Anti-Money Laundering — Transaction Monitoring

A Longtime Client Has Started Making Multiple Cash Deposits Just Under $10,000. It Has Happened Six Times This Month. The Account Manager Says They’ve Never Had Problems. Is There an Obligation to Act?

A real AML compliance scenario — with three decision options and the right answer.

The Situation

A compliance analyst at a regional bank reviews the transaction monitoring alerts for the week and notices something unusual for one of the bank’s longest-standing business customers—a small retail business that has banked with the institution for 11 years. Over the past 23 days, the customer has made 6 separate cash deposits ranging from $8,400 to $9,800. Prior to this month, the customer typically made 1 or 2 cash deposits per month, averaging $3,000 to $5,000.

The account manager says the customer is “one of our best” and suggests the increased deposits probably reflect a good sales month. The alert was system-generated. No one has spoken to the customer yet.

Choice AClose the alert with a note that the account manager vouches for the customer and the deposits likely reflect normal business activity. The eleven-year relationship is sufficient context to dismiss the pattern.

Choice BEscalate to the BSA Officer with a full transaction summary. The pattern — six deposits in 23 days all below $10,000, representing a significant departure from historical activity — meets the threshold for SAR consideration regardless of the account manager’s assessment of the customer.

Choice CContact the customer directly and ask them to explain the recent deposit pattern before deciding whether to escalate.

The Right Call

Choice B — Escalate to the BSA Officer immediately.

Choice A substitutes relationship history for legal analysis — the account manager’s opinion is not a valid basis for closing a structuring alert. Choice C is particularly dangerous: contacting the customer about a potential SAR investigation is prohibited under 31 U.S.C. § 5318(g)(2) — the “tipping off” prohibition. An employee who tells a customer that their account has triggered a suspicious activity review has committed a federal violation regardless of their intent. The BSA Officer evaluates the pattern and makes the SAR determination — not the analyst, and not the account manager.

Structuring is illegal even when the underlying money is legitimate.

This surprises many people. The crime of structuring exists because breaking up transactions to avoid CTR reporting is itself an attempt to evade a legal requirement — regardless of where the money came from. A small business owner who genuinely had a good sales month but deliberately deposits the proceeds in sub-$10,000 increments to “avoid the paperwork” has committed a federal crime. The legitimacy of the funds is not a complete defense once structuring intent is established.

The tipping-off prohibition is one of the most commonly violated AML rules.

Employees who identify suspicious activity and then ask the customer about it — with the best intentions of getting an innocent explanation before filing — violate federal law. The SAR process is confidential by design. Once a pattern has been escalated for SAR consideration, no one at the institution may inform the subject of the review. This includes account managers, relationship managers, and branch staff — not just compliance personnel.

Eleven years without problems is not a basis for closing a structuring alert.

Transaction monitoring alerts are evaluated based on the pattern — not the relationship history. A sudden departure from established transaction behavior is suspicious precisely because it is unusual for that customer. The length of the relationship is context for the BSA Officer’s assessment — it is not a reason for the compliance analyst to close the alert without escalation.

What is the difference between a Currency Transaction Report and a Suspicious Activity Report?

A Currency Transaction Report (CTR) is filed automatically for any cash transaction exceeding $10,000 in a single business day — it is a mandatory disclosure, not an accusation. A Suspicious Activity Report (SAR) is filed when a financial institution identifies a transaction or pattern of transactions that it knows, suspects, or has reason to suspect involves money laundering, structuring, or other financial crimes. SARs are confidential — the subject may not be informed.

What is the “tipping off” prohibition and who does it apply to?

Under 31 U.S.C. § 5318(g)(2), a financial institution and its employees are prohibited from disclosing to any person involved in a suspicious transaction that a SAR has been filed or is being considered. The prohibition applies to all employees — not just compliance staff. Penalties include criminal fines and imprisonment. The prohibition exists to protect the integrity of the investigation and to prevent subjects from moving funds or altering their behavior before law enforcement can act.

What is the SAR filing deadline once a suspicious pattern is identified?

FinCEN requires SAR filings within 30 calendar days of initial detection of a suspicious transaction or pattern. If no subject has been identified, the deadline extends to 60 days. Institutions may file a SAR within 24 hours if the situation involves a violation requiring immediate attention by law enforcement. The clock starts when the suspicious activity is identified — not when the investigation is complete.

How to Use This Scenario in Training

Recommended for compliance analysts, transaction monitoring teams, account managers, branch staff, and BSA officers. Two critical recognition skills: identifying a structuring pattern as a SAR trigger regardless of relationship history, and understanding that contacting the customer to “get their side” before escalating is a federal violation under the tipping-off prohibition.

This scenario illustrates the normalization and relationship pressure signals in the Decision Readiness Engine™. The eleven-year customer relationship is exactly the rationalization that makes closing the alert feel reasonable — and exactly why decision-ready compliance professionals are trained to evaluate patterns on their own merits, independent of relationship history.

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