This blog is the last part of a three part series that discusses Anti-Money Laundering.
Reminders from Part 2
- Financial Institutions are required to file a Currency Transaction Report, or CTR, for any cash transactions over $10,000.
- The practice of executing financial transactions in a manner as to avoid the CTR filing requirement is known as structuring.
- Financial Institutions are required to have an anti-money laundering to detect suspicious activity.
- Financial Institutes are required to file a Suspicious Activity Report, or SAR, for activity that appears unusual.
Story 1
A restaurant owner structured cash deposits at two different banks, in an attempt to avoid the CTR filing requirement. Both banks filed SAR’s to report the unusual activity. What he didn’t know was that he had already been known to law enforcement for some time and his restaurant was known for dealing in stolen property and selling drugs. While numerous arrests were made, the restaurant owner was never charged.
Due to the SAR filings, prosecutors were able to detail 60 suspect transactions that he structured cash transactions to avoid currency transaction reports. This led to him being charged with structuring as well as to the forfeiture of the funds that had been seized during the investigation.
As part of a plea deal, he consented to the forfeiture of over $20,000, which the government seized during its investigation. He was also required to file amended tax returns as part of his plea, which resulted in more than $80,000 in taxes owed.
Story 2
A bank noticed the account of a pharmaceutical company had pattern of daily $9,800 currency deposits and filed a SAR. The bank then noticed the company’s deposit pattern changed to quantities of cashier’s checks in amounts under $10,000 and filed a second SAR. These reports led to an investigation that revealed the company was distributing pallet-load quantities of psuedoephedrine to a broker who was reselling the drug to large-scale methamphetemine manufacturing operations.
The company sold about 9,000 cases of pseudoephedrine, worth in excess of $5.6 million. Which is enough to produce over 9,000 pounds of methamphetamine with a wholesale value of over $54 million. Eleven individuals were convicted and more than $4 million in cash and property was seized.
Story 3
A motor home dealer obtained loans from a bank, using trade-in motor homes as collateral. The dealer would then sell the used motor homes to individuals and fail to notify or repay the bank. Purchasers of the motor homes and RVs were told they would be mailed the title, which never happened because the banks held them. During an audit, the bank discovered that numerous motor homes pledged as collateral were no longer in the possession of the dealer, amounting to approximately $500,000 and filed a SAR. During the investigation, approximately $600,000 was seized from the dealer, including over $490,000 in currency seized from a home safe.
