Risk Management Manual of Examination Policies - FDIC

BANK SECRECY ACT, ANTI-MONEY LAUNDERING,
AND OFFICE OF FOREIGN ASSETS CONTROL
• Other unusual domestic or international
shipments. A customer requests an outgoing
shipment or is the beneficiary of a shipment of
currency, and the instructions received appear
inconsistent with normal cash shipment practices. For
example, the customer directs the bank to ship the
funds to a foreign country and advises the bank to
expect same day return of funds from sources different
than the beneficiary named, thereby changing the
source of the funds.
• Frequent cash shipments with no apparent
business reason. Frequent use of cash shipments that
is not justified by the nature of the customer’s business
may be indicative of money laundering.
Currency Exchanges and Other Currency Transactions
• Unusual exchange of denominations. An individual
or group seeks the exchange of small denomination
bills (five, ten and twenty dollar bills) for large
denomination bills (hundred dollar bills), without any
apparent legitimate business reason.
• Check cashing companies. Large increases in the
number and/or amount of cash transactions for check
cashing companies.
• Unusual exchange by a check cashing service. No
exchange or cash back for checks deposited by an
individual who owns a check cashing service can
indicate another source of cash.
• Suspicious movement of funds. Suspicious
movement of funds out of one financial institution,
into another financial institution, and back into the
first financial institution can be indicative of the
layering stage of money laundering.
Deposit Accounts
• Minimal, vague or fictitious information provided.
An individual provides minimal, vague, or fictitious
information that the financial institution cannot readily
verify.
• Lack of references or identification. An individual
attempts to open an account without references or
identification, gives sketchy information, or refuses to
provide the information needed by the financial
institution.
• Non-local address. The individual does not have a
local residential or business address and there is no
Section 8.1
apparent legitimate reason for opening an account with
the bank.
• Customers with multiple accounts. A customer
maintains multiple accounts at a bank or at different
banks for no apparent legitimate reason. The accounts
may be in the same names or in different names with
different signature authorities. Routine inter-account
transfers provide a strong indication of accounts under
common control.
• Frequent deposits or withdrawals with no apparent
business source. The customer frequently deposits or
withdraws large amounts of currency with no apparent
business source, or the business is of a type not known
to generate substantial amounts of currency.
• Multiple accounts with numerous deposits under
$10,000. An individual or group opens a number of
accounts under one or more names, and makes
numerous cash deposits just under $10,000, or
deposits containing bank checks or traveler’s checks,
or a combination of all of these.
• Numerous deposits under $10,000 in a short period
of time. A customer makes numerous deposits under
$10,000 in an account in short periods of time, thereby
avoiding the requirement to file a CTR. This includes
deposits made at an ATM.
• Accounts with a high volume of activity and low
balances. Accounts with a high volume of activity,
which carry low balances, or are frequently
overdrawn, may be indicative of money laundering or
check kiting.
• Large deposits and balances. A customer makes
large deposits and maintains large balances with little
or no apparent justification.
• Deposits and immediate requests for wire transfers
or cash shipments. A customer makes numerous
deposits in an account and almost immediately
requests wire transfers or a cash shipment from that
account to another account, possibly in another
country. These transactions are not consistent with the
customer’s legitimate business needs. Normally, only
a nominal amount remains in the original account.
• Numerous deposits of small incoming wires or
monetary instruments, followed by a large
outgoing wire. Numerous small incoming wires
and/or multiple monetary instruments are deposited
DSC Risk Management Manual of Examination Policies 8.1-41 Bank Secrecy Act (12-04)
Federal Deposit Insurance Corporation