Final answer:
The customer may be trying to circumvent the Bank Secrecy Act. This act mandates banks to report any transactions over $10,000 to the authorities. The repetitive deposits of $9,000 could be an attempt at 'smurfing', a practice of depositing amounts below the legal threshold to avoid suspicion.
Step-by-step explanation:
The customer could be trying to circumvent the Bank Secrecy Act. This legislation requires financial institutions in the United States to assist U.S. government agencies in detecting and preventing money laundering. One specific provision of the Bank Secrecy Act is that it requires banks to report any deposits, withdrawals, or transfers of more than $10,000 to the federal government. Making multiple deposits of slightly less than the reporting threshold, called structuring or 'smurfing', is illegal and is typically done to try to avoid triggering a report to the government under this regulation.
When customers deposit money into a checking account, savings account, or a certificate of deposit, the bank views these deposits as liabilities. This is because the bank owes these deposits to its customers when they wish to withdraw their money. In the scenario given, the customer's repetitive deposit pattern may raise suspicion as it appears they are maintaining their deposits below the $10,000 limit to avoid this reporting, hence potentially violating the Bank Secrecy Act.
Learn more about Bank Secrecy Act