The Retired Farmer With Three Wires
A customer opened an account four months ago with a $250,000 wire from a company with a generic name in another country. The new-account form lists him as a retired farmer with $300,000 net worth and 'no third-party involvement.' Since then he has placed no trades, deposited three $9,800 cashier's checks on consecutive days, and requested three outgoing wires of roughly $80,000 each to three different individuals in two countries. He calls from a different phone number each time, declines to explain the purpose of the wires, and asks the AP whether the branch 'reports anything to the government.' The AP wants to know whether to just close the account quietly.
1. Should a suspicious activity report be filed? Address timing, who files, and what goes in it.
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Yes - this is a reportable pattern, and 'quietly closing' is not an alternative to filing.
Red flags, individually and together: third-party funding inconsistent with the stated profile; an offshore corporate source; a declared 'no third-party involvement' that is contradicted by the outbound wires to unrelated individuals; rapid pass-through of funds with no trading; changing phone numbers; evasive answers about purpose; and a direct question about government reporting that suggests awareness of monitoring.
Timing: the clock runs from initial detection - here, at the latest when the manager reviewed the file. A report is due within 30 calendar days of detection, extendable to 60 if no subject can be identified. Three wires and a question about reporting make 30 days the realistic target.
Who files: the firm's AML compliance officer or designee files with the appropriate authority. The branch manager's job is to escalate promptly, in writing, with the underlying records - not to decide alone and not to sit on it.
Content: who, what, when, where, why it is suspicious, and how the activity was conducted. Attach the account opening file, wire and deposit records, call logs, and the customer's statements. Describe the activity factually; do not characterize the customer as a criminal.
The $9,800 sizing is a nuance, not the case: cashier's checks are monetary instruments, not currency, so the near-$10,000 pattern is a red flag about intent rather than a currency-reporting technicality. File on the totality.
2. What may the AP and branch manager say to the customer, and what should they do about the account in the meantime?
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Say nothing about the report. There is a confidentiality obligation: no disclosure that a report was filed, that one may be filed, or that the customer is being reviewed. The customer's question about government reporting gets a neutral, truthful answer - the firm follows its regulatory obligations and does not discuss account monitoring - and the conversation is documented.
Ongoing handling:
- Do not close as a substitute for filing. Closing pushes the activity to another firm and looks like avoidance.
- Consider limits rather than a cliff: require source-of-funds and beneficiary documentation before the next outbound wire, restrict the account to closing-only transactions, and get approval from compliance for any exception.
- Ask the questions in writing. A written request for the purpose of the wires and the identity of the recipients produces either an explanation or a refusal, and both are evidence.
- Re-screen all parties - the customer, the sending company, and each wire recipient - against sanctions lists before the next movement. A match changes the response from reporting to blocking and separate notification.
- Document every step with dates, including the decision not to close yet and the reasoning.
3. The AP says the customer is 'a little odd but harmless' and the account is small. How should the manager respond, and what is the risk of delay?
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On the AP's reasoning: size and oddness are not the test. The test is whether the activity is inconsistent with the customer's profile and has no apparent economic purpose - it plainly is and does. An AP's comfort level is not an AML judgment, and an AP who discourages escalation is creating personal and firm exposure.
Risk of delay:
- The clock runs regardless. Detection already occurred; failing to escalate does not stop it.
- Funds keep moving. Each additional wire before review deepens the firm's involvement and makes recovery or a blocking action harder.
- Pattern evidence is lost. The AP's informal impression is not documentation; without file notes, the firm cannot show what it knew.
- Escalation duty. The manager's obligation is to move it up the chain promptly and in writing. If a supervisor tells the manager to drop it, the manager records the instruction and escalates further - a note saying 'I was told not to file' protects no one if nothing was written.
What to do now: written referral to the AML officer today, a copy in the branch file, a hold on further outbound wires pending review, and a short memo to the AP explaining that customer-handling judgments on suspicion belong to compliance, not the desk.