The bit you’re missing is that the drug dealer buys, say $10K of chips with cash, gambles $20 and loses, then takes chips back to the cage and gets $9,9980 back. No winnings, so no W-2G.
If he takes his money back in cash he’s accomplished nothing but spend $20 & maybe get a watered drink; he’s still got dirty cash. If he takes it as a check, it’s now (at least at the first level) legit funds he acquired legitimately: clean money.
I say “first level” because if a drug dealar ends up depositing check after check from casinos with few or no W2-Gs for any of it because he rarely or never wins (just like everybody else in a casino) that in itself will look odd to any investigator that bothers to look. It isn’t evidence of crime, but it’s a strong hint that further digging will find a crime. It’s smoke, not fire.
My late first wife was a banking attorney. CTRs are a daily experience at most bank branches. And a ~monthly issue for her.
The purpose of the law requiring CTRs is to establish a paper trail on large-ish cash deposits. They’re an imperfect tool to be sure. But the idea is to make it that much harder for somebody who routinely comes into large sums of cash and wants to run them through the legit banking system to avoid leaving a wide paper trail leading back to their door.
Somebody who owns a legit retailer that does a lot of cash business, e.g. a big grocery store, has zero concern about leaving that paper trail. Someone like yourself, whose side business may in a good week sell over 10 grand of legit merchandise in cash, also has zero concern. Someone whose cash sources are less legit or fully illegal is violently allergic to leaving that same paper trail.
Computers at the bank and at FinCEN, the federal agency which receives CTRs, analyze them for patterns and flag the “interesting” ones for human scrutiny.
Bottom line: any single person having a single or very occasional CTR-worthy deposit means nothing in terms of exposing yourself to government scrutiny.
As to your hypothetical of a one-time million dollar deposit, I can’t say. I can’t recall my wife ever dealing with one.
But @DrDeth is 100% correct about trying to avoid a CTR by splitting up a big cash deposit. One of the things the computer programs are aggressively looking for is evidence of exactly that. It’s easy to spot, easy to prove, and it’s specifically illegal for a reason.
Which strongly suggests the smart million dollar cash windfall person should either never deposits any of it, or deposits all of it at one go.
Nope - they would have written me a check for the whole 15K just as long as I had previously lost enough to bring my net winnings down to under 10 K
Fortunately, I knew about that. Probably from a previous discussion here. Because my husband was planning to do just that.
Sure, but they wouldn’t get in trouble with the IRS for giving me a check. They wouldn’t get any trouble for giving me a check. ( I’m actually kind of wondering how they enforce any of the IRS stuff on a foreign flagged ship that only opens the casino in international waters, but that’s a different issue). I suppose it’s possible for the casino to care about preventing money laundering but this is a kind of dumb way to do it. Because it’s not like I bought $10K worth of chips, gambled $20 and asked for a check for $9980 when i cash in. To make an analogy with chips, it’s like I bought $10K worth of chips , place a $20 bet and win $10K on a single hand of a table game. They shut down the table, take me to the cashier to fill out some paperwork and give me $10K in cash - and I still have $9980 of chips to cash in separately from being paid for the win. That’s why the money laundering angle doesn’t make sense to me - because my stake ( the money I put into the machine ) never got mixed with the winnings.
I think at this point I’m just going to figure it’s one of those things that I will never understand.
But that’s not what happened here. I presume that @doreen is not a drug dealer, but even if they were and were trying to launder drug money, in this case there was a W-2G.
In a case where a W-2G is issued, what difference does it make if a check is cut or cash is given?
Payouts in Vegas are given either in cash or check, right? If preventing money laundering were the reason, then why would casinos in Vegas, which handle far more business, give checks in cases like this?
The IRS doesn’t see CTRs. The IRS also doesn’t really care where you got money from as long as you pay appropriate taxes on it. Declare a million dollars in income, pay the tax and it’s a good bet the IRS won’t ever bother you.
What I have no clue about is how much the various federal agencies share intel. Do DEA and IRS share info about “unusual” people and returns they’ve noticed? Does FinCEN? Historically the agencies didn’t talk much, and there were (are?) lots of legal obstacles to what amounts to surveillance dragnets across the presumably-innocent populace. I don’t known how much the never-ending war on drugs and war on terrorism may have gutted those protections.
That was my guess too- some sort of internal accounting/cashiering related rules, like maybe writing a check over 10k requires a lot more paperwork than disbursing more than 10k worth of cash.
Wouldn’t matter how much you’d won and lost, as long as that final check is over 10k, they’d probably rather avoid it.
Also, could there be home-country requirements? I mean, most of those ships aren’t US registered, so the rules might be different wherever they are registered.
I’m confused about this part. Why are they deducting the amount you previously lost? They already have that money. You lost it. Then when you win, you should get what you won.
Suppose I play two hands of blackjack betting $10 each time. I lose the first $10. Then I get blackjack and the owe me $15. Why should they deduct $10 for my previous loss and pay me only $5?
They paid me all the winnings . Let’s say I put $1000 into machines from Sun to Thursday. Then on Friday , I won $18k. They subtract the $1k from 18k, That’s $17k which is more than $10k which means they wouldn’t pay me by check and instead paid me the entire amount I won ($18k) in cash.
Which doesn’t make any sense to me - I could see if they just refused to ever pay by check but this calculation makes no sense to me.
Some years ago I wrote an (unpublished) story about a modern Simon Templar-type character. Early in his career, he opened multiple current and savings accounts in different names around the country. This was back when you didn’t need to prove your identity.
He posed as a gambler when he made cash deposits and frequently wrote cheques from one account to another - gradually moving surplus cash into a central interest-bearing account.
I doubt you could do it today. There has been a scheme where criminals paid students to bank money for them. Many students were tempted by an offer to bank a few hundred for a 10% commission. Later on, they would write a cheque for the balance.
Weird. MORE paperwork for a check??? Handing out a wad of cash - less paperwork??? It would seem the opposite. A check has traceability; cash? what cash?
I’m prepared to conclude this is not typical and that either a mistake or misunderstanding occurred or there was a pressing need like an anomalous cash drop requirement or something.
I was talking about a $18K CTR. But a mill would almost certainly get you a SAR.
If the Feds think there is something suspicious, or you are gonna be audited for something else, they can call up your CTRs. Or a pattern of CTRs might be kicked out by a computer for exam by a real live person.
Well, pretty much every nation has similar money laundering laws nowadays. And yeah, CYA stuff isnt always smart.
Yes, this is the most common thing. They even showed it in a film about bank robbers.
Right. It’s not one CTR, it’s the pattern.
Money launderers want that W-2G. They can now claim they make a living gambling, instead of selling drugs.
Vegas casinos are rigorously examined by the Feds, and they have strong internal controls to prevent or report Money laundering.
Well, if you are audited, yeah, the agent gets a CTR and SAR print out.
That supposedly is why FinCEN is there, to share that info.
