I can’t count how many times people have asked me what amount of money they may deposit into their bank accounts without the government finding out. Now, I’m not going to get into ‘why’ they were asking, or whether it was just curiosity, but I can also tell you I laugh every time I hear someone talk about a way they, or someone they know, gets around “the system”.

For those of you out there who for some reason or another want to “hide” what you are doing with your money from the prying eyes of “Big Brother”, let me say this to you right now: “YOU CAN’T”.  At least, you can’t do it within reasonably consistent surety. If you’re an experienced monel launderer or mule, I suppose you may find a way to at least temporarily hide the cash. However, for the average person, there is just too much oversight. Again, I’m not writing this as an analysis of ‘why’ someone would want to hide their transactions, I’m simply offering some friendly advise to put a few of the myths to rest.

“If I deposit less than so and so amount of money, it doesn’t get reported to the government.” I’ve heard that so many times and the fact is, it’s not accurate. This article is not going to be an in depth analysis and how to of the movement of funds within our banking system. I’m simply going to post a few facts about the process. The following items are required by law in order to be in compliance with The Bank Secrecy Act.

1) The CTR (Currency Transaction Report) – This report is filed by the financial institution whenever there is a currency transaction in excess of $10,000. Any time a CASH transaction takes place over this amount, the financial institution must file a report.

So if you simply deposit $9,999.99 or any amount below it won’t get reported to the government, right?

WRONG.

2) The SAR (Suspicious Activity Report) – These are generally filed for amounts of $5,000 when the Financial Institution knows, suspects, or has reason to suspect the money is derived from illegal activities. Also, the Financial Insitution can file an SAR any time it believes the transaction is part of a plan to violate federal laws and financial reporting requirements. In the industry, we call this “structuring”. In other words, the Financial Insitution can file an SAR to the government for any activity it sees that might be suspicious in any way. This means that if you deposit $4,500 at one branch location, and then $2,000 at another location, and then $2,500 at an ATM deposit, it is highly likely that it will be report on a SAR. Financial Insitutions have software and neuro-networks for AML (Anti-Money Laundering) purposes and to detect structuring of various kinds including cash deposits, EFT (Electronic Fund Transfers), Wires, and Check Kiting. Since the institution or individual(s) performing transactions for the customer could be held accountable for fraudulent activity if they have not performed at least their minimum due diligence duty, it is very likely anything that is even remotely suspicious will be reported for “CYA” purposes. For those that are not aware, that refers to “Cover Your Ass”

Until next time..