On another forum, a question was asked by a new investor about paying cash for a home. When they meant “paying cash”, they meant that they had the cash stashed in a safe deposit box for the transaction. They had evidently earned the money honestly. They had sold another property and simply pulled the cash out of the bank from the sale and stuck it in the box. When the closing agent balked at accepting a wad of bills, they wanted to know the best way to go about purchasing the property with their hard cash.
First of all, there is nothing illegal or immoral about what the investor is trying to do. Red flags are simply going to go up everywhere. The US Government, through much regulation including the Patriot Act, strives to eliminate the funding of terrorists, organized crime, and illegal drug organizations by stopping the flow of money for these nefarious groups. With this in mind, banks and closing agents are required by law to complete reports on any large or suspicious currently transaction that they come across. The US Secret Service (a branch of the Treasury Department…they don’t just protect politicians) receives these reports and they attempt to catch bad guys/gals through the flow of money. Banks and closing agents have no choice but to report large transactions…even if they 100% know they are legitimate.
My recommendation is to simply keep the money in the bank and not in your mattress, but if you do have a transaction where you need to introduce a large sum of cash into the banking system, simply be able to document with a paper trail where the money came from. Provided you have done nothing wrong, you have nothing to worry about. The bank or closing agent (closing agents usually require wire transfers these days…they usually no longer accept cash or cashier’s checks) will simply require your identification and they will need to prepare the appropriate reports. There are many legitimate reasons why you would have a large sum of cash that would require the institution to file one of these reports. If you came by the money in an illegal manner, however, I’m sorry but we have no good advice to give you.
Just because you have a large sum of cash doesn’t mean you’ve done anything wrong. It simply has to be documented with you introduce it or pull it out of the financial system.