CTR for IOLTA account

A runner makes a cash deposit into the IOLTA account for a law firm. The tax ID number is the Florida Bar Association number. So do I use the law firm's tax ID number or the Bar Association's number?

Thank you.

You actually need to know the attorney's client information that gave them the cash, as that is on who's behave the money was deposited.

So we wouldn't include the law firm at all?

If the funds are deposited to the IOLTA account of the firm, you'll provide information on the firm. If it's deposited to the IOLTA account of an individual attorney, you'll include information on that attorney. In both cases, though, you will also need to report information on the client of the law firm or attorney for whom the law firm or attorney is holding the funds.

So the CTR should include three Part I entries. One for the individual bringing in the transactions; one for the law firm or attorney into whose IOLTA account the funds are being deposited; one for the client of the law firm or of the attorney.

John,

We had total of $20,700 cash deposited into the IOLTA account. $2,900 cash was deposited at branch #1 and $17,800 cash was deposted at branch #2. So do we need to request information on client who benefited over $10,000 in cash? I'm thinking there may be multiple clients involved who probably didn't go over the threshold amount.

Thank you

Oh my!

Assuming that the $17,800 deposited at branch #2 was brought in by one conductor, you'll need to provide information on any of the firm's clients on whose behalf that $17,800 was deposited, because the transaction was made by a single individual. You will not need information on the clients on whose behalf the $2,900 cash was deposited at branch #1 unless the same conductor went to both branches.

Thank you

You're welcome. I almost thought you were adding another "what if?" and my mind was about to explode!

Admin Ruling 89-5, example 3, is your primer. The attorney may get excited about disclosing "confidential client information." Point out that if an individual client was responsible for more than $10,000 of the cash, the law required the attorney to report it on Form 8300.

Just a point of confusion on the Form 8300. Here is the part of the instructions that is making me question whether or not the law firm would have to file since they've brought the money to the bank.

Voluntary use of Form 8300. Form 8300 may be filed voluntarily for any suspicious transaction (see Definitions, later) for use by FinCEN and the IRS, even if the total amount does not exceed $10,000.
Exceptions. Cash is not required to be reported if it is received:
• By a financial institution required to file Form 104, Currency Transaction Report;

Is this exception referring to the fact that as a FI we use CTRs and we don't have to file 8300 or is it referring to a situation when the law firm in our case brings in the money and we're filing a CTR so they don't have to file 8300?

You don't file 8300 because you're a financial institution so you file a CTR when you receive the cash.

The law firm is NOT a finanical instituition so it DOES file 8300 when it receives the cash from a client regardless of whether it takes the cash to deposit into an IOLTA or it keeps the cash in a shoe box under someone's desk in the office.

Thanks. One more followup regarding IOLTAs. If the law firm brings in over $10,000 for more than one client but none of the clients individual amounts exceeded $10,000, how do we report? Just the law firm and the runner that brought in the deposit?

Pushed send before I meant to, but I'm pretty sure it should be reported with just the law firm and the person conducting based on the previous posts, but just wanted to confirm! Thanks.

Unless there's a FinCEN ruling on this (I'm not aware of one), you'd treat this just as you would the case of an individual bringing in three cash deposits totaling over $10,000 on behalf of three different persons -- you file one CTR reporting on the one conductor and each of the three persons on whose behalf the deposits were made.

That's a reasonable conclusion. An opinion from the Helpline would trump John's & my agreement.

I'd like to get a little clarification on this subject if possible. When completing a Part 1 for the law firm itself, which box would you check for number 2? Would it be a person conducting transaction for another or person on whose behalf a transaction was conducted?

A law firm cannot physically bring in cash so you would check box 2c, "Person on whose behalf a transaction was conducted." The individual who carried the cash through the door would be box 2b, "Person conducting transaction on behalf of another."

Thank you so much!

You are probably tired of beating on this horse but if I'm understanding your posts correctly, if an individual brings in a cash deposit for an attorney for deposit to an IOLTA account, the bank files a CTR (I get that) with the name of the person bringing in the deposit as the conductor on behalf of the attorney, the attorney's information and then we are suppose to get information from the person conducting the transaction as to who the money is being held for by the attorney?

Yes. The monies belong to the attorney's customer so you need their information.

Okay, so we know then what we are suppose to be collecting to complete that CTR. How many banks are collecting that information from the attorney? What if there are 15 different clients?
This is something that I've let slip through and we have not been asking for it but I doubt that our teller would be able to obtain that information from the clerk or runner who brought in that deposit. Fortunately we don't have it happen often that an IOLTA account had more than $10,000 in cash deposited.

Fortunately we don't have it happen often that an IOLTA account had more than $10,000 in cash deposited.

I think that is basically always the case.

I have recommended to more than one bank that has had to address this exact scenario that their teller should refer the matter to a supervisor who can speak with the runner (who may be an attorney in the law firm or a paralegal or secretary) about the requirements of the CTR. A call can be made to the law office to the get the particulars of the client(s) whose cash is being deposited. Without the client information, I have suggested to the banks that they refuse the deposit.

In one case the attorney involved protested that providing the information would violate attorney-client privilege. I suggested that the bank cite the regulatory requirement for the CTR and the provision for penalties for anyone causing the filing of a CTR with incomplete violation, along with a suggestion that the information requested didn't fall under the attorney-client privilege in the first place.

I have another question and it may need to go else where but it is CTR related. Bank customer is a Lottery Ticket Redemption Agent. Rules for agent is that they can redeem up to $5,000 tickets, a form is completed with all the information on the winner and authorization # is received from state lottery office. If the redemption agent is paying multiple tickets to same person and it's over $10,000, do they have to file a CTR?

In Tennessee????

Claiming a Tennessee Lottery prize is simple. A winning ticket must be presented in order to receive your prize.
•Sign the back of your ticket.

•Any prize with a value of less than $600, including free tickets, can be claimed at any participating retailer or Lottery district office or by mail (see below).

•Any prize ranging from $600 to $199,999 must be claimed at any of the Tennessee Lottery's district offices including the Lottery's headquarters or by mail.

•Any prize with a value of $200,000 or above must be claimed at the Lottery’s headquarters in Nashville.

I get the Tennessee rules. This business is not in Tennessee and according to customer, they are allowed to pay multiple tickets up to $5,000 each.

First, never believe a customer. Second, even if they could, why would they be handing that much cash to a person.

Most likely they would have to file a 8300 even if they were acting as an agent of the State or a CTR if they were also a MSB. The chances of one person having multiple $5,000 tickets are slim to none.

The only thing a bank could do if a customer asked such a question would be to direct them to their own legal counsel.

Law Firm A brings $21,000 in to branch 1 and deposits it into their law firm account using the nationwide IOLTA EIN number. Law Firm B brings $45 in to branch 2 and deposits it into their law firm account that using the nationwide IOLTA EIN number. Law Firm C brings $50 into branch 3 and deposits into their law firm account that uses the nationwide IOLTA EIN number.

In this scenario, we would need to list three Part I's: one for Law Firm A - person on whose behalf transaction was conducted, one for the customer(s) of Law Firm A - person on whose behalf transaction was conducted (potentially more if two individuals brough in 11k a piece), one for the employee of Law Firm A - person conducting transaction for another, and we would list the account number with this transaction.

Do we need to List Part I's for Law Firm B and Law Firm C (along with the identifying information for the individual who brought the funds into the bank) since they are using the nationwide IOLTA EIN number (I believe after reading through the forums the answer is yes, but want another opinion)?

I would not need to identify Law Firm B and Law Firm C customers' since they did not have cash in over $10,000, correct?

Form 8300 will need to be completed by Law Firm A for the customer(s) who aggregated over $10,000 in cash.

any insight would be appreciated.

First, I'm not aware of a "nationwide IOLTA EIN number". These are all governed at the State level.

Just because for interest reporting purposes these accounts may reflect the same EIN, they are not the same entity - the deposits are not made on behalf of the State IOLTA. You only file on Law Firm A

Statewide is what I meant. Thank you for the response Randy. FinCEN agreed with you...

Good day,

The CTR would need to contain the information on the $21,000 transaction involving Law Firm A. A Part I would be required for Law Firm A (2c), the conductor of the transaction (2b), and any other person on whose behalf the transaction was conducted (2c).

The transactions of the other Law Firms would not need to appear on the CTR.

Regards,

FinCEN’s Resource Center

The Ruling formerly known as 89-5 (No connection to Prince)

Ken, thank you very much for that link (and the laugh, long day). It is a very good resource. This situation will be a great example for training (know why the customer is making the deposit and who it is benefiting!). Unsurprisingly, the attorney didn't want to provide any of the client's information to us when we inquired.

The response to the attorney is that he or she is required to file Form 8300 when the client gave him more than $10K in cash. Any argument about a disclosure is moot.

They cited attorney client priveledge and said they were already filing form 8300 so they weren't required to provide it to us.

Under the same premise, you tell him that you are under no obligation to accept the deposit and your next call will be to the agency than manages the IOLTA program in your State and maybe the State BAR, as apparently he is not a very good attorney .

My next step would be to kick the attorney and all accounts to the curb, file a SAR and contact state IOLA program.

Was the attorney's name Saul Goodman by any chance?

We have encountered similar situations and it is amazing how many attorneys are not familiar with form 8300 or their requirement to provide us with the client's information.

There's a reason why this is a long thread...

Thank you for all of the information and responses. I will discuss with the BSA Officer on how to proceed.

As for the attorney-client privilege claim, communications between the client and the attorney are exempt and confidential, but the fact that the attorney is depositing cash on the client's behalf isn't.

Thanks for the clarification John. I have reached out to the state IOLTA program and the state bar associaton for assistance.

I know this topic has been beaten down but follow up question on this: we had an attorney bring in $12,000.00 cash for IOLTA. The Account Officer reached out next day to get client information. They asked the account officer if it was needed since the cash was made up from 5 different clients all below $10,000.00: Client 1=$5,900.00; Client 2=$1,200.00; client 3=$1,000.00, etc.

Would we still need to get each clients information as beneficiary on the CTR? I am leaning towards yes but not 100% sure and am unable to find something that clearly say yes or no. Thank you

PS posted on this thread due to this coming up first in google search in case others had same question in future

Yes - one person conducted the transaction.

The attorney's office may be thinking about a requirement that the attorney file a different CTR form -- the 8300 -- which would not apply in this scenario because none of the individual clients delivered a reportable amount to the attorney. However, each of those clients (and the attorney or law firm) is a person on whose behalf the $12,000 cash deposit was made at the bank, so the attorney needs to provide the bank the information about those clients that is needed to complete the CTR.

We had an attorney whose bookkeeper went on vacation so when she returned she had two weeks worth of cash to deposit and yep it was over $10,000. I sent the section to the attorney regarding the requirement to list all the client information and told him we would need the information for the individuals that were represented by the cash deposit. The last names were listed on the deposit list but getting everything that was needed was a challenge. He did provide us the information in about a week. There were about 15 different individuals. When I see him on occasion, he smiles and says it won't happen again.