NEW YORK â€“ March 12, 2008 â€“ A commonly-used form of money laundering called â€œstructuringâ€ has recently emerged in the news.
According to Dr. Michael Recce, chief scientist at Fortent, a New York company focused on risk, compliance and information technology, â€œStructuring is a favorite method used by money launderers to attempt to avoid detection."
â€œDue to the Bank Secrecy Act and the USA PATRIOT Act regulations, banks are required to report customer transactions of $10,000 or more to federal authorities," said Recce. "So in order to get around these requirements, an individual could â€˜structureâ€™ or divide payments into a set of transactions where each individual transaction is below this $10,000 threshold. This maneuver increases the chances that the individual would fly under the radar of banksâ€™ compliance departments.
â€œDivided transactions raise suspicion levels, and banks have systems in place to detect just this sort of criminal behavior.â€
Common signs of structuring, said Recce, include:
1. Movement of cash in multiple transactions under $10,000 â€“ â€œObviously, not every transaction of under $10,000 is suspect, but if banks see a pattern of cash movement to the same account when it doesnâ€™t seem to make sense, this raises red flags.â€
2. Attempts to take the senderâ€™s name off wire transfers â€“ â€œIf you have nothing to hide, why would you try to conceal your transactions?â€
3. Large cash deposits made to ATMs â€“ â€œMost people deposit checks, not cash, into ATMs, so banksâ€™ systems tend to raise red flags for these types of transactions.â€
â€œTo detect structuring,â€ says Dr. Recce, â€œanti-money laundering systems, such as Fortentâ€™s, look for situations in which multiple transactions of slightly under $10,000 are performed within short periods of time, possibly at multiple branches or locations of a bank.â€