MONEY LAUNDERING RED FLAGS

WIRE TRANSFERS

This document 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.

1. Wire transfer to bank secrecy haven countries. Transfers to well known “secrecy

havens.”

1. Incoming/Outgoing wire transfers with instructions to pay upon proper

identification. The instructions to the receiving bank are to “pay upon proper

identification.” If paid for in cash, the amount may be just under $10,000 so no

Currency Transaction Report is required. The purchase may be made with numerous

official checks or other monetary instruments. The amount of the transfer may be

large, or the funds may be sent to a foreign country.

1. Outgoing wire transfers requested by non-account holders. If paid in cash, the

amount may be just under $10,000 to avoid a Currency Transaction Report.

Alternatively, the transfer may be paid with several official checks or other monetary

instruments. The funds may be directed to a foreign country.

1. Frequent wire transfers with no apparent business reason. A customer’s frequent

wire transfer activity is not justified by the nature of their business.

1. High volume of wire transfers with low account balances. The customer requests a

high volume of incoming and outgoing wire transfers but maintains low or overdrawn

account balances.

1. Incoming and outgoing wires in similar dollar amounts. There is a pattern of wire

transfers of similar amounts both in and out of the customer’s account, or related

customers, on the same day or next day. The customer may receive many small

incoming wires, and then order a large outgoing wire transfer to another city or

country.

1. Large wires by customers operating a cash business. Could involve wire transfers

by customers operating a mainly cash business. The customers may be depositing large

amounts of currency.

1. Cash or bearer instruments used to fund wire transfers. Use of cash or bearer

instruments to fund wire transfers may indicate money laundering.