Banking Question

[[AK]Nuts]

My co-worker and I are sitting around BS'ing about crime, the lottery and banks. One question that we have that I couldn't get answered by google involves deposits and withdrawls. I know we have a couple of bank guys in here so I'm hoping someone knows the answer.

1. What's the largest cash withdrawl I can make from my bank? Is there a specific withdrawl amount that would trigger a flag with the IRS or Secret Service?

2) The same question for the largest cash deposit.

This came from a question about giving someone money after winning the lottery. I know that I can give a guy 50k tax free, one time only, as a gift. But what would stop me from pulling out 100k in cash and giving it to him in cash, as long as he doesn't deposit it or spend it all at once. Beside his guilt for not paying taxes, this seems like a way to skirt the law.

I also hear that if you pay cash for anything in excess of $20k, it triggers a flag in the government/banking industry.

Any ideas?
(and yes, my boss is gone for the day and I'm counting down the minutes to sneak out an go see a movie)

[[AK]Hylander]

Hmm.. being our Institutions Compliance, OFAC, and Fraud Officer.... I'm not sure I should answer these questions!

1. What's the largest cash withdrawl I can make from my bank? Is there a specific withdrawl amount that would trigger a flag with the IRS or Secret Service?

$10,000 is the typical tripping point before a Currency Transaction Report (CTR) is filed. However, thanks to the ever increasing requirements of The Patriot Act and the BSA (Bank Secrecy Act)... we have to "know our customers". If you made two $5,000 deposits or withdrawals close to one another, the institution will most likely file whats called an SAR (Suspicious Activity Report). If you deposit $9,999... the institution is most likely going to file an SAR. If you deposit $1,000 a day for 10 days.. they are going to file an SAR. They are going to do this not to "get you", but to cover their own asses "just in case".

2) The same question for the largest cash deposit.

It's based on transactions, not deposit or withdrawal. So it doesn't matter which it is.

This came from a question about giving someone money after winning the lottery. I know that I can give a guy 50k tax free, one time only, as a gift. But what would stop me from pulling out 100k in cash and giving it to him in cash, as long as he doesn't deposit it or spend it all at once. Beside his guilt for not paying taxes, this seems like a way to skirt the law.

I also hear that if you pay cash for anything in excess of $20k, it triggers a flag in the government/banking industry.

Any ideas?
(and yes, my boss is gone for the day and I'm counting down the minutes to sneak out an go see a movie)

It all comes down to suspicious activity reports and cash transactions at financial institutions. SAR can be filed for any reason the institution desires if they find any activity 'suspicious'. The cash transactions are generally $10,000 - again, depending on what the financial institution notices as 'odd'.

When you win the lottery, the IRS is going to track that money. They are most likely going to know when the money was deposited, when it was withdrawn, etc. The chances of them coming to you and asking you what you did with that $50,000 cash withdrawal is slim to none.... as they will know where the funds came from - the lottery winnings and taxes were already paid on that. Yes, your buddy would be responsible for the tax gift over what the IRS reg limits are - but the chances of them seeing that if he keeps it in cash are minimal "I would think". (Covering my own ass! )

Just to clarify one last things, the CTR is for cash only. Checks are not monitored in the same way. That being Checks have to clear and there is a permanent record for all checks that clear the corporate accounts and Federal Reserve. The above refers to cash/currency transactions which I believe you were only refering too.

[[AK]Rocks]

LOL, Good summary of Anti money laundering (AML) lesson Hylander. So, if Nutz has Bank of America accounts then we will keep a good watch on him. Big Brother could be watching. Even in the Cayman Islands!

[[AK]Hylander]

LOL, Good summary of Anti money laundering (AML) lesson Hylander. So, if Nutz has Bank of America accounts then we will keep a good watch on him. Big Brother could be watching. Even in the Cayman Islands!

I now have a line of credit at BOA thanks to the MBNA merger... you better watch my account too. I'm a member of the Association of Certified Fraud Examiners (I'm not certified) and I learned all about ways to commit... I mean prevent financial institution fraud. Nuts and I may have to work on something...

NCUA Examiners are in for us this coming Monday matter of fact... I'm too familiar with all this BS because I spent the last two weeks re-reading our policy manuals and all the Rule, Regs, and Guidance letters. I didn't say I understood them... I'm just familiar with them because I read them! They can take our risk assessments and stick it where the sun don't shine.... At least I have multi-factor authentication implementation completed.

[[AK]Rocks]

Ouch.. Doesn;t sound like fun, but I will watch your account to ensure you don't exceed the 9,999.99 AML alarm.. Good luck next week..

[[AK]Nuts]

This brings us back to the topic that I was discussing with my co-workers: why is it that criminals are so freakin stupid. Case in point: A few years back a guy robbed an armored truck (he was the driver)... he drove to Reno, checked into a hotel room using his credit card and then drove to a car dealer and paid cash for a truck.

With all the crime shows (CSI, L&O, New Detectives, etc) there are so many ways to learn about crime... yet these idiots still do the stupidest things in the world.

I should write a book about how to commit crime and not get caught... it seems so easy!

[[AK]Rocks]

it seems so easy!

Well, I think the stupid ones get caught first due to the fact that they cant seem to grasp the idea working is the best long term option. The really smarts ones hold down a job usually at the company that they hosing money out of. One never knows who is sitting in the cube next to you... $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ IE.. Enron, HP, ......etc .....

[[AK]Clay]

Most criminals are criminals not because they've performed a careful analysis of risk/benifits. It's usually because they're not right.

Ever heard of the maze test? They did a study. Let's say you take a person up for parole and you say "we'll let you out on Parrole, but you have to take this maze, and go from one end to the other with your pencil without ever lifting your pencil off the paper (backtracking is OK) or crossing lines". The ones that succeed are good canditates, because they have self control. The ones that fail, even knowing this, are the ones that will break parrole.

It's because they lack impulse control. And lack of impulse control, and forthought, is what makes most criminals. This is why most of the really bad ones get caught by routine traffic stops. Four warrents out for their arrest, yet they still go 85 in a 55 zone.

[[AK]Hylander]

Most of the crime we see these days revolves around share drafts (checks). Although we've had 4 or 5 people fall for Canadian Lottery scams... luckily only 1 actually wired the money before we realized what was going on. We've put two people behind bars over the last couple of years based on bad checks (People don't think bouncing checks is a crime - well it is when either another depositor or one of the financial institutions is out funds due to it).. but luckily we don't have a whole lot of crime. Even our plastics losses are relatively small. The worst we had is when a batch of newly re-issued cards (not just ours, there were thousands of cards from many institutions) were stolen from the Dulles airport in route to the card holders.