The $9,400 Laundromat: Structuring, CTR Aggregation and Teller Notes
BrightWash LLC operates three coin-laundry and car-wash locations and has banked with Riverbend Community Bank for 11 years. Its average monthly cash deposits are $38,000 and its tax returns show $1.1 million in annual revenue. Over 12 consecutive business days, the owner, Marek, deposits $9,400, $9,350, $9,450 and similar amounts at three different branches, totaling $112,800. Each deposit is under $10,000, and no single day's deposits exceed $10,000 when aggregated by taxpayer identification number. A teller note records Marek saying, 'My accountant told me to keep it under ten so the paperwork doesn't slow us down.' The bank's monitoring system did not generate a CTR; it generated one alert because the 12-day cash total exceeded the peer-group threshold. The branch manager says BrightWash is a good customer and the cash is normal for a laundromat. Riverbend's SAR threshold is $2,000, and its policy requires a decision within 30 days of alert closure.
1. Determine whether a CTR and a SAR are required, with deadlines, and explain why the legitimate business profile does not resolve the question.
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CTR: No CTR is required on these facts because no single business day's cash deposits exceed $10,000 when aggregated by the same taxpayer identification number. A CTR is triggered by cash transactions over $10,000 in one day, including multiple transactions the bank knows or has reason to know are by or on behalf of the same person. The pattern here is across days, not within a day.
SAR: A SAR is required. The 12 deposits just below $10,000, the repeated branch-switching, and Marek's statement that his accountant told him to 'keep it under ten' support a reasonable suspicion of structuring under 31 U.S.C. 5324. The bank's $2,000 threshold is met. File within 30 calendar days of initial detection (60 if no suspect is identified). The fact that BrightWash is a legitimate cash-intensive business does not negate intent; legitimate funds can be structured. Do not tell the customer. Review the prior 12 months for similar activity and include it in the narrative.
2. How should the bank handle the teller note, the branch manager's view, and the accountant's advice? What internal escalations are needed?
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Preserve and escalate. The teller note is direct evidence. The BSA officer should interview the teller, record the exact words and date, and preserve the note and any system records. The branch manager's 'good customer' opinion is a business view, not a legal basis to suppress the alert. Do not confront Marek or mention the SAR.
Employee-conduct issue: Determine whether any bank employee suggested keeping deposits under $10,000. If so, escalate to HR and legal; an employee who helps a customer evade reporting creates serious bank exposure. The accountant's advice is also relevant: it may indicate a professional enabler, though the bank's immediate duty is to report its own suspicion, not to investigate the accountant. Provide branch training on never advising customers on reporting thresholds.
3. Recommend monitoring changes and documentation standards for this fact pattern.
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Tuning: Add branch-level daily aggregation, a rolling 10-day cash scenario, peer groups by business type and revenue, and a scenario for repeated deposits just below $10,000. Use teller-note text as a risk attribute. Document the scenario logic, thresholds and validation, and run a 12-month lookback.
Decision documentation: If, after review, the bank concludes no SAR is warranted, the file must state the facts, the analysis and the approver-not simply 'long-standing customer.' Here the facts support filing. If the bank files, set a 90-day continuing-activity review. Also review whether the monitoring system's failure to generate a CTR alert reflects a data-quality issue in aggregating by TIN across branches.