In Taxes

“Make sure you pay your taxes; otherwise you can get in a lot of trouble.” – Richard M. Nixon

Let’s face it: no one likes to pay taxes. Some people more than others and some even believe that the system is unfair or wrong. Most people even indicated in a recent Gallup survey that they consider that the amount of federal taxes they paid is too high . Despite what many people might argue, paying taxes is one of the foundations of a strong economy for any country or jurisdiction. However, as demonstrated by recent news, the number of countries struggling to collect taxes from companies operating within their geographies is on the rise. Big corporate names like Apple, Ford and FedEx have become adept at not paying their share, whether at home or abroad. It may not come at a surprise that our customers may try to imitate these big names.

As a general rule, income taxes are levied upon income derived from compensation for personal services of every kind and in whatever form paid, whether its wages, commissions, or money earned for performing services. The tax is also levied on profits earned from any business, regardless of its nature, and from interest, dividends, rents and the like. The income tax also applies to any gain derived from the sale of a capital asset. In short, the term “gross income” means all income from whatever source unless it is specifically excluded by law. Exemptions from “gross income” vary by country and some of the exempted sources need to be reported even when not taxed. Some general examples of exempt income usually include income earned outside the taxing jurisdiction (such exclusions may be limited in amount); income consisting of compensation for loss; and the value of property inherited, acquired by gift or received as a loan. Some tax systems specifically exclude from income items that the system is trying to encourage. Such exclusions or exemptions can be quite specific or very general. Among the types of income that may be included are classes of income earned in specific areas, such as special economic zones, enterprise zones, etc.

Most jurisdictions consider a crime or offense the willful attempt to evade or defeat the payment of income taxes. While tax planning (avoidance) is considered legal, tax evasion is not. Tax evasion means using illegal methods to avoid paying taxes. For example, a multinational firm that constructs a factory in a low-tax jurisdiction rather than in the United States to take advantage of low foreign corporate tax rates is engaged in avoidance, whereas a U.S. citizen who sets up a secret bank account in the Caribbean and does not report the interest income is engaged in evasion. There are, however, many activities, particularly by corporations, that are often referred to as avoidance, which could also be classified as evasion. One example is transfer pricing, where firms charge low prices for sales to low-tax affiliates but pay high prices for purchases from them. If these prices, which are supposed to be at arms-length, are set at an artificial level, then this activity might be viewed by some as evasion, even if such pricing is not overturned in court because evidence to establish pricing is not available.

Individuals involved in illegal enterprises often engage in tax evasion because reporting their true personal income would serve as an admission of guilt and could result in criminal charges. Individuals who try to report these earnings as coming from a legitimate source often face money laundering charges. However, when it comes to companies and due to a federal corporate tax system full of loopholes, it may be more difficult to differentiate between tax avoidance and tax evasion.

Typically, tax evasion schemes involve an individual or corporation misrepresenting their income to the taxing authority; for example, the Internal Revenue Service. Misrepresentation may take the form of underreporting income, inflating deductions, or hiding money and its interest altogether. Most of the international tax reporting of individuals reflects evasion, and this amount has been estimated to range from about $40 billion to about $70 billion a year. This evasion has occurred in part because the United States does not withhold tax on many types of passive income (such as interest) paid to foreign entities; if U.S. individuals can channel their investments through a foreign entity and do not report the holdings of these assets on their tax returns, they evade a tax that they are legally required to pay. In addition, individuals investing in foreign assets may not report income from these assets. In 2010, Congress enacted the Foreign Account Tax Compliance Act (FATCA), which has recently become effective and requires foreign financial institutions to report information on asset holders or be subject to a 30% withholding rate. Its value for tax evasion has yet to be determined.

International Corporate Tax System

It is often assumed that the richest and largest economies, home to most of the world’s largest multinationals, defend their current tax systems because it is in their best interests. However, new research from the Tax Justice Network shows that the gap between where companies pay tax and where they really do their business is huge and that among the biggest revenue losers are G20 countries themselves, including the US, UK, Germany, Japan, France, Mexico, India, and Spain. This study shows that even developed countries with state-of-the-art tax legislation and well-equipped tax authorities cannot stop multinationals from dodging their tax responsibilities.

Profit shifting to reduce taxes is also happening on a massive scale. In 2012, US multinationals alone shifted $500–700bn, or roughly 25 percent of their annual profits, mostly to countries where these profits are not taxed, or taxed at very low rates. In other words, $1 out of every $4 of profits generated by these multinationals is not aligned with real economic activity. Large corporations and wealthy individuals abuse the international tax system to avoid paying their fair share of taxes. This practice has a relatively greater impact on developing countries, whose public revenues are more dependent on the taxation of large businesses. Recent IMF research indicates that revenue loss to developing countries is 30 percent higher than for other countries as a result of the base erosion and profit shifting activities of multinational companies. Yet rich countries suffer too. For example, European countries like Greece, Italy and Portugal have recently been in financial troubles by decades of tax evasion and state looting via offshore secrecy.

From a business perspective, tax may feel like a cost. But from a country’s perspective, tax is not a cost but a transfer, from one sector to another. Even from a business accounting perspective, tax is not a cost, but a distribution out of profits. That puts it in the same category as a dividend, a return to the stakeholders in the enterprise. If companies are not paying their way, they are being irresponsible and are free-riding off benefits provided by others.

Recent actions indicate that, for example, the European Commission is proposing mandatory rules to make companies pay taxes to all the countries in which they generate profit. These actions try to fight tax evasion by international businesses, like Amazon and Apple, as these and other international companies have been striking favorable tax deals with low-tax countries like Ireland and Luxembourg. The deals allow them to funnel profit through subsidiaries established there and avoid paying most corporate taxes in the EU. The results of these initiatives are yet to be determined.

Tax Havens

Addressing tax evasion and avoidance through use of tax havens has been the subject of multiple research articles, law proposals and international organizations actions. The federal government loses both individual and corporate income tax revenue from the shifting of profits and income into low-tax countries. The revenue losses from this tax avoidance and evasion schemes are difficult to estimate, but some have suggested that the annual cost of offshore tax abuses may be around $100 billion per year.

There are variations in the features used to characterize tax havens. For example, the Organization for Economic Cooperation and Development (OECD) initially defined the following features of tax havens: no or low taxes, lack of effective exchange of information, lack of transparency, and no requirement of substantial activity. Other restrictive definitions would limit tax havens to those countries that, in addition to having low or non-existent tax rates on some types of income, also have such other characteristics as the lack of transparency, bank secrecy and the lack of information sharing, and require little or no economic activity for an entity to obtain legal status. However, other parties, particularly economists, might characterize as a tax haven any low-tax country with a goal of attracting capital, or simply any country that has low or non-existent taxes. The identification of tax havens can have legal ramifications if laws and sanctions are contingent on that identification, as is the case of some current proposals in the United States and of potential sanctions by international bodies.

Several international organizations have created their own lists of tax havens over the years. For example, the OECD created an initial list of tax havens in 2000. The definition by the OECD excluded low-tax jurisdictions, some of which are OECD members that were thought by many to be tax havens, such as Ireland and Switzerland. Many countries that were listed on the OECD’s original blacklist protested because of the negative publicity and many now point to having signed agreements to negotiate tax information exchange agreements (TIEA) and some have negotiated agreements. Seven jurisdictions (Andorra, The Principality of Liechtenstein, Liberia, The Principality of Monaco, The Republic of the Marshall Islands, The Republic of Nauru and The Republic of Vanuatu) did not make commitments to transparency and exchange of information at that time and were identified in April 2002 by the OECD’s Committee on Fiscal Affairs as uncooperative tax havens. All of these jurisdictions subsequently made commitments and were removed from the list of uncooperative tax havens. Nauru and Vanuatu made their commitments in 2003 and Liberia and the Marshall Islands in 2007. In May 2009, the Committee on Fiscal Affairs decided to remove all three remaining jurisdictions (Andorra, the Principality of Liechtenstein and the Principality of Monaco) from the list of uncooperative tax havens in the light of their commitments to implement the OECD standards of transparency and effective exchange of information and the timetable they set for the implementation. As a result, no jurisdiction is currently listed as an uncooperative tax haven by the Committee on Fiscal Affairs .

At the federal level, a similar list was used in S. 396, introduced in the 110th Congress, which would have treated firms incorporated in certain tax havens as domestic companies; the only difference between this list and the OECD list was the exclusion of the U.S. Virgin Islands from the list in S. 396. Legislation introduced in the 111th Congress to address tax haven abuse (S. 506, H.R. 1265) used a different list taken from Internal Revenue Service (IRS) court filings but had many countries in common. The Government Accountability Office (GAO) has also provided a tax haven list .

The following tax havens that have been included in several blacklists tend to be concentrated in certain areas, including the Caribbean and West Indies and Europe, locations close to large developed countries. For example:

Caribbean/West Indies Anguilla, Antigua and Barbuda, Aruba, Bahamas, Barbados, British Virgin Islands, Cayman Islands, Dominica, Grenada, Montserrat, Netherlands Antilles, St. Kitts and Nevis, St. Lucia, St. Vincent and Grenadines, Turks and Caicos, U.S. Virgin Islands
Central America Belize, Costa Rica, Panama
Coast of East Asia Hong Kong, Macau, Singapore
Europe/Mediterranean Andorra, Channel Islands (Guernsey and Jersey), Cyprus, Gibraltar, Isle of Man, Ireland, Liechtenstein, Luxembourg, Malta, Monaco, San Marino, Switzerland
Indian Ocean Maldives, Mauritius, Seychelles
Middle East Bahrain, Jordan, Lebanon
North Atlantic Bermuda
Pacific, South Pacific Cook Islands, Marshall Islands, Samoa, Nauru, Niue, Tonga, Vanuatu
West Africa Liberia

Critics have indicated that other countries or jurisdictions should be considered tax havens or have aspects of tax havens and have been overlooked in these “blacklists”. These jurisdictions include major countries such as the United States, the UK, the Netherlands, Denmark, Hungary, Iceland, Israel, Portugal, and Canada. Attention has also been directed at three states in the United States: Delaware, Nevada, and Wyoming. Finally, there are a number of smaller countries or areas in countries, such as Campione d’Italia, an Italian town located within Switzerland, that have been characterized as tax havens.

For example, the Netherlands is often considered a tax haven, especially for corporations, as it allows firms to reduce taxes on dividends and capital gains from subsidiaries and has a wide range of treaties that reduce taxes. A 2010 newspaper report explained the role of the Netherlands in facilitating movement to tax havens through provisions such as the various “Dutch sandwiches,” which allow money to be funneled out of other countries that would charge withholding taxes to non-European countries, to be passed on in turn to tax havens such as Bermuda and the Cayman Islands. In another instance, Bono and other members of the U2 band moved their music publishing company from Ireland to the Netherlands in 2006 after Ireland changed its tax treatment of music royalties. The European Commission also began investigating, in June 2014, whether certain arrangements in Ireland, Luxembourg, and the Netherlands constitute prohibited state aid; the inquiry was later expanded to all member states. In addition, the European Union has agreed to add an anti-abuse clause to its provision to prevent double taxation within member states, which may have implications for these arrangements in the future.

Some critics have identified the United States and the United Kingdom (UK) as having tax haven characteristics. For example, Luxembourg Prime Minister Jean-Claude Junker urged other EU member states to challenge the United States for tax havens in Delaware, Nevada, and Wyoming. One website offering offshore services mentions several overlooked tax havens which include the United States, United Kingdom, Denmark, Iceland, Israel, and Portugal’s Madeira Island.

It is an irony that the United States of America is considered by foreigners as one of the best tax havens in the world. The US offers the limited liability corporation (LLC) as a flexible corporate vehicle that can be exploited to avoid taxation by foreign owners. Another punch in the face for the US is the ease of incorporating in certain states (Delaware, Nevada, and Wyoming) while maintain the real identity of the owners concealed.

Underground Economies

More and more citizens around the world are avoiding taxes by operating businesses “under the radar”. The increase in “underground” or “informal” economies results in governments receiving insufficient income to provide adequate public services, whether that means health care, roads, education, or even better tax collection. According to a report prepared by The World Bank in 2007 , the informal economy has reached remarkable proportions, with a weighted average value of 17.2% of official GDP over 162 countries between 1999 and 2006/2007. This report estimates that in 2007, in 162 countries, an average of 35.5% of the official gross domestic product slipped through the cracks, not counting the proceeds from illegal activities such as drug dealing or organized crime. The report indicated that the worst offender is the former Soviet republic of Georgia, where an estimated 72.5% of GDP was untaxed in 2007. The U.S., while not immune to shadow economic problems, is the world’s least-affected country, with a mere 9% of legally derived GDP escaping the IRS that year. The report also concludes that the (tax evasion) problem is on the rise both in developed and developing nations.

The underground economy represents income earned under the table and off the books. It can include legal and illegal, or black market, goods, including drug sales, money laundering and warehouse banking schemes. The underground economy is characterized by small, single, entrepreneurial businesses that can receive payment for their goods or services in the form of cash or bartered goods. The main goal is to avoid reporting income and paying taxes to governments.

Areas for potential abuse include the house with the perpetual yard sales, eBay sellers, craft fairs, selling homemade tamales, doing car repairs in the backyard, collecting cans and bottles for recycling, selling goods at pawn shops, and day laborers on street corners.

The underground economy entrepreneur is not a business owner reporting small profits while living beyond all visible means. The underground economy entrepreneur is actively working to maintain a low economic level that does not draw attention. Some may hold a daytime job and operate in the underground by having a sideline business for unreported cash.

Individuals who participate in the underground economy want to avoid government regulations and may not be licensed in their trades. For example, a woman may offer to cut and style hair in her home for $10 in cash, while a licensed stylist will charge $30 for the same haircut in a salon. Or, a tree trimmer will charge only $375 because the state requires licensing for jobs over $400. In this case, the hair stylist and the tree trimmer can get by with the smaller earnings because they do not carry the overhead costs or the tax responsibilities.

The underground worker capitalizes on the “tax wedge” which is the difference between labor costs paid by an employer (gross wages) and the net wage received by an employee. An employer will pay wages of $50 per hour, which in the US includes payments to FICA, FUTA, Medicare, retirement benefits, workers compensation insurance, etc., but the employee will net a wage of only $30 per hour. In the underground economy the same worker will charge $30 per hour, cash, for the same work and the net result will be the same.

The underground worker can usually live on less income because no Federal or State income taxes, worker compensation taxes, payroll taxes, insurance, or social security payments are made. An undergrounder earning $40,000 can provide his family with the same lifestyle a wage earner can provide with $60,000. As a result, with very little overhead, they can provide their services at a lower cost. This will be attractive to other entrepreneurs who need to cut costs, and in a sluggish economy, to consumers hoping to stretch their buying dollars.

Whenever income is not subject to information reporting or cannot be verified by a third party there is a risk that some or all of it may not be reported. Hand in hand with unreported income is the possibility that bona fide net business income will be understated due to excess expenses, either personal or the expenses to produce the unreported income.

Traits of an Underground Worker

 Will keep a low economic profile to avoid suspicion. Unlike the typical under reporter who uses the business to pay for a brand new F350 pickup truck with sport tires, wheels and leather interior, the undergrounder will drive an older vehicle that appears to be in disrepair and will live in an older home in a lower income neighborhood. Both will probably be paid for in full.
 Can be found through word of mouth or will advertise in local free papers. An off the books hairstylist can be contacted through the local beauty supply store, or a cash plumber can be contacted through the local pipe supply outlet. The undergrounder relies on these sources to advertise his services.
 Will use an answering machine to screen calls so customers must provide their own telephone number or address before receiving a call back. This is because the undergrounder only accepts work when the money is needed, and because it allows the undergrounder to learn more about the customer before accepting a job.
 May use a postal box to protect the residence from scrutiny.
 Will engage in a trade that has minimal investment and overheard.
 Will not maintain a checking account or will not make significant deposits to a checking account. If a checking account is used, the underground funds will not be deposited. If there is legitimate earned income that will be the source of any bank deposits.
 Will cash checks paid for services at a bank (without depositing the funds), or at a check cashing service.
 Will receive cash for services or goods. If work is performed for a large business that requires a SSN, the SSN provided will be phony or the worker will make up a corporate name so no information reporting is required.
 Will be characterized by resourcefulness, always alert for cash earnings, and usually is not limited to just one income source. A moving business will report receipts made by check, but cash payments, and cash received from used car sales is never deposited. A restaurant will report credit card receipts, but cash payments and sales from seasonal Christmas trees are never deposited.
 May receive government benefits, such as Welfare, EITC, Unemployment Compensation, disability or SS Income.
 Will pay personal living expenses in cash or by money order.
 May not have insurance. Business liability insurance can be costly and undergrounders will eliminate this cost, as well as vehicle insurance (if possible) and worker compensation. Helpers will be unreported and paid in cash.
 Will own a safe.

Examples of Possible Underground Activities

Used Car Sales

Used car sales are attractive to the undergrounder. Used cars are frequently sold without financing or can be financed by the seller over a short period. No bank or lending institution will be involved. In some cases, title is never transferred to the undergrounder after purchase to avoid any paper trail. An individual making fewer than 25 sales per year may go undetected, though in many states this exceeds the limit requiring a state license. Used cars can be purchased for cash and turned over quickly. If there is ever an inventory of vehicles, they will be stored in various places, like in the undergrounder’s backyard, a friend’s vacant lot or a relative’s business parking lot.

This is a successful underground activity because new car buyers research before buying. They will use the Internet to find the best deal, and may want to inspect the invoice, but used car buyers have only the Kelly Blue Book for reference and never know what was paid by the seller to acquire the car. The seller’s profit on these sales can be significant. Only once the deal is made, does the buyer realize the sellers name is not on the title. However, the seller will have a signed bill of sale from the titled owner, so the sale is valid and the title is not contested.

Child Care/House Cleaning/Pet Sitting

Home businesses are attractive to the undergrounder. A stay at home mother, possibly on the welfare rolls, can earn extra, unreported, cash caring for neighborhood children. An elderly person, already earning social security benefits, can supplement their lifestyle by cleaning houses for working families. Single individuals often pet sit in the pet owner’s homes, using their electricity, water, television, etc. In most cases, overhead will be minimal because the customer provides all necessary supplies: snacks and clothes for children, mops and dust rags, dog food and grooming tools, etc. The undergrounder’s primary purpose is to earn money, not to use time and money purchasing supplies.

Tree Trimming/Hauling

Handyman businesses can be easily performed by an able bodied undergrounder. Many working people do not have the time or equipment to haul away large disposal items or to do large yard work projects. These undergrounders will generally estimate a flat job rate. In some states a tree trimmer must be licensed if charges exceed a particular dollar amount; for example, in California, if the job is estimated to cost more than $400 a state license is required. In that case, the undergrounder will consistently charge $375-$395 per job. Haulers may earn additional cash by selling the disposal goods to salvagers or thrift stores.

Construction Workers

Unlicensed tradesmen can earn cash income by doing small construction jobs such as building a patio, doing electrical wiring, repair or install plumbing.

Locating Underground Economy Workers

Workers in the underground economy will take extreme care to make sure their income is not reported on Forms 1099 or W-2. They will try to always get payments in cash, but if that is impossible, they will provide a false social security number. The undergrounder knows that social security numbers cannot be immediately verified and will not accept any further work from that payor. Another tactic the undergrounder may use is to explain that he or she is the sole shareholder in a corporation with the same name, i.e. John Smith Plumbing (just make it out to John Smith.)

The best way to locate an undergrounder is through cash invoices. When you encounter payments for goods or services made in cash and verified by questionable, possibly handwritten, invoices, it is very likely the customer paid an undergrounder to do the work. Further questions should be asked to determine how the customer located the underground worker, and if the worker is known to work for other local businesses, or if they worked on personal jobs for the customer.

Underground economy workers can be found on community bulletin boards. Theirs will be the handwritten 3×5 cards, or the business cards that do not list a license number when needed. Because they will not advertise in the typical ways, the undergrounder will make flyers to leave on doors and will rely on contacts made at donut shops and local restaurants. Remember, the underground entrepreneur will frequent local spots and rely on local contacts. They will be known to legitimate businesses that will send work their way when a job is too small or labor intensive for the legitimate business.

Undergrounders can best be identified through acquisitions. The most lucrative time to locate underground economy workers is when they use their cash to make significant purchases. The nature of the business is that large amounts of cash are accumulated, but must be used very carefully. Vacations can be taken if expenses can be paid in cash. Gambling is a good diversion for the cash earner and any illegal activities, like drug purchases, always accept cash. But, eventually the undergrounder will want to enjoy the earnings or invest them, and this is the time for identification.

 Real estate (usually vacant land) will be purchased from private parties, so any large cash transactions remain hidden, but the title transfer will be recorded. Real estate may also be purchased out of the home state in an effort to shield the purchase.
 If there is a legitimate business that reports constant losses, hidden funds may be hidden in inventory. Unreported profits can be used to purchase additional inventory.
 Auto dealers almost always report large cash transactions, but a private party will accept cash over $10,000 without making a report. Any new, sports or luxury vehicle will be kept hidden in a closed garage or another location.

Federal Framework

In the United States, tax evasion constitutes a crime that may give rise to substantial monetary penalties, imprisonment, or both. Section 7201 of the Internal Revenue Code reads, “Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.”

Section 7201 creates two offenses: (a) the willful attempt to evade or defeat the assessment of a tax, and (b) the willful attempt to evade or defeat the payment of a tax . The most common attempt to evade or defeat a tax is the affirmative act of filing a false return that omits income and/or claims deductions to which the taxpayer is not entitled. The tax reported on the return is falsely understated and creates a deficiency. Consequently, such willful under reporting constitutes an attempt to evade or defeat tax by evading the correct assessment of the tax.

The “evasion of payment” offense generally occurs after the existence of a tax due and owing has been established (either by the taxpayer reporting the amount of tax or by the I.R.S. assessing the amount of tax deemed to be due and owing) and almost always involves an affirmative act of concealment of money or assets from which the tax could be paid . It should also be noted that under the current prosecution scope, a person may be prosecuted under this statute for willful evasion of another’s tax. The offense of tax evasion is very broadly defined to include a person’s attempt “in any manner to evade or defeat any tax imposed by [Title 26] or payment thereof.” Thus, the statute permits prosecution of one party for the evasion of another party’s tax liability .

By way of illustration, and not by way of limitation, the U. S. Supreme Court has set out examples of conduct which can constitute affirmative acts of evasion :

a. Keeping a double set of books;
b. Making false or altered entries;
c. Making or using false documents, entries in books and records, or invoices;
d. Destruction, throwing away, or “losing” books and records;
e. Concealing sources of income;
f. Placing property (like real estate or bank accounts) or business in the name of another;
g. Extensively using currency and cashier’s checks; spending large amounts of cash which could not be reconciled with reported income or engaging in surreptitious transactions using cash, money orders, or cashier’s checks;
h. False statements to Treasury agents relating to the fraud;
i. Corporate officer’s diversion of corporate funds to pay personal expenses;
j. Sluicing off corporate income to principal shareholders in the guise of commissions or salaries out of proportion to the value of service rendered to the corporate taxpayer;
k. Consistent pattern of overstating deductions;
l. Concealment of bank accounts;
m. Holding property in nominee names;
n. Handling transactions to avoid usual records;
o. Representing political gratuities as gifts;
p. Doing business in diverse names and keeping large sums of cash in safe deposit boxes in numerous banks;
q. Structuring cash transactions to evade the filing of Bank Secrecy Act reports;
r. Any other conduct likely to conceal or mislead.

Some examples of income sources received in accounts that may be taxable, even when not expressly specified in the Internal Revenue Code, and which may be hidden by the customer include:

a. Gambling winnings;
b. Campaign contributions used for personal purposes;
c. Proceeds from underground employment, embezzlement, kickbacks, extortion or fraud; and
d. Loans received with no intent to be repaid.

The website of the Internal Revenue Service maintains a list of the current fiscal year tax fraud and money laundering schemes noted during their investigations . These “affirmative acts of evasion” or “other sources of income” can be noted during the opening or renewing of an account (like a loan application) or during the review of a customer’s transactional activity. In addition, the customer’s reluctance to provide financial information to the financial institution may also be indicative of illegal activities. Front line personnel should be made aware of these “red flags” during the periodic trainings provided.

If the financial institution suspects that a customer appears to be evading its tax responsibility, the institution is not obligated to investigate or confirm the underlying crime. Investigation is the responsibility of law enforcement. When evaluating suspicious activity and completing the SAR, the institution should, to the best of its ability, identify the characteristics of the suspicious activity. Suspicious Activity Information, Part II of the SAR provides a number of categories with different types of suspicious activity. Within each category, there is the option of selecting “Other” if none of the suspicious activities apply. However, the use of “Other” should be limited to situations that cannot be broadly identified within the categories provided.

Mr. Christopher J. Pelaez is a Staff Writer and Operations Specialist for Global RADAR. His background consists of experience as both a BSA and marketing consultant, with an education based in law. Always on top of all the latest in the world of AML/BSA, Mr. Pelaez also curates the well-known Global RADAR news service, BSA News Now.
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