Understanding Funnel Accounts and Structuring Tactics
The Washington Times has reported that criminal groups, particularly those operating drug and human trafficking operations, are increasingly relying on everyday financial institutions to clean their dirty money through small, repetitive cash deposits made in person at teller windows.
The tactic is often deceptively simple. According to the Financial Crimes Enforcement Network (FinCEN), cartels use so-called “funnel accounts” that allow them to spread out deposits across multiple locations, evading automated alerts. These couriers—sometimes unaware of the full scope of their missions—present cash in increments just below the $10,000 threshold, which would normally trigger a Currency Transaction Report (CTR). The structured nature of these deposits is a classic red flag in money laundering schemes.
For front-line bank employees, particularly tellers, the pressure to stay vigilant is immense. A seemingly polite customer making multiple small deposits might not immediately raise alarms. But as the U.S. Department of Justice has noted in several recent indictments, it’s often the most mundane transactions that mask criminal activity. That’s why awareness and decisive action are the first lines of defense.
Empowering Tellers: Spotting Red Flags & Understanding SAR Procedures
Tellers should be trained to spot patterns—like multiple customers depositing into the same account from different regions, or vague explanations about the source of funds. When suspicions arise, the appropriate course of action is to escalate the activity to a supervisor or compliance officer, who may determine that a Suspicious Activity Report (SAR) should be filed with FinCEN. According to the Bank Secrecy Act (BSA), financial institutions are required to report such anomalies, but also to maintain strict confidentiality—informing a customer that a SAR has been filed is illegal and considered “tipping off,” a punishable offense.
While vigilance at the teller window is essential, bank management must ensure that anti-money laundering (AML) programs are not just adequate, but dynamic and aggressive. The Federal Reserve notes that an effective AML system involves far more than routine compliance checklists—it should include continuous transaction monitoring, deep customer due diligence, and a clear understanding of the bank’s risk profile.
Strengthening AML Programs
Moreover, employee education must go beyond annual training modules. Cartel tactics evolve continually, and so must the knowledge base of bank staff. Creating a compliance culture—where tellers feel empowered to speak up, and management invests in the latest AML tools—can make a significant difference. Some banks are even employing artificial intelligence and machine learning to detect complex laundering networks that would elude traditional monitoring systems.
Another worthy prevention tactic is as simple as steadily disseminating information on scams to bank staff. Owing to the importance of this issue and the role that awareness plays in safeguarding against it, Banking+ routinely reports on current banking scams nationwide.
The High Cost of Bank Compliance Failures
Delayed responses come with steep consequences. Just recently, TD Bank agreed to pay a $3 billion penalty after U.S. authorities discovered the institution had allowed over $1 billion in suspicious transactions tied to drug trafficking to pass through its systems. The Justice Department alleged that the bank’s “long-term, pervasive, and systemic deficiencies” enabled organized crime to abuse the institution for years (WLWT News).
Closing the Door on Cartel Cash
Ultimately, banks are not just financial intermediaries—they are frontline defenders in the fight against organized crime. A single lapse in judgment or delay in action at a teller window can ripple outward into massive legal, reputational, and financial consequences. By fostering an alert and educated workforce, leveraging advanced technology, and collaborating closely with regulators, U.S. banks can slam the door on cartel cash—no matter how quietly it arrives.
