A client, Mr. Chen, frequently deposits varying amounts of cash, always just below the $10,000 CAD reporting threshold, for several different individuals who are also clients of the same financial institution. He often refers to these deposits as 'loans' or 'gifts' to family members. What type of activity should such behaviour prompt the financial institution to investigate and potentially report under the PCMLTFA?

Question: A client, Mr. Chen, frequently deposits varying amounts of cash, always just below the $10,000 CAD reporting threshold, for several different individuals who are also clients of the same financial institution. He often refers to these deposits as 'loans' or 'gifts' to family members. What type of activity should such behaviour prompt the financial institution to investigate and potentially report under the PCMLTFA?

Answer options:

• A Large Cash Transaction Report (LCTR).
• A Terrorist Property Report. ✅ A Suspicious Transaction Report (STR).
• An Electronic Funds Transfer (EFT) Report.

Correct answer: A Suspicious Transaction Report (STR).

Explanation: Structuring transactions to avoid reporting thresholds, often referred to as 'smurfing,' is a strong indicator of money laundering and requires the filing of a Suspicious Transaction Report (STR) with FINTRAC.