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[Jeremy Portzer <jeremyp AT pobox.com>]

On Fri, 2003-12-19 at 12:07, Scott Lundgren wrote:
> I just called my bank to cancel an extra ATM card they sent and as part of
> the identity verification process (name, account #, DOB, SSN) the customer
> service rep asked "as part of the Patriot Act, are you a US citizen?"
> 
> Of course when I asked for what part of the act the bank was complying with
> the rep didn't know. I know there were extra know-your-customer regulations
> that were in the Patriot Act, but does anyone know what specific regulation
> from the Patriot Act a bank would fall under for such a routine transaction
> ?

I work part-time in a grocery store.  One of the services we offer is
MoneyGram wire transfers (competitor to Western Union).  When you
transfer $10,000 or more, or do anything involving $10K or more of cash,
you have to fill out a bunch of forms documenting exactly where the cash
came from, what its purpose is, etc.  This is not a new thing; these
rules were passed under previous anti-drug laws.

As part of the USA PATRIOT Act, a number of new rules came down about
detecting "structured" transactions.  Structured transactions are ways
that people may try to avoid the $10K limit.  For example, if you
someone comes in and makes a transfer of $9500, and then someone else
comes in and transfers $9500 5 minutes later, you are supposed to assume
that they are related to each other (assuming this is not a normal
business pattern).  Or if someone comes in one per day for several days
in a row and transfers large amounts sequentially.  Any such suspicious
transactions have to be reported to the Dept. of Homeland Security with
special forms.  I think part of these forms involves trying to determine
if the participants are US Citizens or not, which might be related to
why your bank was asking.

Because we have multiple shifts operating our customer service desk, we
may not recognize structured transactions if the "customer" (assumed
criminal) tries to come in at different times of day.  Therefore, we
have a detailed logbook for large transactions, so that subsequent
clerks can try to detect these structured transactions.  Note that as a
grocery store, all we do when these transactions are suspected is to
fill out forms and report them indirectly -- it's not like we
immediately call the police or something.  But it's still a little
chilling.

We have a booklet of about 25-30 pages all about compliance with the USA
PATRIOT act as it relates to MoneyGram.  And one of the things that is
mentioned several times in the book is to call MoneyGram for assistance
if there are questions -- i.e., the situation is so complex that even
this booklet cannot cover all the contigencies.

Incidentally, one of the things Rush Limbaugh has been accused of,
related to his abuse of prescription drugs, is structuring transactions
by moving around amounts of cash just under $10K.  He said on his show
in that in the future he will only move cash in amounts OVER $10K from
now on, so that all the required reports WILL be filled out, and
therefore the intentions more obvious.  Personally I don't see why he
can't just write a check ... the whole thing still sounds fishy.

This information provided to you at a fee of less than $10,000, so
YMMV.  :-)

Jeremy Portzer

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| Jeremy Portzer        jeremyp AT pobox.com      trilug.org/~jeremy     |
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