Which of the following customers may be engaging in structuring?
A. Bailey withdraws $5,000 from her savings account to make a loan payment.
B. Eric makes cash deposits of $9,900 every week for a month.
C. Karen makes two cash deposits totaling $3,000 in one week.
D. Paul receives a $12,000 wire transfer to his money market account.
Answer (2)
Structuring involves breaking up large transactions to avoid detection.
Eric's weekly deposits of $9,900 are just below the reporting threshold.
This pattern strongly suggests an attempt to avoid triggering reporting requirements.
Therefore, Eric is most likely engaging in structuring: B .
Explanation
Analyze the problem We need to determine which of the given scenarios suggests that a customer is breaking up large transactions into smaller ones to avoid detection, which is known as structuring.
Evaluate Option A Bailey withdraws $5,000 from her savings account to make a loan payment. This is a single transaction and does not suggest structuring.
Evaluate Option B Eric makes cash deposits of $9,900 every week for a month. Depositing just under the $10,000 reporting threshold each week strongly suggests an attempt to avoid triggering a mandatory reporting requirement.
Evaluate Option C Karen makes two cash deposits totaling $3,000 in one week. This amount is relatively small and does not indicate structuring.
Evaluate Option D Paul receives a $12,000 wire transfer to his money market account. This is a single transaction and does not suggest structuring.
Conclusion Based on the analysis, Eric's behavior is the most indicative of structuring.
Examples
Structuring is a technique used to avoid detection by breaking up large transactions into smaller ones. For example, if someone wants to deposit $50,000 into a bank account without triggering a report to authorities, they might make five separate deposits of $9,900 each. This way, each deposit falls below the $10,000 threshold that usually requires reporting. Understanding structuring helps banks and regulatory agencies identify and prevent illegal activities like money laundering.
Eric's behavior of making weekly cash deposits of $9,900 suggests he is engaging in structuring to evade detection, as this amount is just below the $10,000 reporting threshold. Therefore, the most likely choice indicating structuring is option B. Bailey, Karen, and Paul do not exhibit behaviors that suggest structuring.
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