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An elderly relative has been hoarding cash for many years, due to a distrust of financial institutions. Whenever his (multiple) pensions have been paid in, he withdraws most of it in cash and stores it in envelopes in a safe.

As a result, he now has around £30,000 in cash stored in this way. The cash is almost entirely in £20 notes — the older version which has been replaced and will be going out of circulation in the next year or two.

If we can convince him to pay the cash (at least temporarily) into his bank account, is there a danger of the family getting embroiled in a money laundering investigation? If so, what is the best way of minimising this risk?

The relative in question also does not believe in online or telephone banking, if this makes a difference to suggested possibilities. He is infirm but not housebound; and eccentric but mentally and legally competent.

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    I would call your bank and get their advice. You haven't done anything wrong, and you have a good explanation so it doesn't seem like a big deal.
    – minou
    Commented Sep 18, 2020 at 12:51
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    Actually @gaefan I would urge to NOT do that. It will simply draw attention, to what should be a normal transaction. (To make a bad analogy, I would not specifically ask a policeman, if, I should not speed on a certain road :) )
    – Fattie
    Commented Sep 18, 2020 at 13:17
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    Not sure about the UK, but in the US trying to avoid attention (even if not guilty of something else) is it's own crime. Personally, I would take all of the money to a bank, and then ask to change it for larger notes. Give the money back to your relative, let him put it back under the bed.
    – jmoreno
    Commented Sep 18, 2020 at 19:25
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    Note there are now 3 modern versions of the £20. The Elgar note, withdrawn ~10 years ago, the Adam Smith, withdrawal TBC, and the Turing, polymer note, introduced recently. The Bank of England will always exchange old (and even damaged) notes. With other banks your mileage may vary. See bankofengland.co.uk/banknotes/exchanging-old-banknotes
    – Tim
    Commented Sep 18, 2020 at 19:35
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    Simply turning up at a UK bank with £20k in cash which you don't even want to deposit in an account is guaranteed to attract attention. Most UK banks require advance notification of any cash withdrawal of more than £2,500 from an account, simply to ensure they have the cash available when required. Splitting a larger transaction into multiple smaller ones in a short time period will also probably be picked up by their anti-fraud software. You will certainly need to take sufficient personal ID, and have your own personal account with the bank.
    – alephzero
    Commented Sep 18, 2020 at 19:40

3 Answers 3

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is there a danger of the family getting embroiled in a money laundering investigation

  1. It is perfectly OK to deal in cash, so long as it is legitimate.

  2. Unfortunately, the fact is it is possible "questions will be asked".† It is unlikely, but, possible. This is in the UK, 2020, with the specific amount discussed.

  3. IF "questions are asked" you are totally, completely, absolutely, 100% in the clear and normal and will face no problems. You will just state "Grandpa hoarded cash."

You will NOT be "embroiled in a money laundering investigation". You MAY get asked one simple question, with no consequences or problems arising.

It's an unfortunate reality of the modern world that in most jurisdictions, the fact is you can occasionally "get asked about" cash transactions. (Whether by the bank due to KYC, the relevant authorities, or the bank at the behest of the authorities.)

This is absolutely unavoidable, unfortunately.

It's just like, say, you will occasionally be random tested for drunk driving.

In your situation you MUST take the cash to deposit it, so, it is unavoidable - you should proceed.

It is completely normal that (unfortunately) you may be queried on it, but, it's totally and completely OK - like being randomly tested for drunk driving.

† For example, in France once, the bank (at the behest of the relevant authorities) "pulled me up" and asked why the hell I was withdrawing so much cash. The reason was legitimate and simple, to buy antiques, so - no issue.

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    It would be useful to back this up with some concrete information about the UK, e.g. the law or how this is approached in practice.
    – Ganesh Sittampalam ♦
    Commented Sep 18, 2020 at 15:56
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    "In your situation you MUST take the cash to deposit it" what's wrong with keeping cash out of the banks?
    – Adam Barnes
    Commented Sep 18, 2020 at 22:22
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    I would also add that the bank doesn't really care (nor has the authority to verify) if you're a criminal or an average Joe who's hoarding cash. Their only job is to get you to fill out a form and then forward it to the government. What they do with this information is up to them, but for merely 30k they're extremely unlikely to bother.
    – JonathanReez
    Commented Sep 18, 2020 at 23:46
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    @AdamBarnes Something must be done with the cash because soon it won't be possible to spend it, if I understood OP correctly.
    – Anton Sherwood
    Commented Sep 19, 2020 at 2:41
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    I guess you don't need to worry about 'civil forfeiture' in the UK?
    – Spehro 'speff' Pefhany
    Commented Sep 19, 2020 at 5:19
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So, this is all a game of psychology. Banks do not actually care about source of cash, they care about - in decreasing order - their relationship with their government of the nation they operate in, the network of banks they have to also rely on interaction with, and some foreign governments like the US or EU.

Some banks are more well connected and do not actually care about their relationship with their government, as absolutely nothing will change that relationship. You can tell in their behavior, the outcome of any regulatory action or sanction, the pattern of settlements and repeated behavior.

Knowing this psychology, you can understand the nature of the questions they will ask you. Some banks are going through the motions and are simply looking for you not to give them an excuse to flag a transaction. They don't care about the answer, they just care about the wrong answer. They are simply looking for you to become uncomfortable, unforthcoming, too vague, or saying illegal drugs.

Your answer is simply "pension payments withdrawn and held in cash". Under actual scrutiny there would be proof of this, and the imagined ability to present proof is good enough for banks to feel like they have checked the box of compliance.

They don't care about the source of your bag full of one thousand five hundred £20 notes, as long as you tell them a source. But always be prepared to corroborate that source.

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  • This is all completely correct
    – Fattie
    Commented Sep 21, 2020 at 10:20
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    @Fattie nice, my answer was one day before the Fincen files came out, perfect timing in helping people understand this concept
    – CQM
    Commented Sep 21, 2020 at 19:04
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Whenever his (multiple) pensions have been paid in, he withdraws most of it in >cash and stores it in envelopes in a safe."

You (or the bank) will have records of these withdrawals which should corroborate the source of the money if you are asked to prove it.

I suspect any attempts to obfuscate what you're doing will merely draw more attention.

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