Filing a Suspicious Transaction Report (STR) – Important Fact to Include
Question
A customer has held an account at a bank and has lived locally for over 25 years. Historically he has come into the bank monthly to deposit a $1,500 retirement check from the company where he worked. He is well known at the bank and often brings the staff cookies. Over the past four months, he has come into the bank every Monday, Wednesday, and Thursday to make $3,000 cash deposits into his account. A review of his account shows that an $8,500 check made out to cash clears his account each week. The bank has decided to file a suspicious transaction report (STR).
What is the important fact to include in the STR?
Answers
Explanations
Click on the arrows to vote for the correct answer
A. B. C. D.B
The important fact to include in the suspicious transaction report (STR) in this case is:
A. The recent change in the timing of deposits and withdrawals in the account
Explanation:
The given scenario presents several factors that could raise suspicions of money laundering or illicit activity. The customer's historical behavior, characterized by monthly deposits of a $1,500 retirement check from his former employer, does not seem unusual or suspicious. However, the recent change in the customer's deposit pattern, where he has started making frequent $3,000 cash deposits every Monday, Wednesday, and Thursday, is a significant deviation from his previous behavior. This sudden change in deposit frequency and the use of cash deposits are red flags that warrant further investigation.
Money launderers often attempt to avoid detection by altering their transaction patterns. In this case, the customer's regular retirement check deposits have been replaced by large cash deposits, which may indicate an attempt to mix legitimate funds with illicit funds or to structure transactions to avoid reporting requirements.
While the other answer choices contain relevant information, they are not as directly related to the suspicious activity as the recent change in deposit patterns. Let's briefly examine them:
B. The customer's work history and the amount of his monthly retirement check: Although this information provides context about the customer's background, it does not directly address the suspicious activity in question. The focus of the STR should be on the recent change in deposit behavior rather than the customer's work history.
C. The fact that the account holder is well known to the bank staff: While it's worth mentioning that the customer is well known to the bank staff, this alone does not indicate whether the recent deposit pattern is suspicious or not. The familiarity of the customer with the bank staff might help in assessing his credibility, but it does not provide sufficient information to conclude whether the transactions are legitimate or potentially illicit.
D. The fact that the customer has lived in the area and has banked at this bank for 25 years: This information establishes the long-standing relationship between the customer and the bank. However, it does not address the recent change in deposit behavior, which is the primary concern in this scenario. While long-standing customers may be considered lower risk, it does not automatically eliminate the possibility of suspicious activity.
In summary, the recent change in the timing of deposits and withdrawals in the account is the most important fact to include in the suspicious transaction report (STR) because it represents a significant deviation from the customer's historical behavior and raises suspicions of potential money laundering or illicit activity.
