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Business Law 9th Edition by Henry Cheeseman
Edition 9ISBN: 978-0134004778Business Law 9th Edition by Henry Cheeseman
Edition 9ISBN: 978-0134004778 Exercise 1
Federal Currency Reporting Law
The federal Bank Secrecy Act requires financial institutions and other entities (such as retailers, car and boat dealers, antiques dealers, jewelers, and real estate brokers) to file a Currency Transaction Report (CTR) with the Internal Revenue Service (IRS), reporting the following:
• The receipt in a single transaction or a series of related transactions of cash in an amount greater than $10,000 (daily aggregate amount). "Cash" is not limited to currency but includes cashier's checks, bank drafts, traveler's checks, and money orders (but not ordinary checks).
• Suspected criminal activity by bank customers involving a financial transaction of $1,000 or more in funds.
The law also stipulates that it is a crime to structure or assist in structuring any transaction for the purpose of evading these reporting requirements. Financial institutions and entities may be fined for negligent violations of the currency reporting requirements. Fines may be levied for a pattern of negligent violations. Willful violations may subject the violator to civil money penalties, charges of aiding and abetting the criminal activity, and prosecution for violating money-laundering statutes.
Why were the reporting requirements adopted? Do you think that many transactions are structured to avoid the reporting statute?
The federal Bank Secrecy Act requires financial institutions and other entities (such as retailers, car and boat dealers, antiques dealers, jewelers, and real estate brokers) to file a Currency Transaction Report (CTR) with the Internal Revenue Service (IRS), reporting the following:
• The receipt in a single transaction or a series of related transactions of cash in an amount greater than $10,000 (daily aggregate amount). "Cash" is not limited to currency but includes cashier's checks, bank drafts, traveler's checks, and money orders (but not ordinary checks).
• Suspected criminal activity by bank customers involving a financial transaction of $1,000 or more in funds.
The law also stipulates that it is a crime to structure or assist in structuring any transaction for the purpose of evading these reporting requirements. Financial institutions and entities may be fined for negligent violations of the currency reporting requirements. Fines may be levied for a pattern of negligent violations. Willful violations may subject the violator to civil money penalties, charges of aiding and abetting the criminal activity, and prosecution for violating money-laundering statutes.
Why were the reporting requirements adopted? Do you think that many transactions are structured to avoid the reporting statute?
Explanation
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"Currency transaction report" (CTR):
Th...
Business Law 9th Edition by Henry Cheeseman
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