4 ms·

As a former bank teller let me tell you all the brilliant ways people would try to get around this. * Depositing $9,999 cash (yeah, still gonna report that) *

As a former bank teller let me tell you all the brilliant ways people would try to get around this. * Depositing $9,999 cash (yeah, still gonna report that) * Depositing random X,000 cash increments across multiple transactions (yeah, still going to report that) * Making cash deposits across multiple locations in the same day/week (as if the computer didn’t alert us to multiple cash deposits)

gruez 6y ago
So if I want to get around it all I need to do is * make sure the deposits are under $9000, but also not some amount that's "suspicious" like $8,999 * make sure the deposits happen on a regular interval * make sure the deposits are at the same branch I also suspect banks don't share information to generate SAR (eg. a deposit of $15,000 at one bank would generate a SAR, but a deposit of $7,500 at two banks on the same day won't generate a SAR), so if you need to deposit more cash then all you need to do is open more accounts at more banks.
- ceejayoz 6y ago
  Nothing says the bank can't go "hey this guy deposited $90k in cash this year". They may ask you where you're getting it; if you own a bunch of vending machines, you're probably fine. If your answers are evasive or don't make sense, you might be getting a SAR. $10k is just the automatic threshold for a CTR. A $1 transaction could cause a SAR to be filed, if there was a reason for the bank to be suspicious of it.
  - nelaboras 6y ago
    That's why any real criminal activity will have a front. Chinese takeaway, vending machines, flower or newspaper vendor, second hand shop, ..
    - kjs3 6y ago
      Those types of businesses get additional scrutiny from the financial fraud team for precisely the reason they're useful as front businesses (as well as tax evasion).
      - gruez 6y ago
        What does this look like? Does the bank ask for receipts if a Chinese restaurant wants to be their customer? Do they stake out the restaurant to see whether the foot traffic levels correspond to the claimed revenues?
        pas 6y ago
        Some banks do, some don't. In a lot of countries if you establish a small company and open a bank account for it they will just do the bare minimum, after all if you got a tax number and just got a new company registered you already jumped through a few background check hoops. Of course they will still run your name through their whatever systems. And eventually if your business starts transacting it'll be constantly looked at by the automated systems. As long as you don't do anything suspicious, no one will care. Basically if you behave like all the small shops that have to deposit cash, no one will look twice. Also, cash is not interesting, the problem is when you start to wire money (or get transfers) to/from places that small kitchens usually don't. And that's when risk and compliance departments might notice the activity.
        kjs3 6y ago
        No, it compares this Chinese restaurant to the hundreds or thousands of other similar businesses who bank with it, in similar markets. No, the bank doesn't ask for receipts or stake out businesses. If that business has a transaction profile that's out of line with the 'similar business' model, they potentially get flagged.
- hypersoar 6y ago
  Yeah, they've thought of this. It's called structuring, and it's a crime[0]. Side note: I see this kind of response a lot on HN. Whenever a precisely-defined law or regulation comes up, there will be the inevitable tricksy engineers pointing out a bug in the program. Except they haven't read the whole program, but only a couple of stanzas. And it's not actually a program. It's not being interpreted by a computer, but by people. At a certain point, rules-laywering will get the actual lawyers to tell you to get out of here with that. Repeating something I've written here before: Your adversaries are people, not bash scripts. [0] https://www.law.cornell.edu/uscode/text/31/5324 https://www.law.cornell.edu/uscode/text/31/5324
safog 6y ago
Curious - how do people who work cash jobs handle this or if your system flags them. I pay our cleaner say $100 in cash. Pretty sure they don't report that to the IRS or pay taxes on it. What happens if they deposit say 2-3k / mo spread across several days? (~30k / yr in total?)
- ceejayoz 6y ago
  > What happens if they deposit say 2-3k / mo spread across several days? Nothing? Nowhere near the thresholds.
- raincom 6y ago
  Their AML systems will flag this activity as suspicious, and someone in the back office file a SAR. Think of the financial circuit as closed and traceable. Any untraceable entries and exits into this circuit needs CTRs and SARs. Untraceable entries/exits: cash, money orders, cashier checks, wire transfers, etc.
- kjs3 6y ago
  The financial fraud teams have models of what cash-based businesses 'should' look like. They don't, per se, care if these folks aren't paying taxes (the IRS does, and they have their own models). The Bank is looking more for things like "I'm a house cleaner...depositing $250k+ a year" (possible, but unlikely) or "I've been depositing 2-3k a month for a couple of years and suddenly I'm depositing 10-20k a month".
starkred 6y ago
You've crushed the dreams of a lot of people who get their tax tips from anonymous internet posters. "Deposit $9,999 to fool the IRS" is up there with "Consult with top divorce lawyers to keep them from representing you spouse" in the Hall of Bad Legal Advice.
- kjs3 6y ago
  Yeah...there's not a COBOL program running someplace saying IF DEPOSIT IS EQUAL TO 9999.00 THEN FLAG-IT. There's some pretty sophisticated machine learning work being done here, and all the major banks these days have a data science team working the problem.
  - starkred 6y ago
    Sadly there probably is such a COBOL program but it's only going to be the first in line of a lot of systems looking for fraud.
    - kjs3 6y ago
      Why is that sad? Since there are a vast collection of morons who see "transactions over 10k will get flagged" and 'cleverly' say "ah-ha! I shall beat the system with 9999.00!", why wouldn't you want to spot that early and easy?

gruez 6y ago

So if I want to get around it all I need to do is * make sure the deposits are under $9000, but also not some amount that's "suspicious" like $8,999 * make sure the deposits happen on a regular interval * make sure the deposits are at the same branch I also suspect banks don't share information to generate SAR (eg. a deposit of $15,000 at one bank would generate a SAR, but a deposit of $7,500 at two banks on the same day won't generate a SAR), so if you need to deposit more cash then all you need to do is open more accounts at more banks.

ceejayoz 6y ago
Nothing says the bank can't go "hey this guy deposited $90k in cash this year". They may ask you where you're getting it; if you own a bunch of vending machines, you're probably fine. If your answers are evasive or don't make sense, you might be getting a SAR. $10k is just the automatic threshold for a CTR. A $1 transaction could cause a SAR to be filed, if there was a reason for the bank to be suspicious of it.
- nelaboras 6y ago
  That's why any real criminal activity will have a front. Chinese takeaway, vending machines, flower or newspaper vendor, second hand shop, ..
  - kjs3 6y ago
    Those types of businesses get additional scrutiny from the financial fraud team for precisely the reason they're useful as front businesses (as well as tax evasion).
    - gruez 6y ago
      What does this look like? Does the bank ask for receipts if a Chinese restaurant wants to be their customer? Do they stake out the restaurant to see whether the foot traffic levels correspond to the claimed revenues?
      - pas 6y ago
        Some banks do, some don't. In a lot of countries if you establish a small company and open a bank account for it they will just do the bare minimum, after all if you got a tax number and just got a new company registered you already jumped through a few background check hoops. Of course they will still run your name through their whatever systems. And eventually if your business starts transacting it'll be constantly looked at by the automated systems. As long as you don't do anything suspicious, no one will care. Basically if you behave like all the small shops that have to deposit cash, no one will look twice. Also, cash is not interesting, the problem is when you start to wire money (or get transfers) to/from places that small kitchens usually don't. And that's when risk and compliance departments might notice the activity.
      - kjs3 6y ago
        No, it compares this Chinese restaurant to the hundreds or thousands of other similar businesses who bank with it, in similar markets. No, the bank doesn't ask for receipts or stake out businesses. If that business has a transaction profile that's out of line with the 'similar business' model, they potentially get flagged.
hypersoar 6y ago
Yeah, they've thought of this. It's called structuring, and it's a crime[0]. Side note: I see this kind of response a lot on HN. Whenever a precisely-defined law or regulation comes up, there will be the inevitable tricksy engineers pointing out a bug in the program. Except they haven't read the whole program, but only a couple of stanzas. And it's not actually a program. It's not being interpreted by a computer, but by people. At a certain point, rules-laywering will get the actual lawyers to tell you to get out of here with that. Repeating something I've written here before: Your adversaries are people, not bash scripts. [0] https://www.law.cornell.edu/uscode/text/31/5324 https://www.law.cornell.edu/uscode/text/31/5324

safog 6y ago

Curious - how do people who work cash jobs handle this or if your system flags them. I pay our cleaner say $100 in cash. Pretty sure they don't report that to the IRS or pay taxes on it. What happens if they deposit say 2-3k / mo spread across several days? (~30k / yr in total?)

ceejayoz 6y ago
> What happens if they deposit say 2-3k / mo spread across several days? Nothing? Nowhere near the thresholds.
raincom 6y ago
Their AML systems will flag this activity as suspicious, and someone in the back office file a SAR. Think of the financial circuit as closed and traceable. Any untraceable entries and exits into this circuit needs CTRs and SARs. Untraceable entries/exits: cash, money orders, cashier checks, wire transfers, etc.
kjs3 6y ago
The financial fraud teams have models of what cash-based businesses 'should' look like. They don't, per se, care if these folks aren't paying taxes (the IRS does, and they have their own models). The Bank is looking more for things like "I'm a house cleaner...depositing $250k+ a year" (possible, but unlikely) or "I've been depositing 2-3k a month for a couple of years and suddenly I'm depositing 10-20k a month".

starkred 6y ago

You've crushed the dreams of a lot of people who get their tax tips from anonymous internet posters. "Deposit $9,999 to fool the IRS" is up there with "Consult with top divorce lawyers to keep them from representing you spouse" in the Hall of Bad Legal Advice.

kjs3 6y ago
Yeah...there's not a COBOL program running someplace saying IF DEPOSIT IS EQUAL TO 9999.00 THEN FLAG-IT. There's some pretty sophisticated machine learning work being done here, and all the major banks these days have a data science team working the problem.
- starkred 6y ago
  Sadly there probably is such a COBOL program but it's only going to be the first in line of a lot of systems looking for fraud.
  - kjs3 6y ago
    Why is that sad? Since there are a vast collection of morons who see "transactions over 10k will get flagged" and 'cleverly' say "ah-ha! I shall beat the system with 9999.00!", why wouldn't you want to spot that early and easy?