Which of the following is an indicator of funnel account activity?

• A. An account opened in one US state receives numerous cash deposits of less than $10,000 by unidentified persons at branches outside of the geographic region where the account is domiciled.
• B. Business account deposits take place in a different geographic region from where the business operates.
• C. Individuals opening or making deposits to funnel accounts lack information about the stated activity of the account, the account owner, or the source of the cash.
• D. A business account receives out-of-state deposits with debits that do not appear to be related to its business purpose.

Answer: (B)

Funnel account activity is most clearly indicated when deposits into a business account occur in a geographic region where the business does not operate. This geographic mismatch suggests funds are being funneled from one area into another to obscure their origin and purpose, a common tactic in money laundering to layer and distance illicit sources from legitimate activity. By depositing in a region outside the business’s normal operations, the pattern stands out as characteristic of funneling, signaling that cash is being moved through the account in a way that doesn’t align with the business’s actual operations.

Other patterns might raise suspicion, but they’re less specific to funneling. Heavy cash deposits by unidentified individuals or deposits in a different region could reflect various suspicious activities, not necessarily the deliberate cross-regional structuring that funneling typically implies. Lack of information about the account or source, or deposits that don’t align with business purpose, are also red flags, but the clear hallmark of funneling is the geographic discrepancy between where the business operates and where deposits are made.