What is 'Structuring' and How do Banks Detect This Form of Money Laundering?

Mar 12, 2008, 01:00 ET from Fortent

    NEW YORK, March 12 /PRNewswire/ -- A commonly-used form of money
 laundering called "structuring" has recently emerged in the news.
     Dr. Michael Recce, Chief Scientist at Fortent, the risk and compliance
 technology and information company, explains: "Structuring is a favorite
 method used by money launderers to attempt to avoid detection.
     "Due 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. So in order to get around these requirements, an individual
 could 'structure' 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
 banks' compliance departments.
     "Divided transactions raise suspicion levels, and banks have systems in
 place to detect just this sort of criminal behavior."
Common signs of structuring, says Dr. Recce, include: 1. Movement of cash in multiple transactions under $10,000 -- "Obviously, not every transaction of under $10,000 is suspect, but if banks see a pattern of cash movement to the same account when it doesn't seem to make sense, this raises red flags." 2. Attempts to take sender's name off wire transfers -- "If you have nothing to hide, why would you try to conceal your transactions?" 3. Large cash deposits made to ATMs -- "Most people deposit checks, not cash, into ATMs, so banks' systems tend to raise red flags for these types of transactions." "To detect structuring," says Dr. Recce, "anti-money laundering systems, such as Fortent'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." If you would like more information about structuring, or to speak with Dr. Recce, please contact Suzanne Oaks or Davia Temin of Temin and Company, at 212-588-8788 or news@teminandco.com. About Fortent Fortent provides risk and compliance solutions to financial institutions, government agencies, and individuals in more than 100 countries. With advanced systems endorsed by the American Bankers Association, Fortent's market-leading technology, information, and training businesses help clients fight financial crime and achieve regulatory compliance throughout their global operations.

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