ATM transactions are ideal for money laundering because launderers can use an account in the U
ATM transactions are ideal for money laundering because launderers can use an account in the U.S. to deposit funds within the U.S. and have another person withdraw (i.e. domestic terrorist) them outside the country. Risk with ATMs involves verifying the identity of an individual for customer that may be out of the financial institutions targeted area. Transactions are usually instantaneous and the destination of cash is difficult to trace, especially for individuals smuggling funds to offshore accounts.
ATM transactions are a risk for "micro-structuring" which is the same as structuring, except that it is done at a much smaller level. Instead of taking $18,000 and breaking it into two deposits, the micro-structurer might break it into 20 deposits of approximately $900 each. This level of structuring makes it extremely difficult to detect.
FinCEN particularly notable element among the identified bank filings involved the use of ATMs located outside of the United States to make large withdrawals of currency, sometimes during short, concentrated windows of time. Such filings underscore the potentially elevated risk associated with prepaid cards that support international ATM cash withdrawal access, a key element of the risk-based approach of FinCEN.
Red flags to consider:
The velocity of funds in the account or, in the case of ATMs, the number of debit cards associated with the account.
Accounts that are opened without face-to-face contact may be a higher risk for money laundering and terrorist financing.
Another common red flag is smurfing with ATM cards. Clients can use checking accounts for receiving/depositing cash deposits in amounts under $1,000 as infrequently as several times per month. These deposits may be followed by ATM withdrawals in foreign countries use to purchase illicit goods.
Due to the above factors, ATM behavior is risk scored as a transaction category. Customers with brokerage relationships that utilize their
ATM transactions are a risk for "micro-structuring" which is the same as structuring, except that it is done at a much smaller level. Instead of taking $18,000 and breaking it into two deposits, the micro-structurer might break it into 20 deposits of approximately $900 each. This level of structuring makes it extremely difficult to detect.
FinCEN particularly notable element among the identified bank filings involved the use of ATMs located outside of the United States to make large withdrawals of currency, sometimes during short, concentrated windows of time. Such filings underscore the potentially elevated risk associated with prepaid cards that support international ATM cash withdrawal access, a key element of the risk-based approach of FinCEN.
Red flags to consider:
The velocity of funds in the account or, in the case of ATMs, the number of debit cards associated with the account.
Accounts that are opened without face-to-face contact may be a higher risk for money laundering and terrorist financing.
Another common red flag is smurfing with ATM cards. Clients can use checking accounts for receiving/depositing cash deposits in amounts under $1,000 as infrequently as several times per month. These deposits may be followed by ATM withdrawals in foreign countries use to purchase illicit goods.
Due to the above factors, ATM behavior is risk scored as a transaction category. Customers with brokerage relationships that utilize their