What Are Red Flags for Money Laundering in Currency Exchanges and Other Currency Transactions?

Certain transactions may be red flags for money laundering. Our Compliance Question of the Week shares some examples.

Money Laundering Red Flags, Currency Exchanges and Other Currency Transactions

This article lists various transactions and activities that may indicate potential money laundering. While not all-inclusive, the list does reflect ways that launderers have been known to operate. Transactions or activities listed here may not necessarily be indicative of money laundering if they are consistent with a customer’s legitimate business. Also, many of the “red flags” involve more than one type of transaction.

Unusual exchange of denominations. An individual or group seeks the exchange of small denomination bills (five, ten and twenty dollar bills) for large denomination bills (hundreds dollar bills), without any apparent legitimate business reason.

Check cashing companies. Large increases in the number and/or amount of cash transactions for check cashing companies.

Unusual exchange by a check cashing service. No exchange or cash-back for checks deposited by an individual who owns a check cashing service can indicate another source of cash.

Suspicious movement of funds. Suspicious movement of funds out of one bank, into another bank, and back into the first bank can be indicative of money laundering.

Related Links:

FFIEC Red Flags

 

Questions? Contact the Compliance Hotline: 1.800.546.4465, [email protected].