CTR question - cash withdrawals from business

If the authorized signer on 2 business accounts is withdrawing currency from each account that totals over $10,000, are the businesses listed on the CTR? - As Person on whose behalf transaction is conducted? for each of the businesses?

Am I reading too much into this? Currently we have the authorized signer as "conducting on own behalf" with the business account numbers listed.

Thanks.

An individual cannot conduct on their own behalf when drawing money out of a business account. A cash withdrawal is on behalf of the business, not the authorized signer.

Randy: For clarification purposes and as I'm sure you know, it could be on their own behalf if the business account in reference is a sole proprietorship. If it's another type of legal entity (i.e. LLC, Inc. etc), I agree that it could not. From FinCEN's sole proprietorship guidance: "Consistent with the definition of “person” in the Bank Secrecy Act’s implementing regulations, a sole
proprietorship is not a separate legal person from its individual owner."



Yes, they would be included on the CTR, but how will depend on the type of entity. See FinCEN's Feb 6, 2020 guidance (that is technically still delayed): https://www.fincen.gov/sites/defaul.../2020-02-10/FinCEN_CTR_Form112_508_1.pdf

No disagreement Adam. I guess I made an assumption when they used the term "authorized signer" it not being a sole proprietor account. Also, if there was a true authorized signer on a sole proprietor account, the transaction would still have been conduct on behalf of the individual that owns the account.

Assuming we're not dealing with a sole proprietor, there is a difference between a business-purpose cash withdrawal and cashing a payroll check. You might consider an owner's "draw" like a payroll transactions, and it might be, but you would need more info to say so definitely, I think.

Since we are on the same subject about cash withdrawals from a business.....

Customer came into the bank to deposit checks into an account (that has a business name on it - but no EIN or any other supporting docs - this was before CIP requirements.) I even checked our Secretary of State Website and there is no business by that name, even in the inactive file. I should also mention that on our system, it doesn't even has his SSN in the Tax Identification - it is just blank.

Customer took out over the $10,000.00 threshold from the 'less cash received' box. (Versus depositing all of it and writing a check for the cash.)

After talking with the teller that conducted the transaction, she confirms that the cash back would be to buy supplies for the business.

How would I go about putting the Business in the CTR? Would I enter it as another page in the Part I Person involved in Transactions? Or would I enter the business name under the individual that conducted the transaction? So, it would be his name but then put the business name in #8 - Alternate Name. I'm assuming that this is a Sole Proprietor account, but I have no way of knowing 'for sure'.

Sometimes, I overthink these CTR's way too much - to the point it keeps me up at night.

Any help would be greatly appreciated!

You need to contact the customer and get this all straighten out as to what is going on and gather additional information concerning the business or close the account and do the best you can. There is no current answer to your question. Cash back on business deposits are never allowed in any bank of which I am aware.

Whether that account was opened before CIP or not, you should not knowingly allow a purported business account in your bank where you don't know how it's formed (sole prop, partnership, LLC, Corporation, etc.) or have any documentation on authorized signers (assuming it's not a sole prop).

And you should not allow a business to conduct a "less cash" deposit. Even a sole proprietor should deposit checks in their entirety and draw a check for cash needs.

And, even if that account was opened sixty years ago, the bank has a responsibility to know more about the business and its routine transaction types and volumes than it apparently does.

I understand some of the reasons why it's not a good business practice for the customer to withdraw cash, but what is the main risk for the Bank allowing such a thing to take place? Because they are helping the customer commit tax crimes potentially? What would be the difference with that and the wide variety of other ways tax crimes could be committed and for which the Banbk often just files a SAR?

One of the main reasons is that the standard corporate resolutions used by banks do not provide an authorized signer of the business the authority to negotiate checks made to the business for cash. Pull one of yours out and check. If the business has an embezzlement going on, the bank is going to be stuck with all of it. To prevent this, banks just say no to all businesses - sole props or not. It is too hard to train your teller staff otherwise. It is just a flat "not allowed".

Randy has hit on the principal reason that banks should not allow businesses to cash checks payable to them, and should not allow businesses to conduct "cash back" deposit transactions. Tax fraud could be involved, sure, but a creditor of the business could sue the bank if business funds are being converted to personal use. Other owners of a business could also come after the bank, if one of the owners is stealing from the business by converting checks payable to the business to his or her own use.

Make them deposit the checks and issue a check from the business account if they are an authorized signer.

Thank you both for your input.