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I've got a transfer limit of 1k on my account at a bank. At one point in time, I wanted to transfer a larger sum (upper 4 digit range) from this account to another account at a different bank. To work around the limit temporarily, I split the amount into multiple smaller values and transferred them independently within a few minutes.

I read that banks are using algorithms that automatically scan for this very behavior, which resembles the smurfing pattern related to money fraud. This scared me a bit, since what I did may have caused a false positive. Are there known cases of similar happenings, or do I not need to worry?

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    I am surprised that it is not a daily limit. How much would it cost to do a wire transfer? Is the hassle even worth it? (Nevermind the worries reagrding the false-positive.) – George Marian Nov 16 '10 at 15:53
  • Actually it is a daily limit and wire transfer. Wire transfer is not bound to costs per transactions for me. – mafu Nov 17 '10 at 10:14
  • If the electronic transfer has a daily limit that low and is free, it probably isn't a wire transfer, but an ACH transaction. ACH is basically a check and takes a couple of days to settle. Wire transfers usually cost $20 or more and settle in minutes. – duffbeer703 Nov 17 '10 at 18:46
  • @duff: Oh, I see. Yes, definitely not wire transfer then. It takes about 2 days usually (and is free). I believe it is called giro transfer in English, which should be equivalent to ACH transfer. – mafu Nov 18 '10 at 22:22
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The banks are required to file Currency Transaction Reports (CTR) to the IRS for aggregate transfers of over $10k. They file Suspicious Activity Reports for suspicious activity with an aggregate value of over $5,000 to the US Treasury.

You're probably ok for what you're doing provided you aren't doing to regularly, but I would consider looking into alternate means of transferring funds such as a check to avoid the appearance of impropriety. Also, you should be able to call your bank to do a one time ACH transfer for up to $100k with minimal fees.

  • I once asked (for Germany) and was told that transfers between accounts of the same account holder are usually not considered suspicious. – cbeleites May 1 '13 at 13:15
  • I know this was written a long time ago but CTRs are for cash transactions. It is part of an accounting firewall between the electronic system and the cash system. CTR nor structuring to get around CTR would apply to this scenario. SARs are practically only filed by tellers, so again why would you even be talking to a teller moving money between accounts at different institutions? Use the online system or write a check. – CQM May 2 '13 at 1:02
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There are two (main) ways of transferring large sums of money between banks in such a situation.

1) Have your bank mail a cashier's check. They may or may not charge you for this (some banks charge up to $6, the bank I work at doesn't charge at all). You have to wait for the check to go through the mail, but it usually takes just a few days.

2) Wire the money. This could cost $50 or more in combined fees (usually around $30 to send and $20 to receive), but you get same day credit for the funds.

The limits to online transfers are in place to protect you, so that if someone gets into your account the amount of damage they can do is limited. If you need those limits lifted temporarily, check with your bank about doing so - they may be willing to adjust them for you for a brief period (a day or two).

  • (see comment to OP) – mafu Nov 17 '10 at 10:15
  • I can set my transfer limit, either by calling the bank and telling that I'm planning to do a bigger transfer at a given date. Or by changing it online (then it will not take effect for another day). With this I regularly have much lower limits set, and put them up when a big transfer is needed, and back to the lower limit right thereafter. – cbeleites May 1 '13 at 13:17
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I know of at least one case where a person was convicted of "structuring". The person was depositing his own money into his own bank account and was found guilty of "structuring" since he made several deposits under $10K. The man did nothing illegal. He just felt it was safer to make several small deposits instead of one large deposit.

From the article:
Prosecutors did not offer evidence of any other motive for Gaskins' behavior. They said at trial that Gaskins should have known better. "The point of the law is to make sure we don't have people who try to fool the bank," federal prosecutor Randall Galyon told jurors last week. "The fact that he was trying is against the law."

The law states the bank has to report any transactions over $10K so the government can investigate any suspicous monetary activity. Of course, if you make several deposits under $10K you'll also be investigated and you could actually be breaking "intent" of the law for depositing your own money into your own bank account.

  • could you quote this? Prosecutors did not offer evidence of any other motive for Gaskins' behavior. They said at trial that Gaskins should have known better. "The point of the law is to make sure we don't have people who try to fool the bank," federal prosecutor Randall Galyon told jurors last week. "The fact that he was trying is against the law." -- i find this scary. – mafu Nov 17 '10 at 10:11
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    Whoops... that was 3 felony offenses per DAY. amazon.com/Three-Felonies-Day-Target-Innocent/dp/1594032556/… – duffbeer703 Nov 17 '10 at 23:50
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    @mafutrct: The point is that a single anecdote is meaningless with respect to the question, as justice isn't exactly fair for these matters. The prosecution probably had more to do with the defendant's defense of drug kingpins and cop killers, and the legalities of accepting unverifiable payments from these clients. Also, in this anecdote, the defendant deposited over $450k in increments under $10k, likely over the course of months or years. That is materially different than the scenario presented by the question. – duffbeer703 Nov 18 '10 at 21:24
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    -1 because this has nothing to do with the question, and is even misleading in this context. There is a big difference between tranfering money between two bank accounts of the same holder and paying large sums of cash into an account. Legal differences of course depend on the country. But in the case of account-to-account transfer, the origin of the money is usually considered known. With large sums of cash being paid in, you may have to prove that this money is legally yours, all taxes have been declared and paid, etc. And it may be forbidden to do anything to avoid these questions. ... – cbeleites May 1 '13 at 13:29
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    ... According to the linked article, this seems to have been the illegal part. So @Muro, please correct your answer. As for the case, I think it is a valid question why Gaskin didn't contact IRS (or his bank manager) telling that he planned to pay in a large amount of cash, but for fear of being robbed on the way would split the payments into small chunks. Or instead of making all payments "just below" the reporting threshold, made them just above - then noone could have argued about avoiding IRS' questions, and the increase in risk would have been small. – cbeleites May 1 '13 at 13:45

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