Options for MO's
May 28, 2019, 12:28 am
#17
Join Date: Apr 2018
Posts: 50
MOs have no parentage. What I mean is that there is no way to trace the source of funds used to purchase the MO so the bank has no idea where the funding source arose.
This means that unless they know the depositor very well, there is no assurance that the depositor is not participating in ML activity. No bank is going to tolerate the liability that will accrue to them if they are found to be laundering money.
So, any behavior that even hints at ML is going to be evaluated closely and tossed if judged to be risky.
This means that unless they know the depositor very well, there is no assurance that the depositor is not participating in ML activity. No bank is going to tolerate the liability that will accrue to them if they are found to be laundering money.
So, any behavior that even hints at ML is going to be evaluated closely and tossed if judged to be risky.
In theory, I can walk into my bank and deposit with $75k cash /month with little issue. Cash has far less "parentage" than money orders. I can claim the cash is from any difficult to verify source.
Money orders have a receipt that includes the name of the vendor, address of vendor, cashier's name, amount, date, debit card's number, other trace and reference numbers. The money orders' stub includes the serial number and other trace information that binds it with vendors' receipts. The gift cards used to the buy the money order also had receipts when, presumably, the OP used their credit card to buy the gift card.
The parentage would look like this OP's credit card ==> buys gift card ==> gift card buys money order ==> deposits money order into financial institute.
Each step there is a paper trail of receipts and records proving and verify that the money is clean and not involved into any thing illegal. If the motivating fear is money laundering then shouldn't the government and banks encourage to use of money orders since they provide an traceable paper trail? Am I wrong?
It is most likely more expedient for the financial institution to drop a customer, than deal with more government imposed scrutiny that may come with having a customer deposit $75k in money orders a month.
May 28, 2019, 4:40 pm
#18
Join Date: Apr 2013
Posts: 584
Back when I was high volume, and BofA shut me down, I went a little over the top, and opened up 6 new checking accounts and spread the MOs around. 2 of the accounts quickly shut me down, but I had no issues at the other. Open up a few different accounts. You can probably scale pretty quickly at big banks (WF, TD, PNC) without huge risk.
May 29, 2019, 2:15 pm
#19
Join Date: Mar 2005
Programs: Continental Onepass, Hilton, Marriott, USAir and now UA
Posts: 6,438
I don't doubt what you wrote is true to the best of your knowledge but this financial institutes' rational always came across to me as insane troll logic (warning Tvtropes.org ).
In theory, I can walk into my bank and deposit with $75k cash /month with little issue. Cash has far less "parentage" than money orders. I can claim the cash is from any difficult to verify source.
Money orders have a receipt that includes the name of the vendor, address of vendor, cashier's name, amount, date, debit card's number, other trace and reference numbers. The money orders' stub includes the serial number and other trace information that binds it with vendors' receipts. The gift cards used to the buy the money order also had receipts when, presumably, the OP used their credit card to buy the gift card.
The parentage would look like this OP's credit card ==> buys gift card ==> gift card buys money order ==> deposits money order into financial institute.
Each step there is a paper trail of receipts and records proving and verify that the money is clean and not involved into any thing illegal. If the motivating fear is money laundering then shouldn't the government and banks encourage to use of money orders since they provide an traceable paper trail? Am I wrong?
It is most likely more expedient for the financial institution to drop a customer, than deal with more government imposed scrutiny that may come with having a customer deposit $75k in money orders a month.
In theory, I can walk into my bank and deposit with $75k cash /month with little issue. Cash has far less "parentage" than money orders. I can claim the cash is from any difficult to verify source.
Money orders have a receipt that includes the name of the vendor, address of vendor, cashier's name, amount, date, debit card's number, other trace and reference numbers. The money orders' stub includes the serial number and other trace information that binds it with vendors' receipts. The gift cards used to the buy the money order also had receipts when, presumably, the OP used their credit card to buy the gift card.
The parentage would look like this OP's credit card ==> buys gift card ==> gift card buys money order ==> deposits money order into financial institute.
Each step there is a paper trail of receipts and records proving and verify that the money is clean and not involved into any thing illegal. If the motivating fear is money laundering then shouldn't the government and banks encourage to use of money orders since they provide an traceable paper trail? Am I wrong?
It is most likely more expedient for the financial institution to drop a customer, than deal with more government imposed scrutiny that may come with having a customer deposit $75k in money orders a month.
Your first incorrect assumption is that someone depositing $75K/month in cash isn't going to attract the compliance officers at any bank is, I guess, an example of insane troll logic. I can assure you that such behavior will be front and center in their sights, and they will be asking tons of questions as to the parentage of that cash. And once they are done, then the next group will be the Feds. And I can tell you that the person/s who are participating in such behavior better have good explanations of where that cash is coming from. As long as the source is legit (for example, you own 5 laundromats and deal only in cash) and the bank can assure itself of its origin, then things will be okay, but highly monitored.
On the other hand, no matter what the explanation is for depositing $75K/month in MOs (unless you have a strange business that accepts only MO), no bank compliance office is gong to tolerate the workload generated by some individual who is depositing a ton of MOs in the bank and then pulling cash out immediately thereafter. And you specifically, in your post, described the work necessary to verify the parentage of each MO. I am certain that if you were told to do that volume of work for no return, you would throw the depositor out the door as well.
Finally, the consequences of messing up are draconian.
May 31, 2019, 11:25 pm
#20
Original Poster
Join Date: May 2008
Location: PHL (kinda, no airport is really close)
Programs: AA Exp, but not sure for how long. Enterprise Platinum woo-hoo!
Posts: 4,550
I had a $10K CD at this bank (that was one of their conditions for allowing me to have the account) and I had started keeping a $10K+ balance in a very low/no interest checking account.
The next bank I tried, after a week or so closed my account, and the compliance officer called me and told me that when they closed my account they'd send me a check, and if any of the MO's bounced I'd have to make up the difference (huh?) and if I didn't make up the difference quickly they'd file a police report. I felt like I was speaking Russian with a Nigerian accent. They could only see me as a possible/likely scammer.
I have opened 4 checking accounts so far and am starting each with a small amount of cash and then a $1K money order. It will take me a few weeks but I'm going to link them up with my regular bank account (actually it's with a large national brokerage) and EFT money into each one each month and use it to pay some of my bills, then once that looks kinda normal, start ramping up the MO's slowly. Also I'm using MO's to pay some of the credit card bills directly, without going over-the-top in any of those.
The next bank I tried, after a week or so closed my account, and the compliance officer called me and told me that when they closed my account they'd send me a check, and if any of the MO's bounced I'd have to make up the difference (huh?) and if I didn't make up the difference quickly they'd file a police report. I felt like I was speaking Russian with a Nigerian accent. They could only see me as a possible/likely scammer.
I have opened 4 checking accounts so far and am starting each with a small amount of cash and then a $1K money order. It will take me a few weeks but I'm going to link them up with my regular bank account (actually it's with a large national brokerage) and EFT money into each one each month and use it to pay some of my bills, then once that looks kinda normal, start ramping up the MO's slowly. Also I'm using MO's to pay some of the credit card bills directly, without going over-the-top in any of those.
Jun 1, 2019, 9:03 am
#21
Join Date: Oct 2013
Posts: 1,322
@redtop43 -- Thanks for sharing your plan & experience.
Personally, I would NOT go down the "pay CC stmt w/ MO" route. I can live with a deposit account shutdown, but risking shutdown of a good CC is too much risk for me.
Also: In addition to mix of activity you describe, maybe consider periodically CASHING some MOs at the bank where you have the high dollar relationship, then depositing that cash at another bank. To completely avoid any accusation of structuring, you could even accumulate & deposit $10k cash and happily complete the CTR (or bring one already filled-out). Brain-dead bank compliance officers may possibly better understand cash deposits (with CTR reporting) than MOs. Note that CTR doesn't require explanation of source of funds, just occupation of customer.
Personally, I would NOT go down the "pay CC stmt w/ MO" route. I can live with a deposit account shutdown, but risking shutdown of a good CC is too much risk for me.
Also: In addition to mix of activity you describe, maybe consider periodically CASHING some MOs at the bank where you have the high dollar relationship, then depositing that cash at another bank. To completely avoid any accusation of structuring, you could even accumulate & deposit $10k cash and happily complete the CTR (or bring one already filled-out). Brain-dead bank compliance officers may possibly better understand cash deposits (with CTR reporting) than MOs. Note that CTR doesn't require explanation of source of funds, just occupation of customer.
Jun 5, 2019, 11:43 am
#22
Join Date: Apr 2018
Posts: 50
I did warn you!
I stand corrected.
Your first incorrect assumption is that someone depositing $75K/month in cash isn't going to attract the compliance officers at any bank is, I guess, an example of insane troll logic. I can assure you that such behavior will be front and center in their sights, and they will be asking tons of questions as to the parentage of that cash. And once they are done, then the next group will be the Feds. And I can tell you that the person/s who are participating in such behavior better have good explanations of where that cash is coming from. As long as the source is legit (for example, you own 5 laundromats and deal only in cash) and the bank can assure itself of its origin, then things will be okay, but highly monitored.
On the other hand, no matter what the explanation is for depositing $75K/month in MOs (unless you have a strange business that accepts only MO), no bank compliance office is gong to tolerate the workload generated by some individual who is depositing a ton of MOs in the bank and then pulling cash out immediately thereafter. And you specifically, in your post, described the work necessary to verify the parentage of each MO. I am certain that if you were told to do that volume of work for no return, you would throw the depositor out the door as well.
Finally, the consequences of messing up are draconian.
On the other hand, no matter what the explanation is for depositing $75K/month in MOs (unless you have a strange business that accepts only MO), no bank compliance office is gong to tolerate the workload generated by some individual who is depositing a ton of MOs in the bank and then pulling cash out immediately thereafter. And you specifically, in your post, described the work necessary to verify the parentage of each MO. I am certain that if you were told to do that volume of work for no return, you would throw the depositor out the door as well.
Finally, the consequences of messing up are draconian.