Money Laundering: Stakeholders View Recordkeeping Requirements for
Cashier's Checks as Sufficient (Letter Report, 07/28/95, GAO/GGD-95-189).

Pursuant to a legislative requirement and a congressional request, GAO
provided information on: (1) the current recordkeeping requirements for
cashier checks; and (2) whether federal government and financial
industry officials believe that additional recordkeeping requirements
should be imposed on those financial institutions issuing cashier
checks.

GAO found that the Bank Secrecy Act (BSA) requires financial
institutions issuing or exchanging cashier's checks to: (1) file a
currency transaction report for financial transactions over $10,000; (2)
capture and retain purchaser information for transactions between $3,000
to $10,000; (3) retain copies of cashier's checks for amounts over $100;
and (4) maintain a record of certain check transactions exceeding $100.
In addition, GAO found that federal government and financial industry
officials believe that the current recordkeeping and reporting
requirements are sufficient, and imposing additional requirements would
not add to the effectiveness of the current BSA recordkeeping
requirements.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-95-189
     TITLE:  Money Laundering: Stakeholders View Recordkeeping 
             Requirements for Cashier's Checks as Sufficient
      DATE:  07/28/95
   SUBJECT:  Records management
             Financial institutions
             Financial records
             Currency and coinage
             Check disbursement or control
             Documentation
             Disclosure law
             Money laundering
             Reporting requirements

             
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Cover
================================================================ COVER


Report to the Committee on Banking, Housing, and Urban Affairs, U.S. 
Senate, and the Committee on Banking and Financial Services, House of
Representatives

July 1995

MONEY LAUNDERING - STAKEHOLDERS
VIEW RECORDKEEPING REQUIREMENTS
FOR CASHIER'S CHECKS AS SUFFICIENT

GAO/GGD-95-189

Money Laundering


Abbreviations
=============================================================== ABBREV

  BSA - Bank Secrecy Act of 1970
  CID - Criminal Investigation Division
  FBI - Federal Bureau of Investigation
  FDIC - Federal Deposit Insurance Corporation
  FRB - Federal Reserve Board
  IRS - Internal Revenue Service
  OCC - Office of the Comptroller of the Currency

Letter
=============================================================== LETTER


B-259797

July 28, 1995

The Honorable Alfonse M.  D'Amato
Chairman
The Honorable Paul S.  Sarbanes
Ranking Minority Member
Committee on Banking, Housing, and Urban Affairs
United States Senate

The Honorable Jim Leach
Chairman
The Honorable Henry B.  Gonzalez
Ranking Minority Member
Committee on Banking and Financial Services
House of Representatives

The Bank Secrecy Act of 1970 (BSA), as amended, requires that
financial institutions\1 maintain certain records and reports for
criminal, tax, or regulatory proceedings, including investigations of
money laundering.  The Money Laundering Suppression Act of 1994
required us to determine whether additional recordkeeping
requirements, such as making copies of cashier's checks retrievable
by customer information, should be imposed on those financial
institutions issuing cashier's checks.  Specifically, for financial
institutions issuing cashier's checks, we agreed with the Committees
to (1) identify the current recordkeeping requirements and (2)
determine the views of federal government and financial industry
officials on the need for additional recordkeeping requirements. 

To identify current recordkeeping requirements, we reviewed pertinent
provisions of BSA and federal regulations for issuing and maintaining
records for cashier's checks and other monetary instruments.  To
determine federal and industry officials' views, we discussed with
Treasury, Federal Bureau of Investigation (FBI), federal financial
regulatory agency, and financial industry officials (1) the
usefulness of the currently required records and (2) the need for
additional recordkeeping requirements.  (App.  I contains the details
of our objectives, scope, and methodology.)


--------------------
\1 The Department of the Treasury regulations implementing BSA define
the term "financial institution" to include banks, federally
regulated securities brokers, currency exchange houses, funds
transmitters, check cashing businesses, and persons subject to
supervision by state or federal bank supervisory authority. 


   BACKGROUND
------------------------------------------------------------ Letter :1

Criminal enterprises generate enormous amounts of cash.  To make them
easier to conceal and transport, some criminal enterprises convert
illicit cash proceeds into monetary instruments, such as traveler's
checks, money orders, or cashier's checks.  To combat this practice,
Treasury, in implementing the requirements of BSA, requires financial
institutions to report and maintain records of certain financial
transactions.  These reporting and recordkeeping requirements, which
vary by the amount of the financial transaction, are intended to (1)
assist law enforcement officials in criminal, tax, or regulatory
investigations and proceedings and (2) help law enforcement officials
identify suspicious and unusual financial transactions. 

To further assist law enforcement officials in their efforts to
combat money laundering, financial institutions are urged by Treasury
and federal financial industry regulators to develop an effective
know-your-customer program.  Know-your-customer programs are designed
to encourage employees of financial institutions to become familiar
with the banking practices of their customers so that they can
recognize transactions that are outside the normal course of a
customer's business practices and report them as suspicious to the
appropriate federal oversight agencies. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

Treasury regulations implementing the Bank Secrecy Act require
financial institutions, when issuing or exchanging cashier's checks
for currency, to (1) file a currency transaction report for financial
transactions involving more than $10,000 in currency, (2) capture and
retain purchaser information for transactions of $3,000 to $10,000,
(3) retain copies of cashier's checks for amounts over $100, and (4)
maintain a record of certain check transactions exceeding $100.  In
addition, Treasury and the financial industry have been working
together to place more emphasis on the need for financial
institutions to (1) develop effective know-your-customer programs and
(2) report suspicious financial transactions. 

Federal regulators, financial industry officials and advisory groups,
and law enforcement officials with whom we spoke or who had expressed
their views in published documents agreed that current recordkeeping
and reporting requirements--together with the development of
effective know-your-customer programs and the reporting of suspicious
financial transactions--are sufficient requirements for those
financial institutions issuing cashier's checks.  They agreed that
imposing additional recordkeeping requirements, such as one that
would specifically require financial institutions to have systems to
retrieve copies of cashier's checks by customer name or account
number, would not add to the effectiveness of the current BSA
recordkeeping requirements. 


   CURRENT RECORDKEEPING
   REQUIREMENTS FOR CASHIER'S
   CHECKS
------------------------------------------------------------ Letter :3

In implementing BSA requirements, Treasury requires financial
institutions to file a currency transaction report for each deposit,
withdrawal, exchange of currency, or other payment or transfer by,
through, or to financial institutions, that involves more than
$10,000 in currency.  This requirement includes cashier's checks. 

Because concern existed that money launderers were making financial
transactions in amounts of $10,000 or less to evade the BSA reporting
requirements, Congress in 1988 amended the BSA to require financial
institutions to capture, verify, and retain a record of the identity
of the purchasers of cashier's checks and certain other monetary
instruments for currency of $3,000 or more.  The Secretary of the
Treasury also determined that it would be useful to criminal
investigators to require banks to retain (1) either the original or a
copy of certain checks, including cashier's checks, exceeding $100
and (2) records prepared or received in the ordinary course of
business that would be needed to reconstruct a customer's deposit
account and to trace through the bank's processing system a check in
excess of $100 deposited in an account.  Treasury requires that these
records be retained for 5 years and be made readily available to the
Secretary of the Treasury upon request. 

In addition, after it had received inquiries from financial
institutions about whether suspicious transactions should be reported
and what information should be reported, the Department of the
Treasury issued Administrative Ruling 88-1 on June 22, 1988.  This
ruling encouraged but did not require financial institutions to
report transactions that might be "...relevant to a possible
violation of the BSA or its regulations or indicative of money
laundering or tax evasion" to the local office of the Internal
Revenue Service's (IRS) Criminal Investigation Division (CID).  Also
in 1988, the Comptroller of the Currency Regulation 12 C.F.R. 
section 21.11 and corresponding regulations issued by the other bank
regulatory agencies required financial institutions to report
suspected money laundering and/or BSA violations and provide a copy
of these reports to the local office of IRS' CID.  A 1992 amendment
to BSA prohibits financial institutions from notifying persons
involved in suspicious transactions that the transaction had been
reported to IRS.\2

Table 1 summarizes the current recordkeeping and reporting
requirements for cashier's checks. 



                                     Table 1
                     
                       Federal Recordkeeping and Reporting
                     Requirements for Transactions Involving
                                 Cashier's Checks

Transaction
amount        Type of requirement   Description
------------  --------------------  --------------------------------------------
Over $100     Recordkeeping and     Treasury requires financial institutions to
              retention             retain (1) copies or originals of cashier's
                                    checks and (2) a record of transactions
                                    associated with deposit accounts that
                                    involved check transactions over $100. These
                                    records and copies are to be retained for 5
                                    years.

$3,000-       Recordkeeping and     In addition to the requirements noted above
$10,000       retention             for transactions exceeding $100, financial
                                    institutions are required to capture,
                                    verify, and retain information on the
                                    identity of the purchasers of cashier's
                                    checks for $3,000 to $10,000. These records
                                    are required to be retained for 5 years.

Over $10,000  Currency transaction  IRS Form 4789 is used to report to IRS
              reporting             transactions involving the physical transfer
                                    of currency in excess of $10,000.

              Recordkeeping and     Same requirement as noted above for
              retention             cashier's checks exceeding $100.

Any amount    Suspicious            Financial institutions are encouraged by
              transaction           Treasury and required by financial industry
              reporting             regulators to report abnormal or suspicious
                                    transactions of any amount to IRS and the
                                    appropriate financial industry regulator.
                                    Various forms and methods of reporting are
                                    used.
--------------------------------------------------------------------------------
Sources:  GAO review of pertinent provisions of BSA and federal
financial industry regulations and administrative rulings. 

In 1990, Treasury developed a regulation to implement the 1988
amendment to BSA that required financial institutions to capture,
verify, and retain information on the identity of purchasers of
cashier's checks and other monetary instruments.  After considering
several alternative recordkeeping requirements, including a
requirement that information be kept on copies of monetary
instruments and be retrievable by copy, Treasury concluded that
maintaining a log\3 of the BSA-required information would be the most
effective method of keeping the information. 

Imposing a specific requirement that financial institutions maintain
the BSA-required information on copies of monetary instruments was
viewed as too burdensome because, according to Treasury officials, it
would require financial institutions to sift through thousands of
documents located at various branches to comply with a Treasury
request for purchaser information.  Treasury also took into
consideration that financial institutions keep different kinds of
records for each type of monetary instrument and decided that a log
would make the BSA information more easily accessible by both the
financial institutions and the Treasury Department. 

Treasury's August 1990 regulation requiring the log did not specify
the form in which the log was to be maintained.  In addition, the
1990 regulation allowed for but did not require that a separate log
be maintained for each type of monetary instrument.\4 Treasury
anticipated that it would request copies of logs by date of issuance
rather than by customer name, account number, or type of monetary
instrument. 

Subsequent to the institution of the log requirement, Treasury found
that the BSA information that was being logged on the sale or
exchange of cashier's checks for currency was seldom used by law
enforcement officials and federal regulators to initiate or conduct
money laundering investigations.  Compliance with the log requirement
was found to impose an expensive and time-consuming burden on the
financial industry.  As a result, in October 1994, Treasury rescinded
the log requirement.\5 Treasury now permits financial institutions to
maintain the required BSA information in any format they choose, as
long as the information can be readily retrieved at the request of
the Secretary of the Treasury. 


--------------------
\2 Our report on suspicious-transaction reporting discusses several
methods that are currently used by financial institutions to report
suspicious transactions.  See Money Laundering:  Needed Improvements
for Reporting Suspicious Transactions Are Planned (GAO/GGD-95-156,
May 30, 1995). 

\3 A log is a means of recording information in one place to make the
information more easily accessible. 

\4 In addition to cashier's checks--bank checks, bank drafts, money
orders, and traveler's checks were included in the scope of the log
requirement. 

\5 59 Fed.  Reg.  52,250 (1994). 


   VIEWS OF FEDERAL REGULATORY,
   FINANCIAL INDUSTRY, AND LAW
   ENFORCEMENT OFFICIALS
------------------------------------------------------------ Letter :4

Federal regulators, financial industry officials and advisory groups,
and law enforcement officials with whom we spoke or who had expressed
their views in published documents agreed that the rescinding of the
log requirement that was associated with current BSA recordkeeping
requirements and the renewal of emphasis on having financial
institutions (1) develop effective know-your-customer programs and
(2) report suspicious financial transactions, are sufficient
requirements for financial institutions issuing cashier's checks.  In
addition, they agreed that imposing additional recordkeeping
requirements, such as one that would specifically require financial
institutions to retrieve copies of cashier's checks by customer name
or account number, would not add to the effectiveness of the current
BSA recordkeeping requirements. 


      PREVIOUSLY IMPOSED
      RECORDKEEPING LOG
      REQUIREMENT WAS NOT
      BENEFICIAL
---------------------------------------------------------- Letter :4.1

Federal regulators, financial industry officials and advisory groups,
and law enforcement officials with whom we spoke or who had expressed
their views in published documents supported Treasury's decision to
rescind the log requirement for cashier's checks and other monetary
instruments.  Reasons cited included the time and effort it took to
retrieve the required BSA information on specific purchasers, the
limited usefulness of the data retrieved, and the expense associated
with maintaining the data. 

In 1993, Treasury formed a money laundering task force to consider
ways to reduce the regulatory burden of complying with BSA while
enhancing the utility of the information collected.  In 1994, the
task force concluded that the BSA information that financial
institutions were required to maintain in logs had been infrequently
requested and used by law enforcement officials.  In addition, the
task force and representatives of the financial services industry
found that compliance with the log requirement imposed an expensive
and time-consuming burden on financial institutions when weighed
against more immediate leads in the hands of law enforcement
officials, such as reports of suspicious transactions that were being
sent directly to IRS. 

Criminal investigators from IRS and the FBI said that, because of
other leads and the ease of utilizing information obtained from
direct reporting of suspicious criminal activities, including
suspicious-transaction reports, the logged BSA data on the sale or
exchange of monetary instruments were used infrequently.  They said
that the logged BSA information was used on a limited basis,
primarily to build a stronger case against a suspect or for further
investigation or research. 

Representatives of financial institutions said that they found the
log requirement to be costly and burdensome.  To avoid the
requirement, some financial institutions prohibited the direct sale
of monetary instruments for cash to both deposit and nondeposit
customers.  Under this policy, customers were required to deposit
cash into an account from which a financial institution could then
issue a withdrawal to pay for the monetary instrument.\6 Many bankers
had indicated their preference for policies prohibiting the sale of
monetary instruments for cash because this lessened the possibility
of errors and omissions on the logs and eliminated the additional
paperwork created by the log requirement. 

The American Bankers Association estimated in October 1994 that the
elimination of the log requirement could save the financial industry
about $1 million a year in compliance costs and ease the
administrative burden on financial institutions. 


--------------------
\6 Treasury advised banks that such a policy did not violate BSA and
that implementing such a policy was within the bank's discretion. 
However, Treasury did require the adoption of a written policy and
formal written procedures for implementing it.  Also, Treasury
required that the policy apply to all deposit customers without
exception. 


      CURRENT RECORDKEEPING AND
      REPORTING REQUIREMENTS
      VIEWED AS SUFFICIENT
---------------------------------------------------------- Letter :4.2

Federal regulators, financial industry officials and advisory groups,
and law enforcement officials with whom we spoke or who had expressed
their views in published documents agreed that increased emphasis is
currently being placed on developing effective know-your-customer
programs and suspicious-transaction reporting, that banks are
required to retain copies of certain monetary instruments, and that
financial institutions are required to obtain purchaser identifying
information.  They further agreed that these requirements are
sufficient for assisting law enforcement officials in their efforts
to detect and further investigate the use of monetary instruments to
launder money. 

Treasury consulted with a BSA advisory group\7 composed of 30
representatives from the financial services industry, trades,
businesses, and federal and state governments.  Treasury concurred
with the BSA advisory group's conclusion that financial institutions'
resources could be more effectively used to assist law enforcement
officials if more emphasis were placed on (1) developing effective
know-your-customer programs and (2) reporting suspicious financial
transactions to the appropriate regulatory agencies.  The American
Bankers Association also agreed with this conclusion. 

Treasury and federal financial regulators have increased their
efforts to alert financial institutions to be more aware that the
institutions may be misused by criminals who engage in financial
transactions to conceal illegal proceeds and avoid federal currency
transaction reporting requirements.  Financial institutions are being
encouraged to become more familiar with the banking practices of
their customers--commonly referred to as the know-your-customer
program--so that transactions that are outside the norm can be
readily identified and reported to appropriate regulatory agencies as
suspicious. 

Treasury expects to issue federal guidelines on developing know-
your-customer programs and reporting suspicious transactions in 1995. 
In the absence of such guidelines, federal bank regulators and
financial industry groups have for some time provided guidance to
their members either in writing or through seminars that address the
importance of know-your-customer programs and suspicious-transaction
reporting.  These guidelines and seminars provided tips to financial
institutions for detecting the use of cashier's checks and certain
other monetary instruments to launder money.\8 Appendix II provides
information on guidance provided by the three major bank regulatory
agencies and on money laundering seminars held by financial industry
groups to inform their members. 

Law enforcement officials responsible for combating money laundering
activities with whom we spoke said that in light of the increased
emphasis being placed on the development of know- your-customer
programs and the reporting of suspicious transactions, no additional
recordkeeping requirements are needed beyond those that are already
in place.  IRS and FBI criminal investigators said that they support
the efforts of federal regulators to encourage financial institutions
to place more emphasis on reporting suspicious transactions.  These
law enforcement officials said that current efforts to promote direct
reporting of suspicious transactions would be more beneficial to them
than searching through logs of information, because direct reporting
would provide a more immediate and direct lead to criminal
investigators.  They also said that the increased emphasis on
developing know-your-customer programs and reporting suspicious
transactions, together with the ongoing requirement that financial
institutions retain information on purchasers of monetary
instruments, should improve law enforcement's ability to detect and
further investigate the use of monetary instruments to launder money. 


--------------------
\7 A 1992 amendment to BSA required Treasury to establish a BSA
advisory group to advise the Secretary of the Treasury on how to
modify reporting requirements to enhance law enforcement and inform
the private sector on the uses of reported information. 

\8 Results from a 1990 American Bankers Association survey showed
that 86 percent of the banking industry had established
know-your-customer guidelines. 


   CONCLUSION
------------------------------------------------------------ Letter :5

Federal regulators, financial industry and advisory groups, and
federal law enforcement officials with whom we spoke or who had
expressed their views in published documents agreed that current
recordkeeping requirements for cashier's checks--together with the
renewed emphasis being placed on the development of effective
know-your-customer programs and suspicious-transaction reporting
requirements--are sufficient means for assisting law enforcement
officials in their efforts to combat the use of cashier's checks and
certain other monetary instruments to launder money. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :6

In June 1995, we requested comments on a draft of this report from
the Secretary of the Treasury or his designee, the Commissioner of
IRS or her designee, and the American Bankers Association.  In
written responses, the Director of Treasury's Financial Crimes
Enforcement Network, the IRS Assistant Commissioner of Criminal
Investigations, and the Senior Federal Counsel on Government
Relations and Retail Banking of the American Bankers Association all
agreed with the information presented and the conclusion reached. 


---------------------------------------------------------- Letter :6.1

We are sending copies of this report to the Secretary of the
Treasury, the Director of Treasury's Financial Crimes Enforcement
Network, the Commissioner of Internal Revenue, the IRS Assistant
Commissioner of Criminal Investigations, the Attorney General, the
Chief of the FBI's Economic Crimes Unit, and other interested
parties.  We will also make copies available to others upon request. 

This report was prepared under the direction and guidance of Chas. 
Michael Johnson, Evaluator-in-Charge.  Please contact me at (202)
512-8777 if you have any questions concerning this report. 

Laurie E.  Ekstrand
Associate Director, Administration
 of Justice Issues


OBJECTIVES, SCOPE, AND METHODOLOGY
=========================================================== Appendix I

As agreed with the Committees, we limited the scope of our review to
(1) identifying current recordkeeping requirements and (2)
determining the views of federal government and financial industry
officials on the need for additional recordkeeping requirements for
financial institutions issuing cashier's checks. 

To familiarize ourselves with how cashier's checks are issued and to
identify recordkeeping and reporting requirements imposed on
financial institutions issuing cashier's checks, we reviewed
pertinent provisions of the Bank Secrecy Act, relevant federal rules
and regulations, and published material such as financial and legal
industry reports on BSA compliance.  We also interviewed officials
from the Department of the Treasury's Financial Crimes Enforcement
Network and IRS' Criminal Investigation Division (CID) to obtain
their views on the level of compliance with these requirements and
the need for additional requirements. 

We obtained the views of the Senior Federal Counsel on Government
Relations and Retail Banking of the American Bankers Association on
the cost and impact of current, previous, and proposed recordkeeping
and reporting requirements for cashier's checks.  We also discussed
the use of these logs by law enforcement officials and obtained the
American Bankers Association's views on whether additional
recordkeeping and reporting requirements for cashier's checks are
needed. 

We met with law enforcement officials of IRS' CID and the FBI's
Economic Crimes Unit to ascertain what problems, if any, they may
have with current, previous, and proposed recordkeeping and reporting
requirements.  We also discussed whether improvements are needed to
assist them in their efforts to combat the use of cashier's checks
and other monetary instruments to launder money. 

We consulted with officials from the Banking and Supervision units of
the Federal Reserve Board (FRB), Office of the Comptroller of the
Currency (OCC), and Federal Deposit Insurance Corporation (FDIC) in
Washington, D.C., to obtain their views on current, previous, and
proposed recordkeeping and reporting requirements and to identify
efforts undertaken by the banking industry to ensure compliance with
BSA and regulatory requirements.  We discussed steps taken by these
bank regulators to combat the use of cashier's checks and other
monetary instruments to launder money and reviewed relevant agency
documents relating to detecting and deterring money laundering. 

We could not address the extent to which cashier's checks have been
involved in money laundering schemes because no statistical data
existed. 

We did our review in accordance with generally accepted government
auditing standards from November 1994 through March 1995 at the
Department of the Treasury in Washington, D.C.; at IRS' CID in
Washington, D.C., and Alexandria, VA; at the FBI in Washington, D.C.;
and at various financial and regulatory organizations in Washington,
D.C. 


GUIDANCE PROVIDED BY FEDERAL BANK
REGULATORY AGENCIES AND FINANCIAL
INDUSTRY GROUPS FOR DETECTING THE
USE OF CASHIER'S CHECKS TO LAUNDER
MONEY
========================================================== Appendix II

In the absence of standard know-your-customer guidelines from
Treasury, federal bank regulators\1 have issued guidance that
addresses the importance of developing effective controls to detect
and report, among other things, the suspected use of cashier's checks
to launder money.  For example, OCC has periodically reissued a
pamphlet to national banks entitled Money Laundering:  A Banker's
Guide to Avoiding Problems.  In a June 1993 update of this pamphlet,
OCC reemphasized that know-your-customer policies are a bank's most
effective weapon against being used unwittingly to launder money. 
The OCC pamphlet stated that knowing your customers includes
requiring appropriate identification and being alert to unusual or
suspicious transactions, including those involving cashier's checks
or other monetary instruments.  The OCC pamphlet also highlighted
suspicious activities that bank employees should look for and
included a discussion of ways bank customers may attempt to avoid BSA
reporting requirements. 

In March 1991, FDIC provided guidance to state nonmember banks on
reporting suspicious transactions.  The guidance encouraged these
banks to be alert to the possibility that they may be misused by
persons who are intentionally attempting to evade the BSA reporting
requirements or who are engaging in transactions that may involve
money laundering. 

In January 1995, FRB provided guidance to its member banks outlining
the importance of know-your-customer programs and the detection and
reporting of suspicious transactions.  FRB guidance to its members
emphasized that it is imperative that financial institutions adopt
know-your-customer guidelines or procedures to ensure the immediate
detection and identification of suspicious activity at the
institution.  FRB's January 1995 guidance noted that an integral part
of an effective know-your-customer policy is to have comprehensive
knowledge of the transactions carried out by a customer in order to
be able to identify transactions that are inconsistent. 

In addition, informative publications have been issued and various
money laundering conferences and seminars have been held to discuss
new developments and changes in the oversight of criminal activities
to launder money.  These efforts have involved federal regulators,
law enforcement and financial industry groups, and trade
associations.  For example, the American Bankers Association, in
conjunction with the American Bar Association's Criminal Justice
Section, periodically holds Money Laundering Enforcement Seminars to
highlight Treasury initiatives in the money laundering area.  An
October 1994 seminar, sponsored by the American Bankers Association
and the American Bar Association, addressed a proposal for mandatory
suspicious-transaction reporting and the need for banks to develop
know-your-customer programs.  The seminar also included a discussion
on the use of monetary instruments to launder money.  The American
Bankers Association estimated that it alone had trained 75,000 to
100,000 bankers in the past 8 years through these seminars. 

The following are some examples highlighted in the guidance provided
to financial institutions of activities that might be considered
inconsistent with a customer's normal business activity: 

  an account that shows frequent deposits of large bills for a
     business that generally does not deal in large amounts of cash;

  accounts with very large volumes of deposits in cashier's checks,
     money orders, and/or wire transfers when the nature of the
     account holder's business does not justify such activity; and

  deposits of numerous checks but rare withdrawals of currency for
     daily operations. 

The following are some examples of other customer activities that may
trigger suspicious-transaction reports: 

  a reluctance on the part of the customer to produce identification
     or provide personal background information when opening an
     account or purchasing monetary instruments above a specified
     threshold,

  a customer's taking back part of the currency to reduce the
     purchase to below $3,000 after becoming aware of the financial
     institution's recordkeeping requirement, and

  a customer's coming into the same institution on consecutive or
     near-consecutive business days to purchase cashier's checks in
     amounts of less than $3,000. 


--------------------
\1 Federal bank regulators are responsible for, among other things,
ensuring that financial institutions apprise federal law enforcement
authorities of any violation or suspected violation of a criminal
statute, including money laundering. 

