (not the FDIC). Never ask the FDIC a question regarding BSA -- go straight to FinCEN.

I would go back to whoever the decision maker is for this and say something like this: I am still thinking about this situation and I'm wondering if we should place a call to FinCEN.

If they don't want to do that, then make sure your name is not associated with the decision.

Good luck!
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#2213578 - 05/14/19 08:55 PM Re: CTR file or not? EuphegeniaDoubtfire
EuphegeniaDoubtfire Offline
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Thank you for the information, it is still a no!

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#2213579 - 05/14/19 09:00 PM Re: CTR file or not? EuphegeniaDoubtfire
HappyGilmore Offline
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Pulling people out of the ditc...
Originally Posted By EuphegeniaDoubtfire
Thank you for the information, it is still a no!


i am not meaning to beat a dead horse, but many a bank has had regulatory action taken against them for failure to file CTRs - especially if a pattern of not filing is present (and i don't mean to imply one is present here). i have never heard of regulatory action taken against a bank for filing a CTR that "maybe they shouldn't have or didn't need to file."
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#2213596 - 05/15/19 11:52 AM Re: CTR file or not? HappyGilmore
Adam Witmer Offline
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Originally Posted By HappyGilmore
especially if a pattern of not filing is present (and i don't mean to imply one is present here). "

This was my concern as well when reading this post. Depending on the size of the bank, it would be unlikely that this is the only time this has happened.

FWIW, I agree with others that a CTR is absolutely required (unless we are missing something from the situation), based on the explanation Brian C. gave.
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#2213725 - 05/15/19 08:30 PM Re: CTR file or not? TryingtoComply
John Burnett Offline
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Cape Cod
Originally Posted By TryingtoComply
Someone should be calling FinCEN, not the FDIC. Knowing the customer has nothing to do with CTR filing obligations.


KYC would enter into a decision whether the aggregate multiple businesses based on ownership rather than entity by entity under the guidance that was wrongfully cited by the BSA officer to answer the question at hand in this thread.

I agree, by the way, that the BSA officer is incorrect here and doubtless gave the FDIC incorrect info to get the answer he got (not that the FDIC should have been the resource called).
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#2213768 - 05/16/19 02:56 PM Re: CTR file or not? EuphegeniaDoubtfire
EuphegeniaDoubtfire Offline
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A further explanation I received was "If Joe's deposits were into two different businesses owned by him or for the benefit of him then we would file a CTR. The reason it doesn't apply is because the two businesses don't have a relationship to each other and both don't benefit Joe, even though Joe did the deposit"

"even though Joe made the deposit" isn't that why it SHOULD be?

I lost the battle and will just move forward with the documentation of why I disagree which is all I can do at this point.

I appreciate everyone's feedback, this has been stressful for me!

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#2213775 - 05/16/19 03:25 PM Re: CTR file or not? EuphegeniaDoubtfire
Adam Witmer Offline
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Originally Posted By EuphegeniaDoubtfire
"even though Joe made the deposit" isn't that why it SHOULD be?


This is exactly why a CTR is required. I'm really surprised that a BSA officer is fighting back on this.
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#2213777 - 05/16/19 03:29 PM Re: CTR file or not? Adam Witmer
HappyGilmore Offline
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Pulling people out of the ditc...
Originally Posted By Adam Witmer


This is exactly why a CTR is required. I'm really surprised that a BSA officer is fighting back on this.


perhaps the question to ask is not why they are fighting back but what is the relationship between the BSA officer and Joe
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#2213779 - 05/16/19 03:44 PM Re: CTR file or not? EuphegeniaDoubtfire
Adam Witmer Offline
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FinCEN doesn't have a high tolerance when bankers help customers avoid reporting requirements: https://www.fincen.gov/news/news-release...-actions-branch
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Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
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#2213784 - 05/16/19 04:16 PM Re: CTR file or not? EuphegeniaDoubtfire
EuphegeniaDoubtfire Offline
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I just don't know. By no means do I feel the officer is doing that. I understand their thinking of not worrying that the customer is trying anything fishy as I am familiar with him as well, but I don't agree with not filing.

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#2213811 - 05/16/19 06:44 PM Re: CTR file or not? EuphegeniaDoubtfire
HappyGilmore Offline
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Pulling people out of the ditc...
CTR reporting has nothing to do with if the customer is doing something fishy or not...it is simply hard and fast instructions on dollar amounts.
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#2213814 - 05/16/19 06:59 PM Re: CTR file or not? EuphegeniaDoubtfire
EuphegeniaDoubtfire Offline
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I agree

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