Structuring Transactions

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  • #31083
    James
    Blocked

    Everyone,

    I had someone contact me about making a deposit of $15,000+. The gentleman who contacted me is self-employed and who is paid mainly in cash. He is buying a home and needs to have $15,000 for closing costs. He has on his person or held somewhere safe cash in excess of $15k. Now he says he has reported all of his income and paid taxes on it.

    His concern is about how this will look. His lender is also concerned about a $15k deposit right before closing. His lender (according to him) suggested that his mother write him a gift check for $15k and that he give her $15k in cash. Now his mother is concerned about having $15k in cash on hand and so the reporting problem just passes over to her.

    I have no idea what I would say to him or if I should refer him to someone else for advice on how to avoid problems. Other lawyers probably would say, just break it up into two deposits but I think that is problematic.

    So any thoughts are helpful on how to approach this.

    Sincerely,

    Jim Wade

    #31256
    Eric Green
    Keymaster

    Jim, I would need more info on how he collected the $15,000 cash hoard. Did he just gather it over years, hold back some cash over a few months, what?

    We cannot counsel him to do the check with mom or to structure his deposits. I would have him just deposit it in the bank. It will get reported on a CTR, but if he reported it then who cares. I cannot really help with how the mortgage company will view it, but unfortunately he should have kept his money in the bank knowing he would want a house.

    #31276
    James Wade
    Participant

    Eric,

    Thank you. The problem sorted itself out. The gentleman just deposited the funds as that was the only safe thing to do.

    What I think you response really says that if you have a prospect with cash who wants to make a large deposit then make it. Anything else is likely to cause potential liability down the road. Best practice for potentials like this is to not keep large sums of cash lying around as this just invites trouble.

    Sincerely,

    Jim Wade

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