With the recent troubles of one of the members here I decided to investigate this a little further. I was a little surprised at what I found.
[size=13pt]Coin Roll Hunting, Money Laundering, and you[/size]
The various laws meant to catch criminals who are attempting to launder money can sometimes inadvertently get practitioners of this hobby into trouble as well.
Here is a rough explanation of the laws as I see them and how as a hunter, you can avoid these pitfalls.
Banks and many other financial institutions are required by law to report a whole range of financial transactions that could possibly be the result of an attempt to launder money.
This is by no means complete and I hope to add to it as I find things out.
First you need to understand money laundering. Here are a few web sites that to varying degrees help to explain what is going on…
http://www.wisebread.com/how-to-launder-money
http://en.wikipedia.org/wiki/Money_laundering
http://money.howstuffworks.com/money-laundering2.htm
http://www.straightdope.com/columns/read/2836/how-would-i-go-about-laundering-money
Miscellaneous Information
If you have ever received any money from a foreign source, you are on a watch list and your transactions will be heavily scrutinized.
If your name matches a list of suspicious persons as determined by any number of Federal agencies, your transactions will be heavily scrutinized. This list is called the Specially Designated Nationals list and contains thousands if not hundreds of thousands of names.
Your name is also very likely to be on this list if you are a Muslim… sorry Obediah.
If you make or receive calls from out of the country you are almost certainly on this list.
If you suddenly start making transactions involving thousands of dollars the bank that you do business with may or may not file a Suspicious Activity Report. This is by no means automatic and if your transaction does not amount to the required reporting limits, you will most likely not be reported.
With that said it is still possible and if you make a teller angry at you it is entirely possible that they might do this.
If you deposit or withdrawal more than 10,000 in any single day, the bank will file a Currency Transaction Report with the IRS, which can and often is forwarded to the FBI and various other Law Enforcement agencies.
There is a software program called “Know your customer” that continually analyzes your transactions and compares them to previous activity to pick out patterns. If it thinks something is going on it will report this to the management of the bank and from there, a suspicious activity report may or may not be generated.
THE BIG ONE
The big one is the Suspicious Activity Report.
If you ever have to talk with an alphabet agency over this hobby, it was almost assuredly because someone filed this report on you.
A SAR might be filed if you do any of the following…
1) Exchange one denomination of bills for another denomination of bills. This sounds pretty straightforward but a vengeful teller could interpret it as exchanging coins for cash and use it as an excuse to report you.
2) Allow someone else to deposit money into your account or if you deposit money into someone else’s account.
3) If you “frequently” make deposits of less than 3000 dollars. Frequently is BTW not defined so it could be a frequently as twice a month, twice a week, or even twice a year. I suspect it means more like several times a day but can’t be sure.
4) If you make any transaction that comes close to 10,000 dollars but does not quite breach the 10,000 dollar barrier. My guess is anything over 9000 dollars.
5) If you offer the bank teller or any other bank employee a gift or gratuity of any kind. This could be as innocent as a Christmas card…
6) If you use multiple locations of the same bank over a short period of time.
7) If it is discovered (usually not until the ABC guys get involved) that you have multiple accounts with multiple banks.
It is also worth noting that tellers generally cannot initiate one of these reports without taking it to their supervisor first. If it weren’t for this fact, I am sure there would be millions of these report filed every month.
This is where a little honesty or candidness goes a long way with the manager.
Here are the two main forms that would be used by a bank employee to “turn you in” or otherwise alert Law Enforcement to your activities. I HIGHLY suggest you read them in full to better understand them.
Currency Transaction Report
http://www.fincen.gov/forms/files/fin104_ctr.pdf
Suspicious Activity Report
http://www.fincen.gov/forms/files/fin109_sarmsb.pdf
MOST OF THE TIME, these reports are generated automatically by computers at the bank which are designed to find suspicious transactions. That is not to say so teller who is tired of lugging around bags of coins that you bring in won’t file one just to mess with you.
A few more points…
One of the biggest dangers here is the secrecy we have surrounding this.
You need to be aware that when a teller asks you about all those coins you bring in, they are not making idle chit chat. They are soliciting information as they were trained to do in order to spot suspicious activity.
You need to be aware that if you lie to them and get caught in the lie or they even suspect you of lying you can almost guarantee yourself a SAR report will be filed in your name.
If you are overtly vague in your explanation, this can also be interpreted the wrong way and cause a SAR to be filed.
In addition, if you read the SAR reports, it almost guarantees that a SAR will eventually be filed on you. The very nature of Coin Roll Hunting means that you will be performing activities that they are specifically looking for.
I suppose if you were open with the tellers and manager about what you were doing, and they were OK with it, and fully understood what was going on, and you never came close to triggering any of the automatic reports, you would never have to worry about having to talk to an LEO, but in reality, the law of averages means we will most likely eventually get “interrogated” if we do this long enough.
For that, I have reposted my addendum to CRH post here….
1) Be prepared to eventually be asked to file taxes on this “hobby”.
I suggest keeping detailed files on your mileage, when, where and how much coins you move, and how much silver or otherwise collectible coins you find.
For many if not most of us, it would be very easy to justify much more in expenses than we ever made from these endeavors, but this is a moot point if you cannot prove these facts.
For example, if in 2009, you found 200 ounces of silver halves, and 250 NIFC coins, and you drove 100 miles per week in pursuing this hobby, your “income” would be perhaps around 75 cents per NIFC coin, and whatever the spot price of silver was for the year. NOTE: it might be worthwhile to have a “few” receipts for silver sold at a coin dealer or perhaps on eBay to prove this. If you then deducted from this 50 cents per mile driven, as well as any other legitimate expenses, your profit from this endeavor would very quickly become a loss for tax purposes.
The fact that you collected coins other than just silver coins could work in your favor to prove that you were not some kind of “hoarder” of silver and were simply a coin collector. This would possibly be useful, as coin collecting is considered by many if not most to be a legitimate hobby while “hoarding” silver might someday be less than legal.
Owning a loupe, up to date red books, etc would mesh well with the fact that you are a coin collector and not a hoarder.
It works heavily in our favor that the IRS does not generally like for people to claim “hobby” expenses on their taxes. There are many rules for this, most if not all of which are meant to discourage people from claiming these expenses on their taxes.
Here are a few interesting articles on this…
http://www.businessknowhow.com/money/taxhobby.htm
http://www.irs.gov/newsroom/article/0,,id=172833,00.html
Basically the IRS doesn’t want to hear about hobby income or losses unless you make a profit 3 out of the past 5 years. Something to consider.
2) Expect to eventually be questioned by either a bank manager or some form of law enforcement.
What you tell the banks is your business, and for the most part, you are not required to tell them the truth, but telling less than the truth might eventually get you in some kind of trouble. In my opinion, it is best to either be very vague about it or just find a bank that accepts the truth.
You are NOT allowed to lie to law enforcement. Either tell the truth or don’t tell them anything. This is your right (currently) per the US Constitution.
In preparing for this day, it is paramount that you be prepared. If you intend to speak to them, you should have documentation to prove most, if not everything you say.
They can and probably will try to scare you, and ask you questions to try to trip you up, or make vague or not so vague threats. Be prepared for this and remember that you can terminate the interrogation at any time by invoking your 4th amendment rights.
3) What if at some point in the future, you are asked to turn in your silver?
Don’t laugh, this could easily happen and it would be played as the “patriotic” thing to do, as well as to turn in your neighbors who “might” have some silver in their possession.
The fact that you were able to provide some form of receipts for silver sold in the past would go a long way in “proving” that you sold the majority of your silver, or perhaps even all of it.
A collection of business cards from individuals who buy and sell coins at flea markets and coin shows (and pay in cash) would go a long way in “proving” that you sold all your silver long ago.
You could easily state that you sold ALL your silver to make the down payment on a house, or perhaps some other large purchase.
Also keep in mind that if you try to insure your coins against loss, you are basically advertising the fact that you have that much silver to insure.
In addition, numerous posts about large amounts of silver coins found while Coin Roll Hunting would not mesh well if you claimed to only have found 1/4th of what you reported online. Basically for this last part, we all need to curb our enthusiasm.
4) DO NOT store your silver or anything valuable in a safe deposit box. Many hundreds of these boxes were sold by the state of California several years ago, and the former owners have been forced to sue the state for Billions of dollars in losses. As more and more states face budget woes, they will certainly be viewing your safe deposit boxes as sources of income.
In addition, you might want to read up on the 1933 gold seizure. Because of this, banks were required to go through your safe deposit box, and turn in any gold item to the government, and the former owner of this gold was given paper money for it, which was almost immediately worth less….
5) Read up on the history of money laundering.
Seriously, only by having a good general idea of how this works will you be able to avoid being accused of doing it.
Avoid operating near or being associated with the gambling industry at all costs. If there is a bank in a town with a casino in it, do not go there.
Don’t make multiple deposits of coin, rolled or bagged, at different banks on the same day. Ideally make just one or two deposits per week.
Read up on the reporting requirements for large cash transactions and act accordingly. Be aware that to “structure” your deposits to avoid this can be suspicious in itself, therefore do not deposit more than the “limit” in any given week, no matter how many banks you use for dumps.
[size=13pt]Coin Roll Hunting, Money Laundering, and you[/size]
The various laws meant to catch criminals who are attempting to launder money can sometimes inadvertently get practitioners of this hobby into trouble as well.
Here is a rough explanation of the laws as I see them and how as a hunter, you can avoid these pitfalls.
Banks and many other financial institutions are required by law to report a whole range of financial transactions that could possibly be the result of an attempt to launder money.
This is by no means complete and I hope to add to it as I find things out.
First you need to understand money laundering. Here are a few web sites that to varying degrees help to explain what is going on…
http://www.wisebread.com/how-to-launder-money
http://en.wikipedia.org/wiki/Money_laundering
http://money.howstuffworks.com/money-laundering2.htm
http://www.straightdope.com/columns/read/2836/how-would-i-go-about-laundering-money
Miscellaneous Information
If you have ever received any money from a foreign source, you are on a watch list and your transactions will be heavily scrutinized.
If your name matches a list of suspicious persons as determined by any number of Federal agencies, your transactions will be heavily scrutinized. This list is called the Specially Designated Nationals list and contains thousands if not hundreds of thousands of names.
Your name is also very likely to be on this list if you are a Muslim… sorry Obediah.
If you make or receive calls from out of the country you are almost certainly on this list.
If you suddenly start making transactions involving thousands of dollars the bank that you do business with may or may not file a Suspicious Activity Report. This is by no means automatic and if your transaction does not amount to the required reporting limits, you will most likely not be reported.
With that said it is still possible and if you make a teller angry at you it is entirely possible that they might do this.
If you deposit or withdrawal more than 10,000 in any single day, the bank will file a Currency Transaction Report with the IRS, which can and often is forwarded to the FBI and various other Law Enforcement agencies.
There is a software program called “Know your customer” that continually analyzes your transactions and compares them to previous activity to pick out patterns. If it thinks something is going on it will report this to the management of the bank and from there, a suspicious activity report may or may not be generated.
THE BIG ONE
The big one is the Suspicious Activity Report.
If you ever have to talk with an alphabet agency over this hobby, it was almost assuredly because someone filed this report on you.
A SAR might be filed if you do any of the following…
1) Exchange one denomination of bills for another denomination of bills. This sounds pretty straightforward but a vengeful teller could interpret it as exchanging coins for cash and use it as an excuse to report you.
2) Allow someone else to deposit money into your account or if you deposit money into someone else’s account.
3) If you “frequently” make deposits of less than 3000 dollars. Frequently is BTW not defined so it could be a frequently as twice a month, twice a week, or even twice a year. I suspect it means more like several times a day but can’t be sure.
4) If you make any transaction that comes close to 10,000 dollars but does not quite breach the 10,000 dollar barrier. My guess is anything over 9000 dollars.
5) If you offer the bank teller or any other bank employee a gift or gratuity of any kind. This could be as innocent as a Christmas card…
6) If you use multiple locations of the same bank over a short period of time.
7) If it is discovered (usually not until the ABC guys get involved) that you have multiple accounts with multiple banks.
It is also worth noting that tellers generally cannot initiate one of these reports without taking it to their supervisor first. If it weren’t for this fact, I am sure there would be millions of these report filed every month.
This is where a little honesty or candidness goes a long way with the manager.
Here are the two main forms that would be used by a bank employee to “turn you in” or otherwise alert Law Enforcement to your activities. I HIGHLY suggest you read them in full to better understand them.
Currency Transaction Report
http://www.fincen.gov/forms/files/fin104_ctr.pdf
Suspicious Activity Report
http://www.fincen.gov/forms/files/fin109_sarmsb.pdf
MOST OF THE TIME, these reports are generated automatically by computers at the bank which are designed to find suspicious transactions. That is not to say so teller who is tired of lugging around bags of coins that you bring in won’t file one just to mess with you.
A few more points…
One of the biggest dangers here is the secrecy we have surrounding this.
You need to be aware that when a teller asks you about all those coins you bring in, they are not making idle chit chat. They are soliciting information as they were trained to do in order to spot suspicious activity.
You need to be aware that if you lie to them and get caught in the lie or they even suspect you of lying you can almost guarantee yourself a SAR report will be filed in your name.
If you are overtly vague in your explanation, this can also be interpreted the wrong way and cause a SAR to be filed.
In addition, if you read the SAR reports, it almost guarantees that a SAR will eventually be filed on you. The very nature of Coin Roll Hunting means that you will be performing activities that they are specifically looking for.
I suppose if you were open with the tellers and manager about what you were doing, and they were OK with it, and fully understood what was going on, and you never came close to triggering any of the automatic reports, you would never have to worry about having to talk to an LEO, but in reality, the law of averages means we will most likely eventually get “interrogated” if we do this long enough.
For that, I have reposted my addendum to CRH post here….
1) Be prepared to eventually be asked to file taxes on this “hobby”.
I suggest keeping detailed files on your mileage, when, where and how much coins you move, and how much silver or otherwise collectible coins you find.
For many if not most of us, it would be very easy to justify much more in expenses than we ever made from these endeavors, but this is a moot point if you cannot prove these facts.
For example, if in 2009, you found 200 ounces of silver halves, and 250 NIFC coins, and you drove 100 miles per week in pursuing this hobby, your “income” would be perhaps around 75 cents per NIFC coin, and whatever the spot price of silver was for the year. NOTE: it might be worthwhile to have a “few” receipts for silver sold at a coin dealer or perhaps on eBay to prove this. If you then deducted from this 50 cents per mile driven, as well as any other legitimate expenses, your profit from this endeavor would very quickly become a loss for tax purposes.
The fact that you collected coins other than just silver coins could work in your favor to prove that you were not some kind of “hoarder” of silver and were simply a coin collector. This would possibly be useful, as coin collecting is considered by many if not most to be a legitimate hobby while “hoarding” silver might someday be less than legal.
Owning a loupe, up to date red books, etc would mesh well with the fact that you are a coin collector and not a hoarder.
It works heavily in our favor that the IRS does not generally like for people to claim “hobby” expenses on their taxes. There are many rules for this, most if not all of which are meant to discourage people from claiming these expenses on their taxes.
Here are a few interesting articles on this…
http://www.businessknowhow.com/money/taxhobby.htm
http://www.irs.gov/newsroom/article/0,,id=172833,00.html
Basically the IRS doesn’t want to hear about hobby income or losses unless you make a profit 3 out of the past 5 years. Something to consider.
2) Expect to eventually be questioned by either a bank manager or some form of law enforcement.
What you tell the banks is your business, and for the most part, you are not required to tell them the truth, but telling less than the truth might eventually get you in some kind of trouble. In my opinion, it is best to either be very vague about it or just find a bank that accepts the truth.
You are NOT allowed to lie to law enforcement. Either tell the truth or don’t tell them anything. This is your right (currently) per the US Constitution.
In preparing for this day, it is paramount that you be prepared. If you intend to speak to them, you should have documentation to prove most, if not everything you say.
They can and probably will try to scare you, and ask you questions to try to trip you up, or make vague or not so vague threats. Be prepared for this and remember that you can terminate the interrogation at any time by invoking your 4th amendment rights.
3) What if at some point in the future, you are asked to turn in your silver?
Don’t laugh, this could easily happen and it would be played as the “patriotic” thing to do, as well as to turn in your neighbors who “might” have some silver in their possession.
The fact that you were able to provide some form of receipts for silver sold in the past would go a long way in “proving” that you sold the majority of your silver, or perhaps even all of it.
A collection of business cards from individuals who buy and sell coins at flea markets and coin shows (and pay in cash) would go a long way in “proving” that you sold all your silver long ago.
You could easily state that you sold ALL your silver to make the down payment on a house, or perhaps some other large purchase.
Also keep in mind that if you try to insure your coins against loss, you are basically advertising the fact that you have that much silver to insure.
In addition, numerous posts about large amounts of silver coins found while Coin Roll Hunting would not mesh well if you claimed to only have found 1/4th of what you reported online. Basically for this last part, we all need to curb our enthusiasm.
4) DO NOT store your silver or anything valuable in a safe deposit box. Many hundreds of these boxes were sold by the state of California several years ago, and the former owners have been forced to sue the state for Billions of dollars in losses. As more and more states face budget woes, they will certainly be viewing your safe deposit boxes as sources of income.
In addition, you might want to read up on the 1933 gold seizure. Because of this, banks were required to go through your safe deposit box, and turn in any gold item to the government, and the former owner of this gold was given paper money for it, which was almost immediately worth less….
5) Read up on the history of money laundering.
Seriously, only by having a good general idea of how this works will you be able to avoid being accused of doing it.
Avoid operating near or being associated with the gambling industry at all costs. If there is a bank in a town with a casino in it, do not go there.
Don’t make multiple deposits of coin, rolled or bagged, at different banks on the same day. Ideally make just one or two deposits per week.
Read up on the reporting requirements for large cash transactions and act accordingly. Be aware that to “structure” your deposits to avoid this can be suspicious in itself, therefore do not deposit more than the “limit” in any given week, no matter how many banks you use for dumps.
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