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Cash flow is the lifeblood of any business. Whether you're managing a commercial construction firm or running a retail operation, understanding how money moves in and out of your business is key to long-term success. Poor cash flow management can leave businesses scrambling to cover expenses, even when profits look good on paper.
A recent episode of the Expandable Series discussed this in detail, but here are some fundamental cash flow principles, using commercial construction as an example, that apply to businesses across all industries.
1. Understand Your Cash Outflows
In commercial construction, significant cash outlays are required upfront for raw materials, permits, and labor. These costs must be covered well before payments from clients arrive. Similarly, in retail, manufacturers need to purchase inventory long before customers make a purchase.
A business must have enough cash on hand to cover these expenses. Without it, operations may stall, delaying projects and impacting profitability. Understanding your cash needs ahead of time ensures smoother financial management.
Example: Imagine a mid-sized construction firm, Apex Builders, takes on a new commercial office project. Before the first payment arrives, they must pay for steel beams, concrete, and skilled labor. Without proper cash reserves or a well-structured payment schedule, Apex Builders could struggle to cover these costs, potentially halting the project and damaging their reputation.
2. Time Your Cash Inflows Strategically
Revenue in commercial construction typically comes from milestone payments throughout a project or upon completion. However, these payments can be delayed due to contract terms, client approvals, or unexpected issues.
For any business, it’s essential to analyze how long it takes to convert expenses into revenue. Are you waiting 30, 60, or even 90 days to get paid? If so, your business must be structured to withstand these gaps. Ensuring that your contract terms align with your cash flow needs can prevent unnecessary financial strain.
Example: Apex Builders structures their contracts to ensure payments are received at key milestones—such as after the foundation is laid, after framing is completed, and upon final inspection. By planning these payment intervals, they reduce financial stress and ensure they always have working capital.
3. Build a Cash Buffer
One of the best strategies for managing cash flow is to build a buffer that accounts for timing discrepancies. In construction, this means having enough reserves to cover payroll and material costs while waiting for payments. The same principle applies to any business with delayed payments.
This buffer should be built into your pricing. Instead of operating on razor-thin margins, factor in potential delays and unexpected costs when setting your rates. This ensures financial stability even during slower payment periods.
Example: Apex Builders includes a 10% contingency in their project bids, ensuring that if a client delays payment or unexpected costs arise, they have the liquidity to keep operations running smoothly.
4. Plan for Payroll and Fixed Expenses
Payroll is a non-negotiable expense in any business. Employees expect timely paychecks, and failure to meet payroll obligations can lead to operational disruptions and even legal consequences.
Since payroll and other fixed expenses (like rent, utilities, and insurance) don’t change based on revenue fluctuations, they must be accounted for in advance. Forecasting these expenses over the next quarter will help ensure you always have the necessary funds available.
Example: Apex Builders schedules payments from previous projects to help cover payroll during slow months, ensuring that employees are always paid on time.
5. Look Ahead to the Next Quarter
Successful businesses don’t just think about today’s cash flow—they plan for the next quarter and beyond. What projects are in the pipeline? When will revenue from those projects be realized? What expenses need to be covered in the meantime?
By forecasting cash flow and preparing for potential shortfalls, businesses can make informed decisions about when to invest, when to hold back, and when to seek additional financing options to bridge any gaps.
Example: Apex Builders maintain a rolling cash flow projection, helping them anticipate slow periods and ensuring they never take on more projects than they can financially support at one time.
The Bottom Line
Cash flow management isn’t just about tracking numbers—it’s about planning ahead, building flexibility into your pricing, and ensuring your business can withstand the natural ebbs and flows of financial cycles. Whether you’re in commercial construction, retail, or any other industry, mastering cash flow is essential for long-term success. Surety Bank is here to help businesses navigate these challenges with financial solutions designed to keep operations running smoothly.
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In the spring of 1994, Cindy walked into Surety Bank—not to apply for a job, but to apply for a mortgage. She and her family had recently moved from Michigan, and Surety was simply the place she trusted to help them settle into their new home. What she didn’t expect was that the bank would also offer her something even more life-changing—a career that would span more than three decades.
“I didn’t have to look very hard for a job,” Cindy recalls with a laugh. “They saw that I had banking experience and called me up because they needed a teller.”
It was the start of a journey that would see Cindy grow from a front-line teller to a key part of the bank’s payroll and HR team. Over the years, she became a steady presence in the bank’s evolving landscape, witnessing firsthand how technology transformed the industry. When she first started, many processes were still manual—checks were physically run through proof machines, reconciliations were done by hand, and not everyone even had a computer at their desk.
“I remember when we had to share computers,” she says. “That didn’t last too long, but things were a lot different back then.”
Cindy’s career path took her from teller to bookkeeping, then into accounting, and eventually into payroll and HR, where she found her niche. She describes her work as being part of a team that always pulled together to solve challenges—a culture of collaboration and adaptability that made Surety Bank feel like home.
“We always worked together to find solutions,” Cindy reflects. “Even though my role became more specialized over the years, it was always about teamwork.”
For Cindy, working at Surety Bank wasn’t just about the job—it was about the life it allowed her to build. Living just three miles from the bank, she was able to balance her career while staying closely involved in raising her children, supporting her husband, and nurturing her faith.
“I’ve been able to have my life at home and my life here at work,” she says. “It’s been a blessing to have a career that allowed me to be present for the things that mattered most—my family, my husband, and my faith.”
As much as she dedicated herself to her work, Cindy never lost sight of what was most important. She is deeply grateful that her time at Surety allowed her to grow professionally while still prioritizing the people she loved.
Looking back, Cindy remembers the many friendships, the changes that brought new ideas, and the way she adapted alongside the bank. Perhaps most of all, she values the relationships she built—with colleagues who became like family and customers who left a lasting impression.
Now, as she steps into retirement, Cindy is ready for a new chapter—one that revolves around her grandchildren, travel, and time with family in Michigan. It’s a bittersweet transition, but one that feels right.
“I never dreamed I’d be working someplace for 31 years,” she admits. “But as it turns out, it really went by fast.”
For those just starting their careers in banking, Cindy offers a simple but powerful piece of advice: “Be open to learning all aspects of the job. Take your time, think things through, and just go with the flow.”
After 31 years of steady dedication, Cindy leaves behind a legacy of resilience, kindness, and adaptability—a perfect reflection of the values that make Surety Bank so special. While she may be stepping away from her desk, the impact she’s made at Surety Bank will remain for years to come.
Thank you, Cindy, for 31 incredible years. Your Surety Bank family will miss you!
Durable Medical Equipment (DME) is defined as any medical equipment used in the home to aid in a better quality of living. The term includes wheelchairs, knee braces, hospital beds, nebulizers, walkers, etc. DME is a benefit included in most insurances including Medicare Part B which covers medically necessary DME that is prescribed by a physician for use in a patient’s home.
According to an AARP Bulletin titled “Medicare Under Assault From Fraudsters”, “roughly 10 cents of every dollar budgeted for the giant health insurance program is stolen or misdirected before it helps any enrollee. Malcom Sparrow, a Harvard University professor and leading expert on health care fraud, says the true amount lost to fraud, abuse or improper payments could be 20 percent, or even as high as 30 percent.” See below a graphic that puts the scale of Medicare fraud into perspective.
As you can see, DME fraud has become a huge business for criminals, and they are increasingly using MSBs to provide illegal kickbacks to physicians, launder their illegal proceeds, and take advantage of fraud victims. This behavior should disgust any American taxpayer, if not morally, think about how much of our hard-earned money over the years goes straight into these fraudsters’ pockets.
How it works:
See below an excerpt from a February 4, 2021, Department of Justice Press release titled “Florida Businesswoman Pleads Guilty to Criminal Health Care and Tax Fraud Charges and Agrees to $20.3 Million Civil False Claims Act Settlement”
[According to court documents, Wolfe and her conspirators used Regency to establish dozens of DME supply companies — or, rather, DME fronts — using trickery and deception. The scheme involved placing the DME fronts in the names of straw owners. By concealing the true ownership, Wolfe’s conspirators secretly gained control of multiple companies. With such control, they collectively submitted well over $400 million in illegal DME claims to Medicare and the Civilian Health and Medical Program of the VA. The conspirators claimed that the unusually high volume of claims reflected the use of telemedicine procedures, when, in fact, they had simply bribed doctors to approve them. Almost always, the doctors had no telehealth interaction with the beneficiaries.]
As you can see Wolfe established multiple shell companies and submitted over $400 million in illegal DME claims to Medicare and the Civilian Health and Medical Program of the VA. Another crucial element of the scheme is she bribed doctors to approve these fraudulent invoices stating they conducted telehealth services for the beneficiaries. The illegal kickbacks to doctors is what check cashing MSBs will encounter. A pattern we have picked up on is checks from companies with “Medical Equipment, DME, Braces, Devices, etc.” made payable to individuals that turn out to be physicians or money mules are likely illegal kickbacks to doctors for signing off on fraudulent DME claims.
Anti-Kickback Statute [42 U.S.C. § 1320a-7b(b)]
The AKS is a criminal law that prohibits the knowing and willful payment of “remuneration” to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs (e.g., drugs, supplies, or health care services for Medicare or Medicaid patients). Remuneration includes anything of value and can take many forms besides cash, such as free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies. In some industries, it is acceptable to reward those who refer business to you. However, in the Federal health care programs, paying for referrals is a crime. The statute covers the payers of kickbacks-those who offer or pay remuneration- as well as the recipients of kickbacks-those who solicit or receive remuneration. Each party’s intent is a key element of their liability under the AKS.
Criminal penalties and administrative sanctions for violating the AKS include fines, jail terms, and exclusion from participation in the Federal health care programs. Under the CMPL, physicians who pay or accept kickbacks also face penalties of up to $50,000 per kickback plus three times the amount of the remuneration.
Other Examples:
Red flags we have identified relating to DME fraud kickbacks are as follows:
• Maker names related to medical equipment writing checks out to individuals. The dollar amount can be random, but we see a lot in the $2,000 – $9,000 range. Less sophisticated actors will structure these payments to remain under the $10,000 CTR threshold.
• When you look up the registered agents of these DME companies on publicly available databases such as Sunbiz.org in Florida, they often control several other companies related to medical equipment that have been recently established. This is indicative of shell companies just like we saw in the above example from the DOJ press release.
• A payee that comes into the check cashing store and regularly cashes checks made payable from DME related companies. You may want to conduct and internet search of these individuals and determine if they are a physician.
What to do if you suspect DME fraudsters are taking advantage of your business to facilitate payments?
If you suspect a potential customer or customer is involved in DME fraud you should investigate to determine if any of the above red flags are involved. As always, you should ask yourself does this activity make sense given the nature of the alleged business? If you determine an existing customer is involved in DME fraud and has conducted transactions aggregating over the SAR dollar volume threshold, file a SAR. As always if you suspect a customer is involved in illegal activity you need to block them from doing business with you. No matter how profitable the relationship is, it’s not worth being fined, losing your license, or ending up in a Department of Justice press release.
Sources:
https://www.aarp.org/money/scams-fraud/info-2018/medicare-scams-fraud-identity-theft.html
https://oig.hhs.gov/compliance/physician-education/01laws.asp
Better Monitoring
Per federal and state guidelines, MSBs are required to monitor their customers’ transactions for suspicious and illegal activity.
Over the past year and a half, the Federal and State governments have issued a huge amount of money to individuals and businesses in the form of Covid-19 stimulus packages. Criminals have been exploiting this situation by committing financial crimes at an unprecedented rate. See a few examples below.
“IRVINE, Calif. (KABC) — An Irvine man allegedly obtained about $5 million in federal coronavirus-relief loans for his fake businesses and then spent the funds on himself, including buying Ferrari, Bentley and Lamborghini sports cars, according to federal authorities.”
“BOSTON — The owner of a Massachusetts pizza parlor lied about the number of employees he had to fraudulently obtain more than $660,000 in federal coronavirus relief funds, then used some of the money to buy and stock an alpaca farm in Vermont, federal prosecutors said Tuesday.”
“According to the report by the Times, Abidemi Rufai, of Lekki, Nigeria, was charged Saturday in federal court with using the identities of more than 100 Washington residents to steal more than $350,000 in unemployment benefits from the Washington state Employment Security Department (ESD) during the COVID-19 pandemic last year.”
How can you improve your quality of monitoring?
Here are some tips on how to get better:
Better Reporting
Reporting should be a natural extension of your monitoring practices. If you are making your monitoring a high priority, good reporting will naturally flow from those activities.
It is very important to file CTRs on a timely basis, within 15 days.
If you are using your check cashing software fully, it will help with the practice of reporting. Especially with CTRs, when a suspicious activity is identified, your software will trigger a CTR. In addition, it will aggregate the data on a customer, pulling all their transactions together if they have made multiple transactions at different times of the day.
Investing in additional features like these and learning how to use them minimizes mistakes.
For example, if a customer comes in three separate times during a day and cashes a $5,000 check each time, will your employees know to aggregate all of those transactions? If not, this is where the software can minimize mistakes.
We understand that your team is most likely not trying to intentionally ignore possible suspicious activity. However, if they get busy and are rushed, without these extra measures in place to catch mistakes they are more likely to make a human error that could cost you.
Our Commitment to You
One of our highest priorities and commitments to you is to make sure our BSA staff is highly qualified and properly trained.
As we seek to be a resource for you, we hold ourselves to the highest standard as well. We are in the business of compliance, so we take employee training, monitoring, and reporting very seriously.
If you have questions for our team and would like to connect, you can reach us here.
In this article we want to answer the major questions surrounding proper employee training so you can use this as a tool to improve the performance of your business.
Why you should train your employees
Most mistakes that MSBs make in their businesses are directly related to their lack of employee training.
Many mistakes can be avoided, and your business doesn’t have to suffer by being held back. But it takes a little bit of time and energy invested into best practices to create an environment that is geared towards training.
We see some MSBs focusing their time and attention in other places too often which leaves their employees unsure about how to handle certain situations. The result can come in the form of fines, slowed growth, losing your MSB license and even losing their banking relationship.
Another major reason to train employees is to fully utilize your resources and assets. For example, you are using a software for check cashing. Are you using just the surface level features or are you using it to its fullest potential? This software offers a lot of features that can make your employees’ jobs much easier and can create efficiencies that map to profitability. This asset alone could bring improvements that impact your business tremendously in the short and long term.
Employee training should be held as a high priority and taken seriously. If so, the result is a smooth operation, less drag on resources and time spent fixing mistakes and less worry about being in business in the coming months or years.
Taking employee training seriously is the first step to sustainable growth in your MSB business. It’s the foundation of everything you do and the bedrock of your business.
How to train your employees
One of the four pillars of BSA is required employee training.
Naturally, if training is not considered a high priority in your business, employees will find ways to fulfill this requirement without becoming more knowledgeable or getting better in their role. People are generally going to take the path of least resistance when it is offered to them unless you are creating an environment with a higher standard.
Taking a basic test online to fulfill training requirements isn’t always going to achieve the desired result. You’re not doing training just to say you completed it. The purpose of completing the training is to stay compliant, get better and avoid costly mistakes that can put you out of business.
Besides completing a standardized test to confirm your knowledge of the subject, employee training best practices include several other factors. We’ve listed some of them here.
Stay up to speed on current events that are happening in your industry, in your part of the region and in the world. This will give you context to trends you should be aware of and things to consider as suspicious activity.
Keeping yourself updated on topics like anti-money laundering, terrorist financing is a great place to spend some time once a week, reading articles and staying aware.
Looking up fines that other MSBs have had recently is a great way to stay on top of activities you should look out for in your business. Learning from others mistakes is a great mindset for protecting your business, not just staying compliant.
The WSJ has a section titled “compliance”. This is a great resource for keeping track of current day activities and what to look out for in your business.
The bottom line is that you should want to be the best at being compliant, because it’s a huge component to the business you’re in. To be the best, you have to seek out knowledge and resources to get better and instill that mentality in all of your employees.
As we seek to be the best in what we do, we want to be one of those resources and extend that knowledge to you so you can grow wisely.
If you have questions about employee training, please reach out to our team.
Resources for Training:
Anti-Money Laundering – https://www.acams.org/en
https://www.fincen.gov/resources/advisoriesbulletinsfact-sheets/advisories
https://www.fincen.gov/news-room/enforcement-actions
Suspicious activity reporting (SAR) enables law enforcement to initiate or supplement money laundering or terrorist financing investigations as well as other criminal cases. SARs also provide FinCEN and other federal agencies in identifying trends and patterns associated with financial crimes.
The Federal Financial Institution Examinations Council (FFIEC) website states that the most important factors for effective SAR monitoring and reporting include five key components:
• Identification or alert of unusual activity (which may include employee identification, law enforcement inquiries, other referrals, and transaction and surveillance monitoring system output).
• Managing alerts.
• SAR decision making.
• SAR completion and filing.
• Monitoring and SAR filing on continuing activity.
An effective SARs must be complete, sufficient, and filed timely. The most critical part of the SAR is the narrative. The narrative should identify the five essential elements of information (who? what? when? where? and why?) for the suspicious activity being reported. The method of operation (or how?) is also important and should be included in the narrative. Remember, you need to grab the reader’s attention with the first paragraph!
We are proud to say that we have an entire BSA Department dedicated to assist our MSB customers with questions regarding SAR filing.
Over the last decade we have worked hard to provide the absolute best and highest quality support for our MSB customers, and it has proven to support them with a high level of compliance in their businesses.
As we continue to build our banking services around our MSB customers, we look at the most important factors for sustainability and compliance and make those our goal for growth.
If you have any questions about SAR best practices or would like to speak with a BSA representative, contact us at mysuretybank.com
Cash flow is the lifeblood of any business. Whether you're managing a commercial construction firm or running a retail operation, understanding how money moves in and out of your business is key to long-term success. Poor cash flow management can leave businesses scrambling to cover expenses, even when profits look good on paper.
A recent episode of the Expandable Series discussed this in detail, but here are some fundamental cash flow principles, using commercial construction as an example, that apply to businesses across all industries.
1. Understand Your Cash Outflows
In commercial construction, significant cash outlays are required upfront for raw materials, permits, and labor. These costs must be covered well before payments from clients arrive. Similarly, in retail, manufacturers need to purchase inventory long before customers make a purchase.
A business must have enough cash on hand to cover these expenses. Without it, operations may stall, delaying projects and impacting profitability. Understanding your cash needs ahead of time ensures smoother financial management.
Example: Imagine a mid-sized construction firm, Apex Builders, takes on a new commercial office project. Before the first payment arrives, they must pay for steel beams, concrete, and skilled labor. Without proper cash reserves or a well-structured payment schedule, Apex Builders could struggle to cover these costs, potentially halting the project and damaging their reputation.
2. Time Your Cash Inflows Strategically
Revenue in commercial construction typically comes from milestone payments throughout a project or upon completion. However, these payments can be delayed due to contract terms, client approvals, or unexpected issues.
For any business, it’s essential to analyze how long it takes to convert expenses into revenue. Are you waiting 30, 60, or even 90 days to get paid? If so, your business must be structured to withstand these gaps. Ensuring that your contract terms align with your cash flow needs can prevent unnecessary financial strain.
Example: Apex Builders structures their contracts to ensure payments are received at key milestones—such as after the foundation is laid, after framing is completed, and upon final inspection. By planning these payment intervals, they reduce financial stress and ensure they always have working capital.
3. Build a Cash Buffer
One of the best strategies for managing cash flow is to build a buffer that accounts for timing discrepancies. In construction, this means having enough reserves to cover payroll and material costs while waiting for payments. The same principle applies to any business with delayed payments.
This buffer should be built into your pricing. Instead of operating on razor-thin margins, factor in potential delays and unexpected costs when setting your rates. This ensures financial stability even during slower payment periods.
Example: Apex Builders includes a 10% contingency in their project bids, ensuring that if a client delays payment or unexpected costs arise, they have the liquidity to keep operations running smoothly.
4. Plan for Payroll and Fixed Expenses
Payroll is a non-negotiable expense in any business. Employees expect timely paychecks, and failure to meet payroll obligations can lead to operational disruptions and even legal consequences.
Since payroll and other fixed expenses (like rent, utilities, and insurance) don’t change based on revenue fluctuations, they must be accounted for in advance. Forecasting these expenses over the next quarter will help ensure you always have the necessary funds available.
Example: Apex Builders schedules payments from previous projects to help cover payroll during slow months, ensuring that employees are always paid on time.
5. Look Ahead to the Next Quarter
Successful businesses don’t just think about today’s cash flow—they plan for the next quarter and beyond. What projects are in the pipeline? When will revenue from those projects be realized? What expenses need to be covered in the meantime?
By forecasting cash flow and preparing for potential shortfalls, businesses can make informed decisions about when to invest, when to hold back, and when to seek additional financing options to bridge any gaps.
Example: Apex Builders maintain a rolling cash flow projection, helping them anticipate slow periods and ensuring they never take on more projects than they can financially support at one time.
The Bottom Line
Cash flow management isn’t just about tracking numbers—it’s about planning ahead, building flexibility into your pricing, and ensuring your business can withstand the natural ebbs and flows of financial cycles. Whether you’re in commercial construction, retail, or any other industry, mastering cash flow is essential for long-term success. Surety Bank is here to help businesses navigate these challenges with financial solutions designed to keep operations running smoothly.
In the spring of 1994, Cindy walked into Surety Bank—not to apply for a job, but to apply for a mortgage. She and her family had recently moved from Michigan, and Surety was simply the place she trusted to help them settle into their new home. What she didn’t expect was that the bank would also offer her something even more life-changing—a career that would span more than three decades.
“I didn’t have to look very hard for a job,” Cindy recalls with a laugh. “They saw that I had banking experience and called me up because they needed a teller.”
It was the start of a journey that would see Cindy grow from a front-line teller to a key part of the bank’s payroll and HR team. Over the years, she became a steady presence in the bank’s evolving landscape, witnessing firsthand how technology transformed the industry. When she first started, many processes were still manual—checks were physically run through proof machines, reconciliations were done by hand, and not everyone even had a computer at their desk.
“I remember when we had to share computers,” she says. “That didn’t last too long, but things were a lot different back then.”
Cindy’s career path took her from teller to bookkeeping, then into accounting, and eventually into payroll and HR, where she found her niche. She describes her work as being part of a team that always pulled together to solve challenges—a culture of collaboration and adaptability that made Surety Bank feel like home.
“We always worked together to find solutions,” Cindy reflects. “Even though my role became more specialized over the years, it was always about teamwork.”
For Cindy, working at Surety Bank wasn’t just about the job—it was about the life it allowed her to build. Living just three miles from the bank, she was able to balance her career while staying closely involved in raising her children, supporting her husband, and nurturing her faith.
“I’ve been able to have my life at home and my life here at work,” she says. “It’s been a blessing to have a career that allowed me to be present for the things that mattered most—my family, my husband, and my faith.”
As much as she dedicated herself to her work, Cindy never lost sight of what was most important. She is deeply grateful that her time at Surety allowed her to grow professionally while still prioritizing the people she loved.
Looking back, Cindy remembers the many friendships, the changes that brought new ideas, and the way she adapted alongside the bank. Perhaps most of all, she values the relationships she built—with colleagues who became like family and customers who left a lasting impression.
Now, as she steps into retirement, Cindy is ready for a new chapter—one that revolves around her grandchildren, travel, and time with family in Michigan. It’s a bittersweet transition, but one that feels right.
“I never dreamed I’d be working someplace for 31 years,” she admits. “But as it turns out, it really went by fast.”
For those just starting their careers in banking, Cindy offers a simple but powerful piece of advice: “Be open to learning all aspects of the job. Take your time, think things through, and just go with the flow.”
After 31 years of steady dedication, Cindy leaves behind a legacy of resilience, kindness, and adaptability—a perfect reflection of the values that make Surety Bank so special. While she may be stepping away from her desk, the impact she’s made at Surety Bank will remain for years to come.
Thank you, Cindy, for 31 incredible years. Your Surety Bank family will miss you!
Durable Medical Equipment (DME) is defined as any medical equipment used in the home to aid in a better quality of living. The term includes wheelchairs, knee braces, hospital beds, nebulizers, walkers, etc. DME is a benefit included in most insurances including Medicare Part B which covers medically necessary DME that is prescribed by a physician for use in a patient’s home.
According to an AARP Bulletin titled “Medicare Under Assault From Fraudsters”, “roughly 10 cents of every dollar budgeted for the giant health insurance program is stolen or misdirected before it helps any enrollee. Malcom Sparrow, a Harvard University professor and leading expert on health care fraud, says the true amount lost to fraud, abuse or improper payments could be 20 percent, or even as high as 30 percent.” See below a graphic that puts the scale of Medicare fraud into perspective.
As you can see, DME fraud has become a huge business for criminals, and they are increasingly using MSBs to provide illegal kickbacks to physicians, launder their illegal proceeds, and take advantage of fraud victims. This behavior should disgust any American taxpayer, if not morally, think about how much of our hard-earned money over the years goes straight into these fraudsters’ pockets.
How it works:
See below an excerpt from a February 4, 2021, Department of Justice Press release titled “Florida Businesswoman Pleads Guilty to Criminal Health Care and Tax Fraud Charges and Agrees to $20.3 Million Civil False Claims Act Settlement”
[According to court documents, Wolfe and her conspirators used Regency to establish dozens of DME supply companies — or, rather, DME fronts — using trickery and deception. The scheme involved placing the DME fronts in the names of straw owners. By concealing the true ownership, Wolfe’s conspirators secretly gained control of multiple companies. With such control, they collectively submitted well over $400 million in illegal DME claims to Medicare and the Civilian Health and Medical Program of the VA. The conspirators claimed that the unusually high volume of claims reflected the use of telemedicine procedures, when, in fact, they had simply bribed doctors to approve them. Almost always, the doctors had no telehealth interaction with the beneficiaries.]
As you can see Wolfe established multiple shell companies and submitted over $400 million in illegal DME claims to Medicare and the Civilian Health and Medical Program of the VA. Another crucial element of the scheme is she bribed doctors to approve these fraudulent invoices stating they conducted telehealth services for the beneficiaries. The illegal kickbacks to doctors is what check cashing MSBs will encounter. A pattern we have picked up on is checks from companies with “Medical Equipment, DME, Braces, Devices, etc.” made payable to individuals that turn out to be physicians or money mules are likely illegal kickbacks to doctors for signing off on fraudulent DME claims.
Anti-Kickback Statute [42 U.S.C. § 1320a-7b(b)]
The AKS is a criminal law that prohibits the knowing and willful payment of “remuneration” to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs (e.g., drugs, supplies, or health care services for Medicare or Medicaid patients). Remuneration includes anything of value and can take many forms besides cash, such as free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies. In some industries, it is acceptable to reward those who refer business to you. However, in the Federal health care programs, paying for referrals is a crime. The statute covers the payers of kickbacks-those who offer or pay remuneration- as well as the recipients of kickbacks-those who solicit or receive remuneration. Each party’s intent is a key element of their liability under the AKS.
Criminal penalties and administrative sanctions for violating the AKS include fines, jail terms, and exclusion from participation in the Federal health care programs. Under the CMPL, physicians who pay or accept kickbacks also face penalties of up to $50,000 per kickback plus three times the amount of the remuneration.
Other Examples:
Red flags we have identified relating to DME fraud kickbacks are as follows:
• Maker names related to medical equipment writing checks out to individuals. The dollar amount can be random, but we see a lot in the $2,000 – $9,000 range. Less sophisticated actors will structure these payments to remain under the $10,000 CTR threshold.
• When you look up the registered agents of these DME companies on publicly available databases such as Sunbiz.org in Florida, they often control several other companies related to medical equipment that have been recently established. This is indicative of shell companies just like we saw in the above example from the DOJ press release.
• A payee that comes into the check cashing store and regularly cashes checks made payable from DME related companies. You may want to conduct and internet search of these individuals and determine if they are a physician.
What to do if you suspect DME fraudsters are taking advantage of your business to facilitate payments?
If you suspect a potential customer or customer is involved in DME fraud you should investigate to determine if any of the above red flags are involved. As always, you should ask yourself does this activity make sense given the nature of the alleged business? If you determine an existing customer is involved in DME fraud and has conducted transactions aggregating over the SAR dollar volume threshold, file a SAR. As always if you suspect a customer is involved in illegal activity you need to block them from doing business with you. No matter how profitable the relationship is, it’s not worth being fined, losing your license, or ending up in a Department of Justice press release.
Sources:
https://www.aarp.org/money/scams-fraud/info-2018/medicare-scams-fraud-identity-theft.html
https://oig.hhs.gov/compliance/physician-education/01laws.asp
Better Monitoring
Per federal and state guidelines, MSBs are required to monitor their customers’ transactions for suspicious and illegal activity.
Over the past year and a half, the Federal and State governments have issued a huge amount of money to individuals and businesses in the form of Covid-19 stimulus packages. Criminals have been exploiting this situation by committing financial crimes at an unprecedented rate. See a few examples below.
“IRVINE, Calif. (KABC) — An Irvine man allegedly obtained about $5 million in federal coronavirus-relief loans for his fake businesses and then spent the funds on himself, including buying Ferrari, Bentley and Lamborghini sports cars, according to federal authorities.”
“BOSTON — The owner of a Massachusetts pizza parlor lied about the number of employees he had to fraudulently obtain more than $660,000 in federal coronavirus relief funds, then used some of the money to buy and stock an alpaca farm in Vermont, federal prosecutors said Tuesday.”
“According to the report by the Times, Abidemi Rufai, of Lekki, Nigeria, was charged Saturday in federal court with using the identities of more than 100 Washington residents to steal more than $350,000 in unemployment benefits from the Washington state Employment Security Department (ESD) during the COVID-19 pandemic last year.”
How can you improve your quality of monitoring?
Here are some tips on how to get better:
Better Reporting
Reporting should be a natural extension of your monitoring practices. If you are making your monitoring a high priority, good reporting will naturally flow from those activities.
It is very important to file CTRs on a timely basis, within 15 days.
If you are using your check cashing software fully, it will help with the practice of reporting. Especially with CTRs, when a suspicious activity is identified, your software will trigger a CTR. In addition, it will aggregate the data on a customer, pulling all their transactions together if they have made multiple transactions at different times of the day.
Investing in additional features like these and learning how to use them minimizes mistakes.
For example, if a customer comes in three separate times during a day and cashes a $5,000 check each time, will your employees know to aggregate all of those transactions? If not, this is where the software can minimize mistakes.
We understand that your team is most likely not trying to intentionally ignore possible suspicious activity. However, if they get busy and are rushed, without these extra measures in place to catch mistakes they are more likely to make a human error that could cost you.
Our Commitment to You
One of our highest priorities and commitments to you is to make sure our BSA staff is highly qualified and properly trained.
As we seek to be a resource for you, we hold ourselves to the highest standard as well. We are in the business of compliance, so we take employee training, monitoring, and reporting very seriously.
If you have questions for our team and would like to connect, you can reach us here.
In this article we want to answer the major questions surrounding proper employee training so you can use this as a tool to improve the performance of your business.
Why you should train your employees
Most mistakes that MSBs make in their businesses are directly related to their lack of employee training.
Many mistakes can be avoided, and your business doesn’t have to suffer by being held back. But it takes a little bit of time and energy invested into best practices to create an environment that is geared towards training.
We see some MSBs focusing their time and attention in other places too often which leaves their employees unsure about how to handle certain situations. The result can come in the form of fines, slowed growth, losing your MSB license and even losing their banking relationship.
Another major reason to train employees is to fully utilize your resources and assets. For example, you are using a software for check cashing. Are you using just the surface level features or are you using it to its fullest potential? This software offers a lot of features that can make your employees’ jobs much easier and can create efficiencies that map to profitability. This asset alone could bring improvements that impact your business tremendously in the short and long term.
Employee training should be held as a high priority and taken seriously. If so, the result is a smooth operation, less drag on resources and time spent fixing mistakes and less worry about being in business in the coming months or years.
Taking employee training seriously is the first step to sustainable growth in your MSB business. It’s the foundation of everything you do and the bedrock of your business.
How to train your employees
One of the four pillars of BSA is required employee training.
Naturally, if training is not considered a high priority in your business, employees will find ways to fulfill this requirement without becoming more knowledgeable or getting better in their role. People are generally going to take the path of least resistance when it is offered to them unless you are creating an environment with a higher standard.
Taking a basic test online to fulfill training requirements isn’t always going to achieve the desired result. You’re not doing training just to say you completed it. The purpose of completing the training is to stay compliant, get better and avoid costly mistakes that can put you out of business.
Besides completing a standardized test to confirm your knowledge of the subject, employee training best practices include several other factors. We’ve listed some of them here.
Stay up to speed on current events that are happening in your industry, in your part of the region and in the world. This will give you context to trends you should be aware of and things to consider as suspicious activity.
Keeping yourself updated on topics like anti-money laundering, terrorist financing is a great place to spend some time once a week, reading articles and staying aware.
Looking up fines that other MSBs have had recently is a great way to stay on top of activities you should look out for in your business. Learning from others mistakes is a great mindset for protecting your business, not just staying compliant.
The WSJ has a section titled “compliance”. This is a great resource for keeping track of current day activities and what to look out for in your business.
The bottom line is that you should want to be the best at being compliant, because it’s a huge component to the business you’re in. To be the best, you have to seek out knowledge and resources to get better and instill that mentality in all of your employees.
As we seek to be the best in what we do, we want to be one of those resources and extend that knowledge to you so you can grow wisely.
If you have questions about employee training, please reach out to our team.
Resources for Training:
Anti-Money Laundering – https://www.acams.org/en
https://www.fincen.gov/resources/advisoriesbulletinsfact-sheets/advisories
https://www.fincen.gov/news-room/enforcement-actions
Suspicious activity reporting (SAR) enables law enforcement to initiate or supplement money laundering or terrorist financing investigations as well as other criminal cases. SARs also provide FinCEN and other federal agencies in identifying trends and patterns associated with financial crimes.
The Federal Financial Institution Examinations Council (FFIEC) website states that the most important factors for effective SAR monitoring and reporting include five key components:
• Identification or alert of unusual activity (which may include employee identification, law enforcement inquiries, other referrals, and transaction and surveillance monitoring system output).
• Managing alerts.
• SAR decision making.
• SAR completion and filing.
• Monitoring and SAR filing on continuing activity.
An effective SARs must be complete, sufficient, and filed timely. The most critical part of the SAR is the narrative. The narrative should identify the five essential elements of information (who? what? when? where? and why?) for the suspicious activity being reported. The method of operation (or how?) is also important and should be included in the narrative. Remember, you need to grab the reader’s attention with the first paragraph!
We are proud to say that we have an entire BSA Department dedicated to assist our MSB customers with questions regarding SAR filing.
Over the last decade we have worked hard to provide the absolute best and highest quality support for our MSB customers, and it has proven to support them with a high level of compliance in their businesses.
As we continue to build our banking services around our MSB customers, we look at the most important factors for sustainability and compliance and make those our goal for growth.
If you have any questions about SAR best practices or would like to speak with a BSA representative, contact us at mysuretybank.com
Cash flow is the lifeblood of any business. Whether you're managing a commercial construction firm or running a retail operation, understanding how money moves in and out of your business is key to long-term success. Poor cash flow management can leave businesses scrambling to cover expenses, even when profits look good on paper.
A recent episode of the Expandable Series discussed this in detail, but here are some fundamental cash flow principles, using commercial construction as an example, that apply to businesses across all industries.
1. Understand Your Cash Outflows
In commercial construction, significant cash outlays are required upfront for raw materials, permits, and labor. These costs must be covered well before payments from clients arrive. Similarly, in retail, manufacturers need to purchase inventory long before customers make a purchase.
A business must have enough cash on hand to cover these expenses. Without it, operations may stall, delaying projects and impacting profitability. Understanding your cash needs ahead of time ensures smoother financial management.
Example: Imagine a mid-sized construction firm, Apex Builders, takes on a new commercial office project. Before the first payment arrives, they must pay for steel beams, concrete, and skilled labor. Without proper cash reserves or a well-structured payment schedule, Apex Builders could struggle to cover these costs, potentially halting the project and damaging their reputation.
2. Time Your Cash Inflows Strategically
Revenue in commercial construction typically comes from milestone payments throughout a project or upon completion. However, these payments can be delayed due to contract terms, client approvals, or unexpected issues.
For any business, it’s essential to analyze how long it takes to convert expenses into revenue. Are you waiting 30, 60, or even 90 days to get paid? If so, your business must be structured to withstand these gaps. Ensuring that your contract terms align with your cash flow needs can prevent unnecessary financial strain.
Example: Apex Builders structures their contracts to ensure payments are received at key milestones—such as after the foundation is laid, after framing is completed, and upon final inspection. By planning these payment intervals, they reduce financial stress and ensure they always have working capital.
3. Build a Cash Buffer
One of the best strategies for managing cash flow is to build a buffer that accounts for timing discrepancies. In construction, this means having enough reserves to cover payroll and material costs while waiting for payments. The same principle applies to any business with delayed payments.
This buffer should be built into your pricing. Instead of operating on razor-thin margins, factor in potential delays and unexpected costs when setting your rates. This ensures financial stability even during slower payment periods.
Example: Apex Builders includes a 10% contingency in their project bids, ensuring that if a client delays payment or unexpected costs arise, they have the liquidity to keep operations running smoothly.
4. Plan for Payroll and Fixed Expenses
Payroll is a non-negotiable expense in any business. Employees expect timely paychecks, and failure to meet payroll obligations can lead to operational disruptions and even legal consequences.
Since payroll and other fixed expenses (like rent, utilities, and insurance) don’t change based on revenue fluctuations, they must be accounted for in advance. Forecasting these expenses over the next quarter will help ensure you always have the necessary funds available.
Example: Apex Builders schedules payments from previous projects to help cover payroll during slow months, ensuring that employees are always paid on time.
5. Look Ahead to the Next Quarter
Successful businesses don’t just think about today’s cash flow—they plan for the next quarter and beyond. What projects are in the pipeline? When will revenue from those projects be realized? What expenses need to be covered in the meantime?
By forecasting cash flow and preparing for potential shortfalls, businesses can make informed decisions about when to invest, when to hold back, and when to seek additional financing options to bridge any gaps.
Example: Apex Builders maintain a rolling cash flow projection, helping them anticipate slow periods and ensuring they never take on more projects than they can financially support at one time.
The Bottom Line
Cash flow management isn’t just about tracking numbers—it’s about planning ahead, building flexibility into your pricing, and ensuring your business can withstand the natural ebbs and flows of financial cycles. Whether you’re in commercial construction, retail, or any other industry, mastering cash flow is essential for long-term success. Surety Bank is here to help businesses navigate these challenges with financial solutions designed to keep operations running smoothly.
In the spring of 1994, Cindy walked into Surety Bank—not to apply for a job, but to apply for a mortgage. She and her family had recently moved from Michigan, and Surety was simply the place she trusted to help them settle into their new home. What she didn’t expect was that the bank would also offer her something even more life-changing—a career that would span more than three decades.
“I didn’t have to look very hard for a job,” Cindy recalls with a laugh. “They saw that I had banking experience and called me up because they needed a teller.”
It was the start of a journey that would see Cindy grow from a front-line teller to a key part of the bank’s payroll and HR team. Over the years, she became a steady presence in the bank’s evolving landscape, witnessing firsthand how technology transformed the industry. When she first started, many processes were still manual—checks were physically run through proof machines, reconciliations were done by hand, and not everyone even had a computer at their desk.
“I remember when we had to share computers,” she says. “That didn’t last too long, but things were a lot different back then.”
Cindy’s career path took her from teller to bookkeeping, then into accounting, and eventually into payroll and HR, where she found her niche. She describes her work as being part of a team that always pulled together to solve challenges—a culture of collaboration and adaptability that made Surety Bank feel like home.
“We always worked together to find solutions,” Cindy reflects. “Even though my role became more specialized over the years, it was always about teamwork.”
For Cindy, working at Surety Bank wasn’t just about the job—it was about the life it allowed her to build. Living just three miles from the bank, she was able to balance her career while staying closely involved in raising her children, supporting her husband, and nurturing her faith.
“I’ve been able to have my life at home and my life here at work,” she says. “It’s been a blessing to have a career that allowed me to be present for the things that mattered most—my family, my husband, and my faith.”
As much as she dedicated herself to her work, Cindy never lost sight of what was most important. She is deeply grateful that her time at Surety allowed her to grow professionally while still prioritizing the people she loved.
Looking back, Cindy remembers the many friendships, the changes that brought new ideas, and the way she adapted alongside the bank. Perhaps most of all, she values the relationships she built—with colleagues who became like family and customers who left a lasting impression.
Now, as she steps into retirement, Cindy is ready for a new chapter—one that revolves around her grandchildren, travel, and time with family in Michigan. It’s a bittersweet transition, but one that feels right.
“I never dreamed I’d be working someplace for 31 years,” she admits. “But as it turns out, it really went by fast.”
For those just starting their careers in banking, Cindy offers a simple but powerful piece of advice: “Be open to learning all aspects of the job. Take your time, think things through, and just go with the flow.”
After 31 years of steady dedication, Cindy leaves behind a legacy of resilience, kindness, and adaptability—a perfect reflection of the values that make Surety Bank so special. While she may be stepping away from her desk, the impact she’s made at Surety Bank will remain for years to come.
Thank you, Cindy, for 31 incredible years. Your Surety Bank family will miss you!
Durable Medical Equipment (DME) is defined as any medical equipment used in the home to aid in a better quality of living. The term includes wheelchairs, knee braces, hospital beds, nebulizers, walkers, etc. DME is a benefit included in most insurances including Medicare Part B which covers medically necessary DME that is prescribed by a physician for use in a patient’s home.
According to an AARP Bulletin titled “Medicare Under Assault From Fraudsters”, “roughly 10 cents of every dollar budgeted for the giant health insurance program is stolen or misdirected before it helps any enrollee. Malcom Sparrow, a Harvard University professor and leading expert on health care fraud, says the true amount lost to fraud, abuse or improper payments could be 20 percent, or even as high as 30 percent.” See below a graphic that puts the scale of Medicare fraud into perspective.
As you can see, DME fraud has become a huge business for criminals, and they are increasingly using MSBs to provide illegal kickbacks to physicians, launder their illegal proceeds, and take advantage of fraud victims. This behavior should disgust any American taxpayer, if not morally, think about how much of our hard-earned money over the years goes straight into these fraudsters’ pockets.
How it works:
See below an excerpt from a February 4, 2021, Department of Justice Press release titled “Florida Businesswoman Pleads Guilty to Criminal Health Care and Tax Fraud Charges and Agrees to $20.3 Million Civil False Claims Act Settlement”
[According to court documents, Wolfe and her conspirators used Regency to establish dozens of DME supply companies — or, rather, DME fronts — using trickery and deception. The scheme involved placing the DME fronts in the names of straw owners. By concealing the true ownership, Wolfe’s conspirators secretly gained control of multiple companies. With such control, they collectively submitted well over $400 million in illegal DME claims to Medicare and the Civilian Health and Medical Program of the VA. The conspirators claimed that the unusually high volume of claims reflected the use of telemedicine procedures, when, in fact, they had simply bribed doctors to approve them. Almost always, the doctors had no telehealth interaction with the beneficiaries.]
As you can see Wolfe established multiple shell companies and submitted over $400 million in illegal DME claims to Medicare and the Civilian Health and Medical Program of the VA. Another crucial element of the scheme is she bribed doctors to approve these fraudulent invoices stating they conducted telehealth services for the beneficiaries. The illegal kickbacks to doctors is what check cashing MSBs will encounter. A pattern we have picked up on is checks from companies with “Medical Equipment, DME, Braces, Devices, etc.” made payable to individuals that turn out to be physicians or money mules are likely illegal kickbacks to doctors for signing off on fraudulent DME claims.
Anti-Kickback Statute [42 U.S.C. § 1320a-7b(b)]
The AKS is a criminal law that prohibits the knowing and willful payment of “remuneration” to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs (e.g., drugs, supplies, or health care services for Medicare or Medicaid patients). Remuneration includes anything of value and can take many forms besides cash, such as free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies. In some industries, it is acceptable to reward those who refer business to you. However, in the Federal health care programs, paying for referrals is a crime. The statute covers the payers of kickbacks-those who offer or pay remuneration- as well as the recipients of kickbacks-those who solicit or receive remuneration. Each party’s intent is a key element of their liability under the AKS.
Criminal penalties and administrative sanctions for violating the AKS include fines, jail terms, and exclusion from participation in the Federal health care programs. Under the CMPL, physicians who pay or accept kickbacks also face penalties of up to $50,000 per kickback plus three times the amount of the remuneration.
Other Examples:
Red flags we have identified relating to DME fraud kickbacks are as follows:
• Maker names related to medical equipment writing checks out to individuals. The dollar amount can be random, but we see a lot in the $2,000 – $9,000 range. Less sophisticated actors will structure these payments to remain under the $10,000 CTR threshold.
• When you look up the registered agents of these DME companies on publicly available databases such as Sunbiz.org in Florida, they often control several other companies related to medical equipment that have been recently established. This is indicative of shell companies just like we saw in the above example from the DOJ press release.
• A payee that comes into the check cashing store and regularly cashes checks made payable from DME related companies. You may want to conduct and internet search of these individuals and determine if they are a physician.
What to do if you suspect DME fraudsters are taking advantage of your business to facilitate payments?
If you suspect a potential customer or customer is involved in DME fraud you should investigate to determine if any of the above red flags are involved. As always, you should ask yourself does this activity make sense given the nature of the alleged business? If you determine an existing customer is involved in DME fraud and has conducted transactions aggregating over the SAR dollar volume threshold, file a SAR. As always if you suspect a customer is involved in illegal activity you need to block them from doing business with you. No matter how profitable the relationship is, it’s not worth being fined, losing your license, or ending up in a Department of Justice press release.
Sources:
https://www.aarp.org/money/scams-fraud/info-2018/medicare-scams-fraud-identity-theft.html
https://oig.hhs.gov/compliance/physician-education/01laws.asp
Better Monitoring
Per federal and state guidelines, MSBs are required to monitor their customers’ transactions for suspicious and illegal activity.
Over the past year and a half, the Federal and State governments have issued a huge amount of money to individuals and businesses in the form of Covid-19 stimulus packages. Criminals have been exploiting this situation by committing financial crimes at an unprecedented rate. See a few examples below.
“IRVINE, Calif. (KABC) — An Irvine man allegedly obtained about $5 million in federal coronavirus-relief loans for his fake businesses and then spent the funds on himself, including buying Ferrari, Bentley and Lamborghini sports cars, according to federal authorities.”
“BOSTON — The owner of a Massachusetts pizza parlor lied about the number of employees he had to fraudulently obtain more than $660,000 in federal coronavirus relief funds, then used some of the money to buy and stock an alpaca farm in Vermont, federal prosecutors said Tuesday.”
“According to the report by the Times, Abidemi Rufai, of Lekki, Nigeria, was charged Saturday in federal court with using the identities of more than 100 Washington residents to steal more than $350,000 in unemployment benefits from the Washington state Employment Security Department (ESD) during the COVID-19 pandemic last year.”
How can you improve your quality of monitoring?
Here are some tips on how to get better:
Better Reporting
Reporting should be a natural extension of your monitoring practices. If you are making your monitoring a high priority, good reporting will naturally flow from those activities.
It is very important to file CTRs on a timely basis, within 15 days.
If you are using your check cashing software fully, it will help with the practice of reporting. Especially with CTRs, when a suspicious activity is identified, your software will trigger a CTR. In addition, it will aggregate the data on a customer, pulling all their transactions together if they have made multiple transactions at different times of the day.
Investing in additional features like these and learning how to use them minimizes mistakes.
For example, if a customer comes in three separate times during a day and cashes a $5,000 check each time, will your employees know to aggregate all of those transactions? If not, this is where the software can minimize mistakes.
We understand that your team is most likely not trying to intentionally ignore possible suspicious activity. However, if they get busy and are rushed, without these extra measures in place to catch mistakes they are more likely to make a human error that could cost you.
Our Commitment to You
One of our highest priorities and commitments to you is to make sure our BSA staff is highly qualified and properly trained.
As we seek to be a resource for you, we hold ourselves to the highest standard as well. We are in the business of compliance, so we take employee training, monitoring, and reporting very seriously.
If you have questions for our team and would like to connect, you can reach us here.
In this article we want to answer the major questions surrounding proper employee training so you can use this as a tool to improve the performance of your business.
Why you should train your employees
Most mistakes that MSBs make in their businesses are directly related to their lack of employee training.
Many mistakes can be avoided, and your business doesn’t have to suffer by being held back. But it takes a little bit of time and energy invested into best practices to create an environment that is geared towards training.
We see some MSBs focusing their time and attention in other places too often which leaves their employees unsure about how to handle certain situations. The result can come in the form of fines, slowed growth, losing your MSB license and even losing their banking relationship.
Another major reason to train employees is to fully utilize your resources and assets. For example, you are using a software for check cashing. Are you using just the surface level features or are you using it to its fullest potential? This software offers a lot of features that can make your employees’ jobs much easier and can create efficiencies that map to profitability. This asset alone could bring improvements that impact your business tremendously in the short and long term.
Employee training should be held as a high priority and taken seriously. If so, the result is a smooth operation, less drag on resources and time spent fixing mistakes and less worry about being in business in the coming months or years.
Taking employee training seriously is the first step to sustainable growth in your MSB business. It’s the foundation of everything you do and the bedrock of your business.
How to train your employees
One of the four pillars of BSA is required employee training.
Naturally, if training is not considered a high priority in your business, employees will find ways to fulfill this requirement without becoming more knowledgeable or getting better in their role. People are generally going to take the path of least resistance when it is offered to them unless you are creating an environment with a higher standard.
Taking a basic test online to fulfill training requirements isn’t always going to achieve the desired result. You’re not doing training just to say you completed it. The purpose of completing the training is to stay compliant, get better and avoid costly mistakes that can put you out of business.
Besides completing a standardized test to confirm your knowledge of the subject, employee training best practices include several other factors. We’ve listed some of them here.
Stay up to speed on current events that are happening in your industry, in your part of the region and in the world. This will give you context to trends you should be aware of and things to consider as suspicious activity.
Keeping yourself updated on topics like anti-money laundering, terrorist financing is a great place to spend some time once a week, reading articles and staying aware.
Looking up fines that other MSBs have had recently is a great way to stay on top of activities you should look out for in your business. Learning from others mistakes is a great mindset for protecting your business, not just staying compliant.
The WSJ has a section titled “compliance”. This is a great resource for keeping track of current day activities and what to look out for in your business.
The bottom line is that you should want to be the best at being compliant, because it’s a huge component to the business you’re in. To be the best, you have to seek out knowledge and resources to get better and instill that mentality in all of your employees.
As we seek to be the best in what we do, we want to be one of those resources and extend that knowledge to you so you can grow wisely.
If you have questions about employee training, please reach out to our team.
Resources for Training:
Anti-Money Laundering – https://www.acams.org/en
https://www.fincen.gov/resources/advisoriesbulletinsfact-sheets/advisories
https://www.fincen.gov/news-room/enforcement-actions
Suspicious activity reporting (SAR) enables law enforcement to initiate or supplement money laundering or terrorist financing investigations as well as other criminal cases. SARs also provide FinCEN and other federal agencies in identifying trends and patterns associated with financial crimes.
The Federal Financial Institution Examinations Council (FFIEC) website states that the most important factors for effective SAR monitoring and reporting include five key components:
• Identification or alert of unusual activity (which may include employee identification, law enforcement inquiries, other referrals, and transaction and surveillance monitoring system output).
• Managing alerts.
• SAR decision making.
• SAR completion and filing.
• Monitoring and SAR filing on continuing activity.
An effective SARs must be complete, sufficient, and filed timely. The most critical part of the SAR is the narrative. The narrative should identify the five essential elements of information (who? what? when? where? and why?) for the suspicious activity being reported. The method of operation (or how?) is also important and should be included in the narrative. Remember, you need to grab the reader’s attention with the first paragraph!
We are proud to say that we have an entire BSA Department dedicated to assist our MSB customers with questions regarding SAR filing.
Over the last decade we have worked hard to provide the absolute best and highest quality support for our MSB customers, and it has proven to support them with a high level of compliance in their businesses.
As we continue to build our banking services around our MSB customers, we look at the most important factors for sustainability and compliance and make those our goal for growth.
If you have any questions about SAR best practices or would like to speak with a BSA representative, contact us at mysuretybank.com
Cash flow is the lifeblood of any business. Whether you're managing a commercial construction firm or running a retail operation, understanding how money moves in and out of your business is key to long-term success. Poor cash flow management can leave businesses scrambling to cover expenses, even when profits look good on paper.
A recent episode of the Expandable Series discussed this in detail, but here are some fundamental cash flow principles, using commercial construction as an example, that apply to businesses across all industries.
1. Understand Your Cash Outflows
In commercial construction, significant cash outlays are required upfront for raw materials, permits, and labor. These costs must be covered well before payments from clients arrive. Similarly, in retail, manufacturers need to purchase inventory long before customers make a purchase.
A business must have enough cash on hand to cover these expenses. Without it, operations may stall, delaying projects and impacting profitability. Understanding your cash needs ahead of time ensures smoother financial management.
Example: Imagine a mid-sized construction firm, Apex Builders, takes on a new commercial office project. Before the first payment arrives, they must pay for steel beams, concrete, and skilled labor. Without proper cash reserves or a well-structured payment schedule, Apex Builders could struggle to cover these costs, potentially halting the project and damaging their reputation.
2. Time Your Cash Inflows Strategically
Revenue in commercial construction typically comes from milestone payments throughout a project or upon completion. However, these payments can be delayed due to contract terms, client approvals, or unexpected issues.
For any business, it’s essential to analyze how long it takes to convert expenses into revenue. Are you waiting 30, 60, or even 90 days to get paid? If so, your business must be structured to withstand these gaps. Ensuring that your contract terms align with your cash flow needs can prevent unnecessary financial strain.
Example: Apex Builders structures their contracts to ensure payments are received at key milestones—such as after the foundation is laid, after framing is completed, and upon final inspection. By planning these payment intervals, they reduce financial stress and ensure they always have working capital.
3. Build a Cash Buffer
One of the best strategies for managing cash flow is to build a buffer that accounts for timing discrepancies. In construction, this means having enough reserves to cover payroll and material costs while waiting for payments. The same principle applies to any business with delayed payments.
This buffer should be built into your pricing. Instead of operating on razor-thin margins, factor in potential delays and unexpected costs when setting your rates. This ensures financial stability even during slower payment periods.
Example: Apex Builders includes a 10% contingency in their project bids, ensuring that if a client delays payment or unexpected costs arise, they have the liquidity to keep operations running smoothly.
4. Plan for Payroll and Fixed Expenses
Payroll is a non-negotiable expense in any business. Employees expect timely paychecks, and failure to meet payroll obligations can lead to operational disruptions and even legal consequences.
Since payroll and other fixed expenses (like rent, utilities, and insurance) don’t change based on revenue fluctuations, they must be accounted for in advance. Forecasting these expenses over the next quarter will help ensure you always have the necessary funds available.
Example: Apex Builders schedules payments from previous projects to help cover payroll during slow months, ensuring that employees are always paid on time.
5. Look Ahead to the Next Quarter
Successful businesses don’t just think about today’s cash flow—they plan for the next quarter and beyond. What projects are in the pipeline? When will revenue from those projects be realized? What expenses need to be covered in the meantime?
By forecasting cash flow and preparing for potential shortfalls, businesses can make informed decisions about when to invest, when to hold back, and when to seek additional financing options to bridge any gaps.
Example: Apex Builders maintain a rolling cash flow projection, helping them anticipate slow periods and ensuring they never take on more projects than they can financially support at one time.
The Bottom Line
Cash flow management isn’t just about tracking numbers—it’s about planning ahead, building flexibility into your pricing, and ensuring your business can withstand the natural ebbs and flows of financial cycles. Whether you’re in commercial construction, retail, or any other industry, mastering cash flow is essential for long-term success. Surety Bank is here to help businesses navigate these challenges with financial solutions designed to keep operations running smoothly.
In the spring of 1994, Cindy walked into Surety Bank—not to apply for a job, but to apply for a mortgage. She and her family had recently moved from Michigan, and Surety was simply the place she trusted to help them settle into their new home. What she didn’t expect was that the bank would also offer her something even more life-changing—a career that would span more than three decades.
“I didn’t have to look very hard for a job,” Cindy recalls with a laugh. “They saw that I had banking experience and called me up because they needed a teller.”
It was the start of a journey that would see Cindy grow from a front-line teller to a key part of the bank’s payroll and HR team. Over the years, she became a steady presence in the bank’s evolving landscape, witnessing firsthand how technology transformed the industry. When she first started, many processes were still manual—checks were physically run through proof machines, reconciliations were done by hand, and not everyone even had a computer at their desk.
“I remember when we had to share computers,” she says. “That didn’t last too long, but things were a lot different back then.”
Cindy’s career path took her from teller to bookkeeping, then into accounting, and eventually into payroll and HR, where she found her niche. She describes her work as being part of a team that always pulled together to solve challenges—a culture of collaboration and adaptability that made Surety Bank feel like home.
“We always worked together to find solutions,” Cindy reflects. “Even though my role became more specialized over the years, it was always about teamwork.”
For Cindy, working at Surety Bank wasn’t just about the job—it was about the life it allowed her to build. Living just three miles from the bank, she was able to balance her career while staying closely involved in raising her children, supporting her husband, and nurturing her faith.
“I’ve been able to have my life at home and my life here at work,” she says. “It’s been a blessing to have a career that allowed me to be present for the things that mattered most—my family, my husband, and my faith.”
As much as she dedicated herself to her work, Cindy never lost sight of what was most important. She is deeply grateful that her time at Surety allowed her to grow professionally while still prioritizing the people she loved.
Looking back, Cindy remembers the many friendships, the changes that brought new ideas, and the way she adapted alongside the bank. Perhaps most of all, she values the relationships she built—with colleagues who became like family and customers who left a lasting impression.
Now, as she steps into retirement, Cindy is ready for a new chapter—one that revolves around her grandchildren, travel, and time with family in Michigan. It’s a bittersweet transition, but one that feels right.
“I never dreamed I’d be working someplace for 31 years,” she admits. “But as it turns out, it really went by fast.”
For those just starting their careers in banking, Cindy offers a simple but powerful piece of advice: “Be open to learning all aspects of the job. Take your time, think things through, and just go with the flow.”
After 31 years of steady dedication, Cindy leaves behind a legacy of resilience, kindness, and adaptability—a perfect reflection of the values that make Surety Bank so special. While she may be stepping away from her desk, the impact she’s made at Surety Bank will remain for years to come.
Thank you, Cindy, for 31 incredible years. Your Surety Bank family will miss you!
Durable Medical Equipment (DME) is defined as any medical equipment used in the home to aid in a better quality of living. The term includes wheelchairs, knee braces, hospital beds, nebulizers, walkers, etc. DME is a benefit included in most insurances including Medicare Part B which covers medically necessary DME that is prescribed by a physician for use in a patient’s home.
According to an AARP Bulletin titled “Medicare Under Assault From Fraudsters”, “roughly 10 cents of every dollar budgeted for the giant health insurance program is stolen or misdirected before it helps any enrollee. Malcom Sparrow, a Harvard University professor and leading expert on health care fraud, says the true amount lost to fraud, abuse or improper payments could be 20 percent, or even as high as 30 percent.” See below a graphic that puts the scale of Medicare fraud into perspective.
As you can see, DME fraud has become a huge business for criminals, and they are increasingly using MSBs to provide illegal kickbacks to physicians, launder their illegal proceeds, and take advantage of fraud victims. This behavior should disgust any American taxpayer, if not morally, think about how much of our hard-earned money over the years goes straight into these fraudsters’ pockets.
How it works:
See below an excerpt from a February 4, 2021, Department of Justice Press release titled “Florida Businesswoman Pleads Guilty to Criminal Health Care and Tax Fraud Charges and Agrees to $20.3 Million Civil False Claims Act Settlement”
[According to court documents, Wolfe and her conspirators used Regency to establish dozens of DME supply companies — or, rather, DME fronts — using trickery and deception. The scheme involved placing the DME fronts in the names of straw owners. By concealing the true ownership, Wolfe’s conspirators secretly gained control of multiple companies. With such control, they collectively submitted well over $400 million in illegal DME claims to Medicare and the Civilian Health and Medical Program of the VA. The conspirators claimed that the unusually high volume of claims reflected the use of telemedicine procedures, when, in fact, they had simply bribed doctors to approve them. Almost always, the doctors had no telehealth interaction with the beneficiaries.]
As you can see Wolfe established multiple shell companies and submitted over $400 million in illegal DME claims to Medicare and the Civilian Health and Medical Program of the VA. Another crucial element of the scheme is she bribed doctors to approve these fraudulent invoices stating they conducted telehealth services for the beneficiaries. The illegal kickbacks to doctors is what check cashing MSBs will encounter. A pattern we have picked up on is checks from companies with “Medical Equipment, DME, Braces, Devices, etc.” made payable to individuals that turn out to be physicians or money mules are likely illegal kickbacks to doctors for signing off on fraudulent DME claims.
Anti-Kickback Statute [42 U.S.C. § 1320a-7b(b)]
The AKS is a criminal law that prohibits the knowing and willful payment of “remuneration” to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs (e.g., drugs, supplies, or health care services for Medicare or Medicaid patients). Remuneration includes anything of value and can take many forms besides cash, such as free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies. In some industries, it is acceptable to reward those who refer business to you. However, in the Federal health care programs, paying for referrals is a crime. The statute covers the payers of kickbacks-those who offer or pay remuneration- as well as the recipients of kickbacks-those who solicit or receive remuneration. Each party’s intent is a key element of their liability under the AKS.
Criminal penalties and administrative sanctions for violating the AKS include fines, jail terms, and exclusion from participation in the Federal health care programs. Under the CMPL, physicians who pay or accept kickbacks also face penalties of up to $50,000 per kickback plus three times the amount of the remuneration.
Other Examples:
Red flags we have identified relating to DME fraud kickbacks are as follows:
• Maker names related to medical equipment writing checks out to individuals. The dollar amount can be random, but we see a lot in the $2,000 – $9,000 range. Less sophisticated actors will structure these payments to remain under the $10,000 CTR threshold.
• When you look up the registered agents of these DME companies on publicly available databases such as Sunbiz.org in Florida, they often control several other companies related to medical equipment that have been recently established. This is indicative of shell companies just like we saw in the above example from the DOJ press release.
• A payee that comes into the check cashing store and regularly cashes checks made payable from DME related companies. You may want to conduct and internet search of these individuals and determine if they are a physician.
What to do if you suspect DME fraudsters are taking advantage of your business to facilitate payments?
If you suspect a potential customer or customer is involved in DME fraud you should investigate to determine if any of the above red flags are involved. As always, you should ask yourself does this activity make sense given the nature of the alleged business? If you determine an existing customer is involved in DME fraud and has conducted transactions aggregating over the SAR dollar volume threshold, file a SAR. As always if you suspect a customer is involved in illegal activity you need to block them from doing business with you. No matter how profitable the relationship is, it’s not worth being fined, losing your license, or ending up in a Department of Justice press release.
Sources:
https://www.aarp.org/money/scams-fraud/info-2018/medicare-scams-fraud-identity-theft.html
https://oig.hhs.gov/compliance/physician-education/01laws.asp
Better Monitoring
Per federal and state guidelines, MSBs are required to monitor their customers’ transactions for suspicious and illegal activity.
Over the past year and a half, the Federal and State governments have issued a huge amount of money to individuals and businesses in the form of Covid-19 stimulus packages. Criminals have been exploiting this situation by committing financial crimes at an unprecedented rate. See a few examples below.
“IRVINE, Calif. (KABC) — An Irvine man allegedly obtained about $5 million in federal coronavirus-relief loans for his fake businesses and then spent the funds on himself, including buying Ferrari, Bentley and Lamborghini sports cars, according to federal authorities.”
“BOSTON — The owner of a Massachusetts pizza parlor lied about the number of employees he had to fraudulently obtain more than $660,000 in federal coronavirus relief funds, then used some of the money to buy and stock an alpaca farm in Vermont, federal prosecutors said Tuesday.”
“According to the report by the Times, Abidemi Rufai, of Lekki, Nigeria, was charged Saturday in federal court with using the identities of more than 100 Washington residents to steal more than $350,000 in unemployment benefits from the Washington state Employment Security Department (ESD) during the COVID-19 pandemic last year.”
How can you improve your quality of monitoring?
Here are some tips on how to get better:
Better Reporting
Reporting should be a natural extension of your monitoring practices. If you are making your monitoring a high priority, good reporting will naturally flow from those activities.
It is very important to file CTRs on a timely basis, within 15 days.
If you are using your check cashing software fully, it will help with the practice of reporting. Especially with CTRs, when a suspicious activity is identified, your software will trigger a CTR. In addition, it will aggregate the data on a customer, pulling all their transactions together if they have made multiple transactions at different times of the day.
Investing in additional features like these and learning how to use them minimizes mistakes.
For example, if a customer comes in three separate times during a day and cashes a $5,000 check each time, will your employees know to aggregate all of those transactions? If not, this is where the software can minimize mistakes.
We understand that your team is most likely not trying to intentionally ignore possible suspicious activity. However, if they get busy and are rushed, without these extra measures in place to catch mistakes they are more likely to make a human error that could cost you.
Our Commitment to You
One of our highest priorities and commitments to you is to make sure our BSA staff is highly qualified and properly trained.
As we seek to be a resource for you, we hold ourselves to the highest standard as well. We are in the business of compliance, so we take employee training, monitoring, and reporting very seriously.
If you have questions for our team and would like to connect, you can reach us here.
In this article we want to answer the major questions surrounding proper employee training so you can use this as a tool to improve the performance of your business.
Why you should train your employees
Most mistakes that MSBs make in their businesses are directly related to their lack of employee training.
Many mistakes can be avoided, and your business doesn’t have to suffer by being held back. But it takes a little bit of time and energy invested into best practices to create an environment that is geared towards training.
We see some MSBs focusing their time and attention in other places too often which leaves their employees unsure about how to handle certain situations. The result can come in the form of fines, slowed growth, losing your MSB license and even losing their banking relationship.
Another major reason to train employees is to fully utilize your resources and assets. For example, you are using a software for check cashing. Are you using just the surface level features or are you using it to its fullest potential? This software offers a lot of features that can make your employees’ jobs much easier and can create efficiencies that map to profitability. This asset alone could bring improvements that impact your business tremendously in the short and long term.
Employee training should be held as a high priority and taken seriously. If so, the result is a smooth operation, less drag on resources and time spent fixing mistakes and less worry about being in business in the coming months or years.
Taking employee training seriously is the first step to sustainable growth in your MSB business. It’s the foundation of everything you do and the bedrock of your business.
How to train your employees
One of the four pillars of BSA is required employee training.
Naturally, if training is not considered a high priority in your business, employees will find ways to fulfill this requirement without becoming more knowledgeable or getting better in their role. People are generally going to take the path of least resistance when it is offered to them unless you are creating an environment with a higher standard.
Taking a basic test online to fulfill training requirements isn’t always going to achieve the desired result. You’re not doing training just to say you completed it. The purpose of completing the training is to stay compliant, get better and avoid costly mistakes that can put you out of business.
Besides completing a standardized test to confirm your knowledge of the subject, employee training best practices include several other factors. We’ve listed some of them here.
Stay up to speed on current events that are happening in your industry, in your part of the region and in the world. This will give you context to trends you should be aware of and things to consider as suspicious activity.
Keeping yourself updated on topics like anti-money laundering, terrorist financing is a great place to spend some time once a week, reading articles and staying aware.
Looking up fines that other MSBs have had recently is a great way to stay on top of activities you should look out for in your business. Learning from others mistakes is a great mindset for protecting your business, not just staying compliant.
The WSJ has a section titled “compliance”. This is a great resource for keeping track of current day activities and what to look out for in your business.
The bottom line is that you should want to be the best at being compliant, because it’s a huge component to the business you’re in. To be the best, you have to seek out knowledge and resources to get better and instill that mentality in all of your employees.
As we seek to be the best in what we do, we want to be one of those resources and extend that knowledge to you so you can grow wisely.
If you have questions about employee training, please reach out to our team.
Resources for Training:
Anti-Money Laundering – https://www.acams.org/en
https://www.fincen.gov/resources/advisoriesbulletinsfact-sheets/advisories
https://www.fincen.gov/news-room/enforcement-actions
Suspicious activity reporting (SAR) enables law enforcement to initiate or supplement money laundering or terrorist financing investigations as well as other criminal cases. SARs also provide FinCEN and other federal agencies in identifying trends and patterns associated with financial crimes.
The Federal Financial Institution Examinations Council (FFIEC) website states that the most important factors for effective SAR monitoring and reporting include five key components:
• Identification or alert of unusual activity (which may include employee identification, law enforcement inquiries, other referrals, and transaction and surveillance monitoring system output).
• Managing alerts.
• SAR decision making.
• SAR completion and filing.
• Monitoring and SAR filing on continuing activity.
An effective SARs must be complete, sufficient, and filed timely. The most critical part of the SAR is the narrative. The narrative should identify the five essential elements of information (who? what? when? where? and why?) for the suspicious activity being reported. The method of operation (or how?) is also important and should be included in the narrative. Remember, you need to grab the reader’s attention with the first paragraph!
We are proud to say that we have an entire BSA Department dedicated to assist our MSB customers with questions regarding SAR filing.
Over the last decade we have worked hard to provide the absolute best and highest quality support for our MSB customers, and it has proven to support them with a high level of compliance in their businesses.
As we continue to build our banking services around our MSB customers, we look at the most important factors for sustainability and compliance and make those our goal for growth.
If you have any questions about SAR best practices or would like to speak with a BSA representative, contact us at mysuretybank.com
Cash flow is the lifeblood of any business. Whether you're managing a commercial construction firm or running a retail operation, understanding how money moves in and out of your business is key to long-term success. Poor cash flow management can leave businesses scrambling to cover expenses, even when profits look good on paper.
A recent episode of the Expandable Series discussed this in detail, but here are some fundamental cash flow principles, using commercial construction as an example, that apply to businesses across all industries.
1. Understand Your Cash Outflows
In commercial construction, significant cash outlays are required upfront for raw materials, permits, and labor. These costs must be covered well before payments from clients arrive. Similarly, in retail, manufacturers need to purchase inventory long before customers make a purchase.
A business must have enough cash on hand to cover these expenses. Without it, operations may stall, delaying projects and impacting profitability. Understanding your cash needs ahead of time ensures smoother financial management.
Example: Imagine a mid-sized construction firm, Apex Builders, takes on a new commercial office project. Before the first payment arrives, they must pay for steel beams, concrete, and skilled labor. Without proper cash reserves or a well-structured payment schedule, Apex Builders could struggle to cover these costs, potentially halting the project and damaging their reputation.
2. Time Your Cash Inflows Strategically
Revenue in commercial construction typically comes from milestone payments throughout a project or upon completion. However, these payments can be delayed due to contract terms, client approvals, or unexpected issues.
For any business, it’s essential to analyze how long it takes to convert expenses into revenue. Are you waiting 30, 60, or even 90 days to get paid? If so, your business must be structured to withstand these gaps. Ensuring that your contract terms align with your cash flow needs can prevent unnecessary financial strain.
Example: Apex Builders structures their contracts to ensure payments are received at key milestones—such as after the foundation is laid, after framing is completed, and upon final inspection. By planning these payment intervals, they reduce financial stress and ensure they always have working capital.
3. Build a Cash Buffer
One of the best strategies for managing cash flow is to build a buffer that accounts for timing discrepancies. In construction, this means having enough reserves to cover payroll and material costs while waiting for payments. The same principle applies to any business with delayed payments.
This buffer should be built into your pricing. Instead of operating on razor-thin margins, factor in potential delays and unexpected costs when setting your rates. This ensures financial stability even during slower payment periods.
Example: Apex Builders includes a 10% contingency in their project bids, ensuring that if a client delays payment or unexpected costs arise, they have the liquidity to keep operations running smoothly.
4. Plan for Payroll and Fixed Expenses
Payroll is a non-negotiable expense in any business. Employees expect timely paychecks, and failure to meet payroll obligations can lead to operational disruptions and even legal consequences.
Since payroll and other fixed expenses (like rent, utilities, and insurance) don’t change based on revenue fluctuations, they must be accounted for in advance. Forecasting these expenses over the next quarter will help ensure you always have the necessary funds available.
Example: Apex Builders schedules payments from previous projects to help cover payroll during slow months, ensuring that employees are always paid on time.
5. Look Ahead to the Next Quarter
Successful businesses don’t just think about today’s cash flow—they plan for the next quarter and beyond. What projects are in the pipeline? When will revenue from those projects be realized? What expenses need to be covered in the meantime?
By forecasting cash flow and preparing for potential shortfalls, businesses can make informed decisions about when to invest, when to hold back, and when to seek additional financing options to bridge any gaps.
Example: Apex Builders maintain a rolling cash flow projection, helping them anticipate slow periods and ensuring they never take on more projects than they can financially support at one time.
The Bottom Line
Cash flow management isn’t just about tracking numbers—it’s about planning ahead, building flexibility into your pricing, and ensuring your business can withstand the natural ebbs and flows of financial cycles. Whether you’re in commercial construction, retail, or any other industry, mastering cash flow is essential for long-term success. Surety Bank is here to help businesses navigate these challenges with financial solutions designed to keep operations running smoothly.
In the spring of 1994, Cindy walked into Surety Bank—not to apply for a job, but to apply for a mortgage. She and her family had recently moved from Michigan, and Surety was simply the place she trusted to help them settle into their new home. What she didn’t expect was that the bank would also offer her something even more life-changing—a career that would span more than three decades.
“I didn’t have to look very hard for a job,” Cindy recalls with a laugh. “They saw that I had banking experience and called me up because they needed a teller.”
It was the start of a journey that would see Cindy grow from a front-line teller to a key part of the bank’s payroll and HR team. Over the years, she became a steady presence in the bank’s evolving landscape, witnessing firsthand how technology transformed the industry. When she first started, many processes were still manual—checks were physically run through proof machines, reconciliations were done by hand, and not everyone even had a computer at their desk.
“I remember when we had to share computers,” she says. “That didn’t last too long, but things were a lot different back then.”
Cindy’s career path took her from teller to bookkeeping, then into accounting, and eventually into payroll and HR, where she found her niche. She describes her work as being part of a team that always pulled together to solve challenges—a culture of collaboration and adaptability that made Surety Bank feel like home.
“We always worked together to find solutions,” Cindy reflects. “Even though my role became more specialized over the years, it was always about teamwork.”
For Cindy, working at Surety Bank wasn’t just about the job—it was about the life it allowed her to build. Living just three miles from the bank, she was able to balance her career while staying closely involved in raising her children, supporting her husband, and nurturing her faith.
“I’ve been able to have my life at home and my life here at work,” she says. “It’s been a blessing to have a career that allowed me to be present for the things that mattered most—my family, my husband, and my faith.”
As much as she dedicated herself to her work, Cindy never lost sight of what was most important. She is deeply grateful that her time at Surety allowed her to grow professionally while still prioritizing the people she loved.
Looking back, Cindy remembers the many friendships, the changes that brought new ideas, and the way she adapted alongside the bank. Perhaps most of all, she values the relationships she built—with colleagues who became like family and customers who left a lasting impression.
Now, as she steps into retirement, Cindy is ready for a new chapter—one that revolves around her grandchildren, travel, and time with family in Michigan. It’s a bittersweet transition, but one that feels right.
“I never dreamed I’d be working someplace for 31 years,” she admits. “But as it turns out, it really went by fast.”
For those just starting their careers in banking, Cindy offers a simple but powerful piece of advice: “Be open to learning all aspects of the job. Take your time, think things through, and just go with the flow.”
After 31 years of steady dedication, Cindy leaves behind a legacy of resilience, kindness, and adaptability—a perfect reflection of the values that make Surety Bank so special. While she may be stepping away from her desk, the impact she’s made at Surety Bank will remain for years to come.
Thank you, Cindy, for 31 incredible years. Your Surety Bank family will miss you!
Durable Medical Equipment (DME) is defined as any medical equipment used in the home to aid in a better quality of living. The term includes wheelchairs, knee braces, hospital beds, nebulizers, walkers, etc. DME is a benefit included in most insurances including Medicare Part B which covers medically necessary DME that is prescribed by a physician for use in a patient’s home.
According to an AARP Bulletin titled “Medicare Under Assault From Fraudsters”, “roughly 10 cents of every dollar budgeted for the giant health insurance program is stolen or misdirected before it helps any enrollee. Malcom Sparrow, a Harvard University professor and leading expert on health care fraud, says the true amount lost to fraud, abuse or improper payments could be 20 percent, or even as high as 30 percent.” See below a graphic that puts the scale of Medicare fraud into perspective.
As you can see, DME fraud has become a huge business for criminals, and they are increasingly using MSBs to provide illegal kickbacks to physicians, launder their illegal proceeds, and take advantage of fraud victims. This behavior should disgust any American taxpayer, if not morally, think about how much of our hard-earned money over the years goes straight into these fraudsters’ pockets.
How it works:
See below an excerpt from a February 4, 2021, Department of Justice Press release titled “Florida Businesswoman Pleads Guilty to Criminal Health Care and Tax Fraud Charges and Agrees to $20.3 Million Civil False Claims Act Settlement”
[According to court documents, Wolfe and her conspirators used Regency to establish dozens of DME supply companies — or, rather, DME fronts — using trickery and deception. The scheme involved placing the DME fronts in the names of straw owners. By concealing the true ownership, Wolfe’s conspirators secretly gained control of multiple companies. With such control, they collectively submitted well over $400 million in illegal DME claims to Medicare and the Civilian Health and Medical Program of the VA. The conspirators claimed that the unusually high volume of claims reflected the use of telemedicine procedures, when, in fact, they had simply bribed doctors to approve them. Almost always, the doctors had no telehealth interaction with the beneficiaries.]
As you can see Wolfe established multiple shell companies and submitted over $400 million in illegal DME claims to Medicare and the Civilian Health and Medical Program of the VA. Another crucial element of the scheme is she bribed doctors to approve these fraudulent invoices stating they conducted telehealth services for the beneficiaries. The illegal kickbacks to doctors is what check cashing MSBs will encounter. A pattern we have picked up on is checks from companies with “Medical Equipment, DME, Braces, Devices, etc.” made payable to individuals that turn out to be physicians or money mules are likely illegal kickbacks to doctors for signing off on fraudulent DME claims.
Anti-Kickback Statute [42 U.S.C. § 1320a-7b(b)]
The AKS is a criminal law that prohibits the knowing and willful payment of “remuneration” to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs (e.g., drugs, supplies, or health care services for Medicare or Medicaid patients). Remuneration includes anything of value and can take many forms besides cash, such as free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies. In some industries, it is acceptable to reward those who refer business to you. However, in the Federal health care programs, paying for referrals is a crime. The statute covers the payers of kickbacks-those who offer or pay remuneration- as well as the recipients of kickbacks-those who solicit or receive remuneration. Each party’s intent is a key element of their liability under the AKS.
Criminal penalties and administrative sanctions for violating the AKS include fines, jail terms, and exclusion from participation in the Federal health care programs. Under the CMPL, physicians who pay or accept kickbacks also face penalties of up to $50,000 per kickback plus three times the amount of the remuneration.
Other Examples:
Red flags we have identified relating to DME fraud kickbacks are as follows:
• Maker names related to medical equipment writing checks out to individuals. The dollar amount can be random, but we see a lot in the $2,000 – $9,000 range. Less sophisticated actors will structure these payments to remain under the $10,000 CTR threshold.
• When you look up the registered agents of these DME companies on publicly available databases such as Sunbiz.org in Florida, they often control several other companies related to medical equipment that have been recently established. This is indicative of shell companies just like we saw in the above example from the DOJ press release.
• A payee that comes into the check cashing store and regularly cashes checks made payable from DME related companies. You may want to conduct and internet search of these individuals and determine if they are a physician.
What to do if you suspect DME fraudsters are taking advantage of your business to facilitate payments?
If you suspect a potential customer or customer is involved in DME fraud you should investigate to determine if any of the above red flags are involved. As always, you should ask yourself does this activity make sense given the nature of the alleged business? If you determine an existing customer is involved in DME fraud and has conducted transactions aggregating over the SAR dollar volume threshold, file a SAR. As always if you suspect a customer is involved in illegal activity you need to block them from doing business with you. No matter how profitable the relationship is, it’s not worth being fined, losing your license, or ending up in a Department of Justice press release.
Sources:
https://www.aarp.org/money/scams-fraud/info-2018/medicare-scams-fraud-identity-theft.html
https://oig.hhs.gov/compliance/physician-education/01laws.asp
Better Monitoring
Per federal and state guidelines, MSBs are required to monitor their customers’ transactions for suspicious and illegal activity.
Over the past year and a half, the Federal and State governments have issued a huge amount of money to individuals and businesses in the form of Covid-19 stimulus packages. Criminals have been exploiting this situation by committing financial crimes at an unprecedented rate. See a few examples below.
“IRVINE, Calif. (KABC) — An Irvine man allegedly obtained about $5 million in federal coronavirus-relief loans for his fake businesses and then spent the funds on himself, including buying Ferrari, Bentley and Lamborghini sports cars, according to federal authorities.”
“BOSTON — The owner of a Massachusetts pizza parlor lied about the number of employees he had to fraudulently obtain more than $660,000 in federal coronavirus relief funds, then used some of the money to buy and stock an alpaca farm in Vermont, federal prosecutors said Tuesday.”
“According to the report by the Times, Abidemi Rufai, of Lekki, Nigeria, was charged Saturday in federal court with using the identities of more than 100 Washington residents to steal more than $350,000 in unemployment benefits from the Washington state Employment Security Department (ESD) during the COVID-19 pandemic last year.”
How can you improve your quality of monitoring?
Here are some tips on how to get better:
Better Reporting
Reporting should be a natural extension of your monitoring practices. If you are making your monitoring a high priority, good reporting will naturally flow from those activities.
It is very important to file CTRs on a timely basis, within 15 days.
If you are using your check cashing software fully, it will help with the practice of reporting. Especially with CTRs, when a suspicious activity is identified, your software will trigger a CTR. In addition, it will aggregate the data on a customer, pulling all their transactions together if they have made multiple transactions at different times of the day.
Investing in additional features like these and learning how to use them minimizes mistakes.
For example, if a customer comes in three separate times during a day and cashes a $5,000 check each time, will your employees know to aggregate all of those transactions? If not, this is where the software can minimize mistakes.
We understand that your team is most likely not trying to intentionally ignore possible suspicious activity. However, if they get busy and are rushed, without these extra measures in place to catch mistakes they are more likely to make a human error that could cost you.
Our Commitment to You
One of our highest priorities and commitments to you is to make sure our BSA staff is highly qualified and properly trained.
As we seek to be a resource for you, we hold ourselves to the highest standard as well. We are in the business of compliance, so we take employee training, monitoring, and reporting very seriously.
If you have questions for our team and would like to connect, you can reach us here.
In this article we want to answer the major questions surrounding proper employee training so you can use this as a tool to improve the performance of your business.
Why you should train your employees
Most mistakes that MSBs make in their businesses are directly related to their lack of employee training.
Many mistakes can be avoided, and your business doesn’t have to suffer by being held back. But it takes a little bit of time and energy invested into best practices to create an environment that is geared towards training.
We see some MSBs focusing their time and attention in other places too often which leaves their employees unsure about how to handle certain situations. The result can come in the form of fines, slowed growth, losing your MSB license and even losing their banking relationship.
Another major reason to train employees is to fully utilize your resources and assets. For example, you are using a software for check cashing. Are you using just the surface level features or are you using it to its fullest potential? This software offers a lot of features that can make your employees’ jobs much easier and can create efficiencies that map to profitability. This asset alone could bring improvements that impact your business tremendously in the short and long term.
Employee training should be held as a high priority and taken seriously. If so, the result is a smooth operation, less drag on resources and time spent fixing mistakes and less worry about being in business in the coming months or years.
Taking employee training seriously is the first step to sustainable growth in your MSB business. It’s the foundation of everything you do and the bedrock of your business.
How to train your employees
One of the four pillars of BSA is required employee training.
Naturally, if training is not considered a high priority in your business, employees will find ways to fulfill this requirement without becoming more knowledgeable or getting better in their role. People are generally going to take the path of least resistance when it is offered to them unless you are creating an environment with a higher standard.
Taking a basic test online to fulfill training requirements isn’t always going to achieve the desired result. You’re not doing training just to say you completed it. The purpose of completing the training is to stay compliant, get better and avoid costly mistakes that can put you out of business.
Besides completing a standardized test to confirm your knowledge of the subject, employee training best practices include several other factors. We’ve listed some of them here.
Stay up to speed on current events that are happening in your industry, in your part of the region and in the world. This will give you context to trends you should be aware of and things to consider as suspicious activity.
Keeping yourself updated on topics like anti-money laundering, terrorist financing is a great place to spend some time once a week, reading articles and staying aware.
Looking up fines that other MSBs have had recently is a great way to stay on top of activities you should look out for in your business. Learning from others mistakes is a great mindset for protecting your business, not just staying compliant.
The WSJ has a section titled “compliance”. This is a great resource for keeping track of current day activities and what to look out for in your business.
The bottom line is that you should want to be the best at being compliant, because it’s a huge component to the business you’re in. To be the best, you have to seek out knowledge and resources to get better and instill that mentality in all of your employees.
As we seek to be the best in what we do, we want to be one of those resources and extend that knowledge to you so you can grow wisely.
If you have questions about employee training, please reach out to our team.
Resources for Training:
Anti-Money Laundering – https://www.acams.org/en
https://www.fincen.gov/resources/advisoriesbulletinsfact-sheets/advisories
https://www.fincen.gov/news-room/enforcement-actions
Suspicious activity reporting (SAR) enables law enforcement to initiate or supplement money laundering or terrorist financing investigations as well as other criminal cases. SARs also provide FinCEN and other federal agencies in identifying trends and patterns associated with financial crimes.
The Federal Financial Institution Examinations Council (FFIEC) website states that the most important factors for effective SAR monitoring and reporting include five key components:
• Identification or alert of unusual activity (which may include employee identification, law enforcement inquiries, other referrals, and transaction and surveillance monitoring system output).
• Managing alerts.
• SAR decision making.
• SAR completion and filing.
• Monitoring and SAR filing on continuing activity.
An effective SARs must be complete, sufficient, and filed timely. The most critical part of the SAR is the narrative. The narrative should identify the five essential elements of information (who? what? when? where? and why?) for the suspicious activity being reported. The method of operation (or how?) is also important and should be included in the narrative. Remember, you need to grab the reader’s attention with the first paragraph!
We are proud to say that we have an entire BSA Department dedicated to assist our MSB customers with questions regarding SAR filing.
Over the last decade we have worked hard to provide the absolute best and highest quality support for our MSB customers, and it has proven to support them with a high level of compliance in their businesses.
As we continue to build our banking services around our MSB customers, we look at the most important factors for sustainability and compliance and make those our goal for growth.
If you have any questions about SAR best practices or would like to speak with a BSA representative, contact us at mysuretybank.com
Cash flow is the lifeblood of any business. Whether you're managing a commercial construction firm or running a retail operation, understanding how money moves in and out of your business is key to long-term success. Poor cash flow management can leave businesses scrambling to cover expenses, even when profits look good on paper.
A recent episode of the Expandable Series discussed this in detail, but here are some fundamental cash flow principles, using commercial construction as an example, that apply to businesses across all industries.
1. Understand Your Cash Outflows
In commercial construction, significant cash outlays are required upfront for raw materials, permits, and labor. These costs must be covered well before payments from clients arrive. Similarly, in retail, manufacturers need to purchase inventory long before customers make a purchase.
A business must have enough cash on hand to cover these expenses. Without it, operations may stall, delaying projects and impacting profitability. Understanding your cash needs ahead of time ensures smoother financial management.
Example: Imagine a mid-sized construction firm, Apex Builders, takes on a new commercial office project. Before the first payment arrives, they must pay for steel beams, concrete, and skilled labor. Without proper cash reserves or a well-structured payment schedule, Apex Builders could struggle to cover these costs, potentially halting the project and damaging their reputation.
2. Time Your Cash Inflows Strategically
Revenue in commercial construction typically comes from milestone payments throughout a project or upon completion. However, these payments can be delayed due to contract terms, client approvals, or unexpected issues.
For any business, it’s essential to analyze how long it takes to convert expenses into revenue. Are you waiting 30, 60, or even 90 days to get paid? If so, your business must be structured to withstand these gaps. Ensuring that your contract terms align with your cash flow needs can prevent unnecessary financial strain.
Example: Apex Builders structures their contracts to ensure payments are received at key milestones—such as after the foundation is laid, after framing is completed, and upon final inspection. By planning these payment intervals, they reduce financial stress and ensure they always have working capital.
3. Build a Cash Buffer
One of the best strategies for managing cash flow is to build a buffer that accounts for timing discrepancies. In construction, this means having enough reserves to cover payroll and material costs while waiting for payments. The same principle applies to any business with delayed payments.
This buffer should be built into your pricing. Instead of operating on razor-thin margins, factor in potential delays and unexpected costs when setting your rates. This ensures financial stability even during slower payment periods.
Example: Apex Builders includes a 10% contingency in their project bids, ensuring that if a client delays payment or unexpected costs arise, they have the liquidity to keep operations running smoothly.
4. Plan for Payroll and Fixed Expenses
Payroll is a non-negotiable expense in any business. Employees expect timely paychecks, and failure to meet payroll obligations can lead to operational disruptions and even legal consequences.
Since payroll and other fixed expenses (like rent, utilities, and insurance) don’t change based on revenue fluctuations, they must be accounted for in advance. Forecasting these expenses over the next quarter will help ensure you always have the necessary funds available.
Example: Apex Builders schedules payments from previous projects to help cover payroll during slow months, ensuring that employees are always paid on time.
5. Look Ahead to the Next Quarter
Successful businesses don’t just think about today’s cash flow—they plan for the next quarter and beyond. What projects are in the pipeline? When will revenue from those projects be realized? What expenses need to be covered in the meantime?
By forecasting cash flow and preparing for potential shortfalls, businesses can make informed decisions about when to invest, when to hold back, and when to seek additional financing options to bridge any gaps.
Example: Apex Builders maintain a rolling cash flow projection, helping them anticipate slow periods and ensuring they never take on more projects than they can financially support at one time.
The Bottom Line
Cash flow management isn’t just about tracking numbers—it’s about planning ahead, building flexibility into your pricing, and ensuring your business can withstand the natural ebbs and flows of financial cycles. Whether you’re in commercial construction, retail, or any other industry, mastering cash flow is essential for long-term success. Surety Bank is here to help businesses navigate these challenges with financial solutions designed to keep operations running smoothly.
In the spring of 1994, Cindy walked into Surety Bank—not to apply for a job, but to apply for a mortgage. She and her family had recently moved from Michigan, and Surety was simply the place she trusted to help them settle into their new home. What she didn’t expect was that the bank would also offer her something even more life-changing—a career that would span more than three decades.
“I didn’t have to look very hard for a job,” Cindy recalls with a laugh. “They saw that I had banking experience and called me up because they needed a teller.”
It was the start of a journey that would see Cindy grow from a front-line teller to a key part of the bank’s payroll and HR team. Over the years, she became a steady presence in the bank’s evolving landscape, witnessing firsthand how technology transformed the industry. When she first started, many processes were still manual—checks were physically run through proof machines, reconciliations were done by hand, and not everyone even had a computer at their desk.
“I remember when we had to share computers,” she says. “That didn’t last too long, but things were a lot different back then.”
Cindy’s career path took her from teller to bookkeeping, then into accounting, and eventually into payroll and HR, where she found her niche. She describes her work as being part of a team that always pulled together to solve challenges—a culture of collaboration and adaptability that made Surety Bank feel like home.
“We always worked together to find solutions,” Cindy reflects. “Even though my role became more specialized over the years, it was always about teamwork.”
For Cindy, working at Surety Bank wasn’t just about the job—it was about the life it allowed her to build. Living just three miles from the bank, she was able to balance her career while staying closely involved in raising her children, supporting her husband, and nurturing her faith.
“I’ve been able to have my life at home and my life here at work,” she says. “It’s been a blessing to have a career that allowed me to be present for the things that mattered most—my family, my husband, and my faith.”
As much as she dedicated herself to her work, Cindy never lost sight of what was most important. She is deeply grateful that her time at Surety allowed her to grow professionally while still prioritizing the people she loved.
Looking back, Cindy remembers the many friendships, the changes that brought new ideas, and the way she adapted alongside the bank. Perhaps most of all, she values the relationships she built—with colleagues who became like family and customers who left a lasting impression.
Now, as she steps into retirement, Cindy is ready for a new chapter—one that revolves around her grandchildren, travel, and time with family in Michigan. It’s a bittersweet transition, but one that feels right.
“I never dreamed I’d be working someplace for 31 years,” she admits. “But as it turns out, it really went by fast.”
For those just starting their careers in banking, Cindy offers a simple but powerful piece of advice: “Be open to learning all aspects of the job. Take your time, think things through, and just go with the flow.”
After 31 years of steady dedication, Cindy leaves behind a legacy of resilience, kindness, and adaptability—a perfect reflection of the values that make Surety Bank so special. While she may be stepping away from her desk, the impact she’s made at Surety Bank will remain for years to come.
Thank you, Cindy, for 31 incredible years. Your Surety Bank family will miss you!
Durable Medical Equipment (DME) is defined as any medical equipment used in the home to aid in a better quality of living. The term includes wheelchairs, knee braces, hospital beds, nebulizers, walkers, etc. DME is a benefit included in most insurances including Medicare Part B which covers medically necessary DME that is prescribed by a physician for use in a patient’s home.
According to an AARP Bulletin titled “Medicare Under Assault From Fraudsters”, “roughly 10 cents of every dollar budgeted for the giant health insurance program is stolen or misdirected before it helps any enrollee. Malcom Sparrow, a Harvard University professor and leading expert on health care fraud, says the true amount lost to fraud, abuse or improper payments could be 20 percent, or even as high as 30 percent.” See below a graphic that puts the scale of Medicare fraud into perspective.
As you can see, DME fraud has become a huge business for criminals, and they are increasingly using MSBs to provide illegal kickbacks to physicians, launder their illegal proceeds, and take advantage of fraud victims. This behavior should disgust any American taxpayer, if not morally, think about how much of our hard-earned money over the years goes straight into these fraudsters’ pockets.
How it works:
See below an excerpt from a February 4, 2021, Department of Justice Press release titled “Florida Businesswoman Pleads Guilty to Criminal Health Care and Tax Fraud Charges and Agrees to $20.3 Million Civil False Claims Act Settlement”
[According to court documents, Wolfe and her conspirators used Regency to establish dozens of DME supply companies — or, rather, DME fronts — using trickery and deception. The scheme involved placing the DME fronts in the names of straw owners. By concealing the true ownership, Wolfe’s conspirators secretly gained control of multiple companies. With such control, they collectively submitted well over $400 million in illegal DME claims to Medicare and the Civilian Health and Medical Program of the VA. The conspirators claimed that the unusually high volume of claims reflected the use of telemedicine procedures, when, in fact, they had simply bribed doctors to approve them. Almost always, the doctors had no telehealth interaction with the beneficiaries.]
As you can see Wolfe established multiple shell companies and submitted over $400 million in illegal DME claims to Medicare and the Civilian Health and Medical Program of the VA. Another crucial element of the scheme is she bribed doctors to approve these fraudulent invoices stating they conducted telehealth services for the beneficiaries. The illegal kickbacks to doctors is what check cashing MSBs will encounter. A pattern we have picked up on is checks from companies with “Medical Equipment, DME, Braces, Devices, etc.” made payable to individuals that turn out to be physicians or money mules are likely illegal kickbacks to doctors for signing off on fraudulent DME claims.
Anti-Kickback Statute [42 U.S.C. § 1320a-7b(b)]
The AKS is a criminal law that prohibits the knowing and willful payment of “remuneration” to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs (e.g., drugs, supplies, or health care services for Medicare or Medicaid patients). Remuneration includes anything of value and can take many forms besides cash, such as free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies. In some industries, it is acceptable to reward those who refer business to you. However, in the Federal health care programs, paying for referrals is a crime. The statute covers the payers of kickbacks-those who offer or pay remuneration- as well as the recipients of kickbacks-those who solicit or receive remuneration. Each party’s intent is a key element of their liability under the AKS.
Criminal penalties and administrative sanctions for violating the AKS include fines, jail terms, and exclusion from participation in the Federal health care programs. Under the CMPL, physicians who pay or accept kickbacks also face penalties of up to $50,000 per kickback plus three times the amount of the remuneration.
Other Examples:
Red flags we have identified relating to DME fraud kickbacks are as follows:
• Maker names related to medical equipment writing checks out to individuals. The dollar amount can be random, but we see a lot in the $2,000 – $9,000 range. Less sophisticated actors will structure these payments to remain under the $10,000 CTR threshold.
• When you look up the registered agents of these DME companies on publicly available databases such as Sunbiz.org in Florida, they often control several other companies related to medical equipment that have been recently established. This is indicative of shell companies just like we saw in the above example from the DOJ press release.
• A payee that comes into the check cashing store and regularly cashes checks made payable from DME related companies. You may want to conduct and internet search of these individuals and determine if they are a physician.
What to do if you suspect DME fraudsters are taking advantage of your business to facilitate payments?
If you suspect a potential customer or customer is involved in DME fraud you should investigate to determine if any of the above red flags are involved. As always, you should ask yourself does this activity make sense given the nature of the alleged business? If you determine an existing customer is involved in DME fraud and has conducted transactions aggregating over the SAR dollar volume threshold, file a SAR. As always if you suspect a customer is involved in illegal activity you need to block them from doing business with you. No matter how profitable the relationship is, it’s not worth being fined, losing your license, or ending up in a Department of Justice press release.
Sources:
https://www.aarp.org/money/scams-fraud/info-2018/medicare-scams-fraud-identity-theft.html
https://oig.hhs.gov/compliance/physician-education/01laws.asp
Better Monitoring
Per federal and state guidelines, MSBs are required to monitor their customers’ transactions for suspicious and illegal activity.
Over the past year and a half, the Federal and State governments have issued a huge amount of money to individuals and businesses in the form of Covid-19 stimulus packages. Criminals have been exploiting this situation by committing financial crimes at an unprecedented rate. See a few examples below.
“IRVINE, Calif. (KABC) — An Irvine man allegedly obtained about $5 million in federal coronavirus-relief loans for his fake businesses and then spent the funds on himself, including buying Ferrari, Bentley and Lamborghini sports cars, according to federal authorities.”
“BOSTON — The owner of a Massachusetts pizza parlor lied about the number of employees he had to fraudulently obtain more than $660,000 in federal coronavirus relief funds, then used some of the money to buy and stock an alpaca farm in Vermont, federal prosecutors said Tuesday.”
“According to the report by the Times, Abidemi Rufai, of Lekki, Nigeria, was charged Saturday in federal court with using the identities of more than 100 Washington residents to steal more than $350,000 in unemployment benefits from the Washington state Employment Security Department (ESD) during the COVID-19 pandemic last year.”
How can you improve your quality of monitoring?
Here are some tips on how to get better:
Better Reporting
Reporting should be a natural extension of your monitoring practices. If you are making your monitoring a high priority, good reporting will naturally flow from those activities.
It is very important to file CTRs on a timely basis, within 15 days.
If you are using your check cashing software fully, it will help with the practice of reporting. Especially with CTRs, when a suspicious activity is identified, your software will trigger a CTR. In addition, it will aggregate the data on a customer, pulling all their transactions together if they have made multiple transactions at different times of the day.
Investing in additional features like these and learning how to use them minimizes mistakes.
For example, if a customer comes in three separate times during a day and cashes a $5,000 check each time, will your employees know to aggregate all of those transactions? If not, this is where the software can minimize mistakes.
We understand that your team is most likely not trying to intentionally ignore possible suspicious activity. However, if they get busy and are rushed, without these extra measures in place to catch mistakes they are more likely to make a human error that could cost you.
Our Commitment to You
One of our highest priorities and commitments to you is to make sure our BSA staff is highly qualified and properly trained.
As we seek to be a resource for you, we hold ourselves to the highest standard as well. We are in the business of compliance, so we take employee training, monitoring, and reporting very seriously.
If you have questions for our team and would like to connect, you can reach us here.
In this article we want to answer the major questions surrounding proper employee training so you can use this as a tool to improve the performance of your business.
Why you should train your employees
Most mistakes that MSBs make in their businesses are directly related to their lack of employee training.
Many mistakes can be avoided, and your business doesn’t have to suffer by being held back. But it takes a little bit of time and energy invested into best practices to create an environment that is geared towards training.
We see some MSBs focusing their time and attention in other places too often which leaves their employees unsure about how to handle certain situations. The result can come in the form of fines, slowed growth, losing your MSB license and even losing their banking relationship.
Another major reason to train employees is to fully utilize your resources and assets. For example, you are using a software for check cashing. Are you using just the surface level features or are you using it to its fullest potential? This software offers a lot of features that can make your employees’ jobs much easier and can create efficiencies that map to profitability. This asset alone could bring improvements that impact your business tremendously in the short and long term.
Employee training should be held as a high priority and taken seriously. If so, the result is a smooth operation, less drag on resources and time spent fixing mistakes and less worry about being in business in the coming months or years.
Taking employee training seriously is the first step to sustainable growth in your MSB business. It’s the foundation of everything you do and the bedrock of your business.
How to train your employees
One of the four pillars of BSA is required employee training.
Naturally, if training is not considered a high priority in your business, employees will find ways to fulfill this requirement without becoming more knowledgeable or getting better in their role. People are generally going to take the path of least resistance when it is offered to them unless you are creating an environment with a higher standard.
Taking a basic test online to fulfill training requirements isn’t always going to achieve the desired result. You’re not doing training just to say you completed it. The purpose of completing the training is to stay compliant, get better and avoid costly mistakes that can put you out of business.
Besides completing a standardized test to confirm your knowledge of the subject, employee training best practices include several other factors. We’ve listed some of them here.
Stay up to speed on current events that are happening in your industry, in your part of the region and in the world. This will give you context to trends you should be aware of and things to consider as suspicious activity.
Keeping yourself updated on topics like anti-money laundering, terrorist financing is a great place to spend some time once a week, reading articles and staying aware.
Looking up fines that other MSBs have had recently is a great way to stay on top of activities you should look out for in your business. Learning from others mistakes is a great mindset for protecting your business, not just staying compliant.
The WSJ has a section titled “compliance”. This is a great resource for keeping track of current day activities and what to look out for in your business.
The bottom line is that you should want to be the best at being compliant, because it’s a huge component to the business you’re in. To be the best, you have to seek out knowledge and resources to get better and instill that mentality in all of your employees.
As we seek to be the best in what we do, we want to be one of those resources and extend that knowledge to you so you can grow wisely.
If you have questions about employee training, please reach out to our team.
Resources for Training:
Anti-Money Laundering – https://www.acams.org/en
https://www.fincen.gov/resources/advisoriesbulletinsfact-sheets/advisories
https://www.fincen.gov/news-room/enforcement-actions
Suspicious activity reporting (SAR) enables law enforcement to initiate or supplement money laundering or terrorist financing investigations as well as other criminal cases. SARs also provide FinCEN and other federal agencies in identifying trends and patterns associated with financial crimes.
The Federal Financial Institution Examinations Council (FFIEC) website states that the most important factors for effective SAR monitoring and reporting include five key components:
• Identification or alert of unusual activity (which may include employee identification, law enforcement inquiries, other referrals, and transaction and surveillance monitoring system output).
• Managing alerts.
• SAR decision making.
• SAR completion and filing.
• Monitoring and SAR filing on continuing activity.
An effective SARs must be complete, sufficient, and filed timely. The most critical part of the SAR is the narrative. The narrative should identify the five essential elements of information (who? what? when? where? and why?) for the suspicious activity being reported. The method of operation (or how?) is also important and should be included in the narrative. Remember, you need to grab the reader’s attention with the first paragraph!
We are proud to say that we have an entire BSA Department dedicated to assist our MSB customers with questions regarding SAR filing.
Over the last decade we have worked hard to provide the absolute best and highest quality support for our MSB customers, and it has proven to support them with a high level of compliance in their businesses.
As we continue to build our banking services around our MSB customers, we look at the most important factors for sustainability and compliance and make those our goal for growth.
If you have any questions about SAR best practices or would like to speak with a BSA representative, contact us at mysuretybank.com
Cash flow is the lifeblood of any business. Whether you're managing a commercial construction firm or running a retail operation, understanding how money moves in and out of your business is key to long-term success. Poor cash flow management can leave businesses scrambling to cover expenses, even when profits look good on paper.
A recent episode of the Expandable Series discussed this in detail, but here are some fundamental cash flow principles, using commercial construction as an example, that apply to businesses across all industries.
1. Understand Your Cash Outflows
In commercial construction, significant cash outlays are required upfront for raw materials, permits, and labor. These costs must be covered well before payments from clients arrive. Similarly, in retail, manufacturers need to purchase inventory long before customers make a purchase.
A business must have enough cash on hand to cover these expenses. Without it, operations may stall, delaying projects and impacting profitability. Understanding your cash needs ahead of time ensures smoother financial management.
Example: Imagine a mid-sized construction firm, Apex Builders, takes on a new commercial office project. Before the first payment arrives, they must pay for steel beams, concrete, and skilled labor. Without proper cash reserves or a well-structured payment schedule, Apex Builders could struggle to cover these costs, potentially halting the project and damaging their reputation.
2. Time Your Cash Inflows Strategically
Revenue in commercial construction typically comes from milestone payments throughout a project or upon completion. However, these payments can be delayed due to contract terms, client approvals, or unexpected issues.
For any business, it’s essential to analyze how long it takes to convert expenses into revenue. Are you waiting 30, 60, or even 90 days to get paid? If so, your business must be structured to withstand these gaps. Ensuring that your contract terms align with your cash flow needs can prevent unnecessary financial strain.
Example: Apex Builders structures their contracts to ensure payments are received at key milestones—such as after the foundation is laid, after framing is completed, and upon final inspection. By planning these payment intervals, they reduce financial stress and ensure they always have working capital.
3. Build a Cash Buffer
One of the best strategies for managing cash flow is to build a buffer that accounts for timing discrepancies. In construction, this means having enough reserves to cover payroll and material costs while waiting for payments. The same principle applies to any business with delayed payments.
This buffer should be built into your pricing. Instead of operating on razor-thin margins, factor in potential delays and unexpected costs when setting your rates. This ensures financial stability even during slower payment periods.
Example: Apex Builders includes a 10% contingency in their project bids, ensuring that if a client delays payment or unexpected costs arise, they have the liquidity to keep operations running smoothly.
4. Plan for Payroll and Fixed Expenses
Payroll is a non-negotiable expense in any business. Employees expect timely paychecks, and failure to meet payroll obligations can lead to operational disruptions and even legal consequences.
Since payroll and other fixed expenses (like rent, utilities, and insurance) don’t change based on revenue fluctuations, they must be accounted for in advance. Forecasting these expenses over the next quarter will help ensure you always have the necessary funds available.
Example: Apex Builders schedules payments from previous projects to help cover payroll during slow months, ensuring that employees are always paid on time.
5. Look Ahead to the Next Quarter
Successful businesses don’t just think about today’s cash flow—they plan for the next quarter and beyond. What projects are in the pipeline? When will revenue from those projects be realized? What expenses need to be covered in the meantime?
By forecasting cash flow and preparing for potential shortfalls, businesses can make informed decisions about when to invest, when to hold back, and when to seek additional financing options to bridge any gaps.
Example: Apex Builders maintain a rolling cash flow projection, helping them anticipate slow periods and ensuring they never take on more projects than they can financially support at one time.
The Bottom Line
Cash flow management isn’t just about tracking numbers—it’s about planning ahead, building flexibility into your pricing, and ensuring your business can withstand the natural ebbs and flows of financial cycles. Whether you’re in commercial construction, retail, or any other industry, mastering cash flow is essential for long-term success. Surety Bank is here to help businesses navigate these challenges with financial solutions designed to keep operations running smoothly.
In the spring of 1994, Cindy walked into Surety Bank—not to apply for a job, but to apply for a mortgage. She and her family had recently moved from Michigan, and Surety was simply the place she trusted to help them settle into their new home. What she didn’t expect was that the bank would also offer her something even more life-changing—a career that would span more than three decades.
“I didn’t have to look very hard for a job,” Cindy recalls with a laugh. “They saw that I had banking experience and called me up because they needed a teller.”
It was the start of a journey that would see Cindy grow from a front-line teller to a key part of the bank’s payroll and HR team. Over the years, she became a steady presence in the bank’s evolving landscape, witnessing firsthand how technology transformed the industry. When she first started, many processes were still manual—checks were physically run through proof machines, reconciliations were done by hand, and not everyone even had a computer at their desk.
“I remember when we had to share computers,” she says. “That didn’t last too long, but things were a lot different back then.”
Cindy’s career path took her from teller to bookkeeping, then into accounting, and eventually into payroll and HR, where she found her niche. She describes her work as being part of a team that always pulled together to solve challenges—a culture of collaboration and adaptability that made Surety Bank feel like home.
“We always worked together to find solutions,” Cindy reflects. “Even though my role became more specialized over the years, it was always about teamwork.”
For Cindy, working at Surety Bank wasn’t just about the job—it was about the life it allowed her to build. Living just three miles from the bank, she was able to balance her career while staying closely involved in raising her children, supporting her husband, and nurturing her faith.
“I’ve been able to have my life at home and my life here at work,” she says. “It’s been a blessing to have a career that allowed me to be present for the things that mattered most—my family, my husband, and my faith.”
As much as she dedicated herself to her work, Cindy never lost sight of what was most important. She is deeply grateful that her time at Surety allowed her to grow professionally while still prioritizing the people she loved.
Looking back, Cindy remembers the many friendships, the changes that brought new ideas, and the way she adapted alongside the bank. Perhaps most of all, she values the relationships she built—with colleagues who became like family and customers who left a lasting impression.
Now, as she steps into retirement, Cindy is ready for a new chapter—one that revolves around her grandchildren, travel, and time with family in Michigan. It’s a bittersweet transition, but one that feels right.
“I never dreamed I’d be working someplace for 31 years,” she admits. “But as it turns out, it really went by fast.”
For those just starting their careers in banking, Cindy offers a simple but powerful piece of advice: “Be open to learning all aspects of the job. Take your time, think things through, and just go with the flow.”
After 31 years of steady dedication, Cindy leaves behind a legacy of resilience, kindness, and adaptability—a perfect reflection of the values that make Surety Bank so special. While she may be stepping away from her desk, the impact she’s made at Surety Bank will remain for years to come.
Thank you, Cindy, for 31 incredible years. Your Surety Bank family will miss you!
Durable Medical Equipment (DME) is defined as any medical equipment used in the home to aid in a better quality of living. The term includes wheelchairs, knee braces, hospital beds, nebulizers, walkers, etc. DME is a benefit included in most insurances including Medicare Part B which covers medically necessary DME that is prescribed by a physician for use in a patient’s home.
According to an AARP Bulletin titled “Medicare Under Assault From Fraudsters”, “roughly 10 cents of every dollar budgeted for the giant health insurance program is stolen or misdirected before it helps any enrollee. Malcom Sparrow, a Harvard University professor and leading expert on health care fraud, says the true amount lost to fraud, abuse or improper payments could be 20 percent, or even as high as 30 percent.” See below a graphic that puts the scale of Medicare fraud into perspective.
As you can see, DME fraud has become a huge business for criminals, and they are increasingly using MSBs to provide illegal kickbacks to physicians, launder their illegal proceeds, and take advantage of fraud victims. This behavior should disgust any American taxpayer, if not morally, think about how much of our hard-earned money over the years goes straight into these fraudsters’ pockets.
How it works:
See below an excerpt from a February 4, 2021, Department of Justice Press release titled “Florida Businesswoman Pleads Guilty to Criminal Health Care and Tax Fraud Charges and Agrees to $20.3 Million Civil False Claims Act Settlement”
[According to court documents, Wolfe and her conspirators used Regency to establish dozens of DME supply companies — or, rather, DME fronts — using trickery and deception. The scheme involved placing the DME fronts in the names of straw owners. By concealing the true ownership, Wolfe’s conspirators secretly gained control of multiple companies. With such control, they collectively submitted well over $400 million in illegal DME claims to Medicare and the Civilian Health and Medical Program of the VA. The conspirators claimed that the unusually high volume of claims reflected the use of telemedicine procedures, when, in fact, they had simply bribed doctors to approve them. Almost always, the doctors had no telehealth interaction with the beneficiaries.]
As you can see Wolfe established multiple shell companies and submitted over $400 million in illegal DME claims to Medicare and the Civilian Health and Medical Program of the VA. Another crucial element of the scheme is she bribed doctors to approve these fraudulent invoices stating they conducted telehealth services for the beneficiaries. The illegal kickbacks to doctors is what check cashing MSBs will encounter. A pattern we have picked up on is checks from companies with “Medical Equipment, DME, Braces, Devices, etc.” made payable to individuals that turn out to be physicians or money mules are likely illegal kickbacks to doctors for signing off on fraudulent DME claims.
Anti-Kickback Statute [42 U.S.C. § 1320a-7b(b)]
The AKS is a criminal law that prohibits the knowing and willful payment of “remuneration” to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs (e.g., drugs, supplies, or health care services for Medicare or Medicaid patients). Remuneration includes anything of value and can take many forms besides cash, such as free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies. In some industries, it is acceptable to reward those who refer business to you. However, in the Federal health care programs, paying for referrals is a crime. The statute covers the payers of kickbacks-those who offer or pay remuneration- as well as the recipients of kickbacks-those who solicit or receive remuneration. Each party’s intent is a key element of their liability under the AKS.
Criminal penalties and administrative sanctions for violating the AKS include fines, jail terms, and exclusion from participation in the Federal health care programs. Under the CMPL, physicians who pay or accept kickbacks also face penalties of up to $50,000 per kickback plus three times the amount of the remuneration.
Other Examples:
Red flags we have identified relating to DME fraud kickbacks are as follows:
• Maker names related to medical equipment writing checks out to individuals. The dollar amount can be random, but we see a lot in the $2,000 – $9,000 range. Less sophisticated actors will structure these payments to remain under the $10,000 CTR threshold.
• When you look up the registered agents of these DME companies on publicly available databases such as Sunbiz.org in Florida, they often control several other companies related to medical equipment that have been recently established. This is indicative of shell companies just like we saw in the above example from the DOJ press release.
• A payee that comes into the check cashing store and regularly cashes checks made payable from DME related companies. You may want to conduct and internet search of these individuals and determine if they are a physician.
What to do if you suspect DME fraudsters are taking advantage of your business to facilitate payments?
If you suspect a potential customer or customer is involved in DME fraud you should investigate to determine if any of the above red flags are involved. As always, you should ask yourself does this activity make sense given the nature of the alleged business? If you determine an existing customer is involved in DME fraud and has conducted transactions aggregating over the SAR dollar volume threshold, file a SAR. As always if you suspect a customer is involved in illegal activity you need to block them from doing business with you. No matter how profitable the relationship is, it’s not worth being fined, losing your license, or ending up in a Department of Justice press release.
Sources:
https://www.aarp.org/money/scams-fraud/info-2018/medicare-scams-fraud-identity-theft.html
https://oig.hhs.gov/compliance/physician-education/01laws.asp
Better Monitoring
Per federal and state guidelines, MSBs are required to monitor their customers’ transactions for suspicious and illegal activity.
Over the past year and a half, the Federal and State governments have issued a huge amount of money to individuals and businesses in the form of Covid-19 stimulus packages. Criminals have been exploiting this situation by committing financial crimes at an unprecedented rate. See a few examples below.
“IRVINE, Calif. (KABC) — An Irvine man allegedly obtained about $5 million in federal coronavirus-relief loans for his fake businesses and then spent the funds on himself, including buying Ferrari, Bentley and Lamborghini sports cars, according to federal authorities.”
“BOSTON — The owner of a Massachusetts pizza parlor lied about the number of employees he had to fraudulently obtain more than $660,000 in federal coronavirus relief funds, then used some of the money to buy and stock an alpaca farm in Vermont, federal prosecutors said Tuesday.”
“According to the report by the Times, Abidemi Rufai, of Lekki, Nigeria, was charged Saturday in federal court with using the identities of more than 100 Washington residents to steal more than $350,000 in unemployment benefits from the Washington state Employment Security Department (ESD) during the COVID-19 pandemic last year.”
How can you improve your quality of monitoring?
Here are some tips on how to get better:
Better Reporting
Reporting should be a natural extension of your monitoring practices. If you are making your monitoring a high priority, good reporting will naturally flow from those activities.
It is very important to file CTRs on a timely basis, within 15 days.
If you are using your check cashing software fully, it will help with the practice of reporting. Especially with CTRs, when a suspicious activity is identified, your software will trigger a CTR. In addition, it will aggregate the data on a customer, pulling all their transactions together if they have made multiple transactions at different times of the day.
Investing in additional features like these and learning how to use them minimizes mistakes.
For example, if a customer comes in three separate times during a day and cashes a $5,000 check each time, will your employees know to aggregate all of those transactions? If not, this is where the software can minimize mistakes.
We understand that your team is most likely not trying to intentionally ignore possible suspicious activity. However, if they get busy and are rushed, without these extra measures in place to catch mistakes they are more likely to make a human error that could cost you.
Our Commitment to You
One of our highest priorities and commitments to you is to make sure our BSA staff is highly qualified and properly trained.
As we seek to be a resource for you, we hold ourselves to the highest standard as well. We are in the business of compliance, so we take employee training, monitoring, and reporting very seriously.
If you have questions for our team and would like to connect, you can reach us here.
In this article we want to answer the major questions surrounding proper employee training so you can use this as a tool to improve the performance of your business.
Why you should train your employees
Most mistakes that MSBs make in their businesses are directly related to their lack of employee training.
Many mistakes can be avoided, and your business doesn’t have to suffer by being held back. But it takes a little bit of time and energy invested into best practices to create an environment that is geared towards training.
We see some MSBs focusing their time and attention in other places too often which leaves their employees unsure about how to handle certain situations. The result can come in the form of fines, slowed growth, losing your MSB license and even losing their banking relationship.
Another major reason to train employees is to fully utilize your resources and assets. For example, you are using a software for check cashing. Are you using just the surface level features or are you using it to its fullest potential? This software offers a lot of features that can make your employees’ jobs much easier and can create efficiencies that map to profitability. This asset alone could bring improvements that impact your business tremendously in the short and long term.
Employee training should be held as a high priority and taken seriously. If so, the result is a smooth operation, less drag on resources and time spent fixing mistakes and less worry about being in business in the coming months or years.
Taking employee training seriously is the first step to sustainable growth in your MSB business. It’s the foundation of everything you do and the bedrock of your business.
How to train your employees
One of the four pillars of BSA is required employee training.
Naturally, if training is not considered a high priority in your business, employees will find ways to fulfill this requirement without becoming more knowledgeable or getting better in their role. People are generally going to take the path of least resistance when it is offered to them unless you are creating an environment with a higher standard.
Taking a basic test online to fulfill training requirements isn’t always going to achieve the desired result. You’re not doing training just to say you completed it. The purpose of completing the training is to stay compliant, get better and avoid costly mistakes that can put you out of business.
Besides completing a standardized test to confirm your knowledge of the subject, employee training best practices include several other factors. We’ve listed some of them here.
Stay up to speed on current events that are happening in your industry, in your part of the region and in the world. This will give you context to trends you should be aware of and things to consider as suspicious activity.
Keeping yourself updated on topics like anti-money laundering, terrorist financing is a great place to spend some time once a week, reading articles and staying aware.
Looking up fines that other MSBs have had recently is a great way to stay on top of activities you should look out for in your business. Learning from others mistakes is a great mindset for protecting your business, not just staying compliant.
The WSJ has a section titled “compliance”. This is a great resource for keeping track of current day activities and what to look out for in your business.
The bottom line is that you should want to be the best at being compliant, because it’s a huge component to the business you’re in. To be the best, you have to seek out knowledge and resources to get better and instill that mentality in all of your employees.
As we seek to be the best in what we do, we want to be one of those resources and extend that knowledge to you so you can grow wisely.
If you have questions about employee training, please reach out to our team.
Resources for Training:
Anti-Money Laundering – https://www.acams.org/en
https://www.fincen.gov/resources/advisoriesbulletinsfact-sheets/advisories
https://www.fincen.gov/news-room/enforcement-actions
Suspicious activity reporting (SAR) enables law enforcement to initiate or supplement money laundering or terrorist financing investigations as well as other criminal cases. SARs also provide FinCEN and other federal agencies in identifying trends and patterns associated with financial crimes.
The Federal Financial Institution Examinations Council (FFIEC) website states that the most important factors for effective SAR monitoring and reporting include five key components:
• Identification or alert of unusual activity (which may include employee identification, law enforcement inquiries, other referrals, and transaction and surveillance monitoring system output).
• Managing alerts.
• SAR decision making.
• SAR completion and filing.
• Monitoring and SAR filing on continuing activity.
An effective SARs must be complete, sufficient, and filed timely. The most critical part of the SAR is the narrative. The narrative should identify the five essential elements of information (who? what? when? where? and why?) for the suspicious activity being reported. The method of operation (or how?) is also important and should be included in the narrative. Remember, you need to grab the reader’s attention with the first paragraph!
We are proud to say that we have an entire BSA Department dedicated to assist our MSB customers with questions regarding SAR filing.
Over the last decade we have worked hard to provide the absolute best and highest quality support for our MSB customers, and it has proven to support them with a high level of compliance in their businesses.
As we continue to build our banking services around our MSB customers, we look at the most important factors for sustainability and compliance and make those our goal for growth.
If you have any questions about SAR best practices or would like to speak with a BSA representative, contact us at mysuretybank.com
Cash flow is the lifeblood of any business. Whether you're managing a commercial construction firm or running a retail operation, understanding how money moves in and out of your business is key to long-term success. Poor cash flow management can leave businesses scrambling to cover expenses, even when profits look good on paper.
A recent episode of the Expandable Series discussed this in detail, but here are some fundamental cash flow principles, using commercial construction as an example, that apply to businesses across all industries.
1. Understand Your Cash Outflows
In commercial construction, significant cash outlays are required upfront for raw materials, permits, and labor. These costs must be covered well before payments from clients arrive. Similarly, in retail, manufacturers need to purchase inventory long before customers make a purchase.
A business must have enough cash on hand to cover these expenses. Without it, operations may stall, delaying projects and impacting profitability. Understanding your cash needs ahead of time ensures smoother financial management.
Example: Imagine a mid-sized construction firm, Apex Builders, takes on a new commercial office project. Before the first payment arrives, they must pay for steel beams, concrete, and skilled labor. Without proper cash reserves or a well-structured payment schedule, Apex Builders could struggle to cover these costs, potentially halting the project and damaging their reputation.
2. Time Your Cash Inflows Strategically
Revenue in commercial construction typically comes from milestone payments throughout a project or upon completion. However, these payments can be delayed due to contract terms, client approvals, or unexpected issues.
For any business, it’s essential to analyze how long it takes to convert expenses into revenue. Are you waiting 30, 60, or even 90 days to get paid? If so, your business must be structured to withstand these gaps. Ensuring that your contract terms align with your cash flow needs can prevent unnecessary financial strain.
Example: Apex Builders structures their contracts to ensure payments are received at key milestones—such as after the foundation is laid, after framing is completed, and upon final inspection. By planning these payment intervals, they reduce financial stress and ensure they always have working capital.
3. Build a Cash Buffer
One of the best strategies for managing cash flow is to build a buffer that accounts for timing discrepancies. In construction, this means having enough reserves to cover payroll and material costs while waiting for payments. The same principle applies to any business with delayed payments.
This buffer should be built into your pricing. Instead of operating on razor-thin margins, factor in potential delays and unexpected costs when setting your rates. This ensures financial stability even during slower payment periods.
Example: Apex Builders includes a 10% contingency in their project bids, ensuring that if a client delays payment or unexpected costs arise, they have the liquidity to keep operations running smoothly.
4. Plan for Payroll and Fixed Expenses
Payroll is a non-negotiable expense in any business. Employees expect timely paychecks, and failure to meet payroll obligations can lead to operational disruptions and even legal consequences.
Since payroll and other fixed expenses (like rent, utilities, and insurance) don’t change based on revenue fluctuations, they must be accounted for in advance. Forecasting these expenses over the next quarter will help ensure you always have the necessary funds available.
Example: Apex Builders schedules payments from previous projects to help cover payroll during slow months, ensuring that employees are always paid on time.
5. Look Ahead to the Next Quarter
Successful businesses don’t just think about today’s cash flow—they plan for the next quarter and beyond. What projects are in the pipeline? When will revenue from those projects be realized? What expenses need to be covered in the meantime?
By forecasting cash flow and preparing for potential shortfalls, businesses can make informed decisions about when to invest, when to hold back, and when to seek additional financing options to bridge any gaps.
Example: Apex Builders maintain a rolling cash flow projection, helping them anticipate slow periods and ensuring they never take on more projects than they can financially support at one time.
The Bottom Line
Cash flow management isn’t just about tracking numbers—it’s about planning ahead, building flexibility into your pricing, and ensuring your business can withstand the natural ebbs and flows of financial cycles. Whether you’re in commercial construction, retail, or any other industry, mastering cash flow is essential for long-term success. Surety Bank is here to help businesses navigate these challenges with financial solutions designed to keep operations running smoothly.
In the spring of 1994, Cindy walked into Surety Bank—not to apply for a job, but to apply for a mortgage. She and her family had recently moved from Michigan, and Surety was simply the place she trusted to help them settle into their new home. What she didn’t expect was that the bank would also offer her something even more life-changing—a career that would span more than three decades.
“I didn’t have to look very hard for a job,” Cindy recalls with a laugh. “They saw that I had banking experience and called me up because they needed a teller.”
It was the start of a journey that would see Cindy grow from a front-line teller to a key part of the bank’s payroll and HR team. Over the years, she became a steady presence in the bank’s evolving landscape, witnessing firsthand how technology transformed the industry. When she first started, many processes were still manual—checks were physically run through proof machines, reconciliations were done by hand, and not everyone even had a computer at their desk.
“I remember when we had to share computers,” she says. “That didn’t last too long, but things were a lot different back then.”
Cindy’s career path took her from teller to bookkeeping, then into accounting, and eventually into payroll and HR, where she found her niche. She describes her work as being part of a team that always pulled together to solve challenges—a culture of collaboration and adaptability that made Surety Bank feel like home.
“We always worked together to find solutions,” Cindy reflects. “Even though my role became more specialized over the years, it was always about teamwork.”
For Cindy, working at Surety Bank wasn’t just about the job—it was about the life it allowed her to build. Living just three miles from the bank, she was able to balance her career while staying closely involved in raising her children, supporting her husband, and nurturing her faith.
“I’ve been able to have my life at home and my life here at work,” she says. “It’s been a blessing to have a career that allowed me to be present for the things that mattered most—my family, my husband, and my faith.”
As much as she dedicated herself to her work, Cindy never lost sight of what was most important. She is deeply grateful that her time at Surety allowed her to grow professionally while still prioritizing the people she loved.
Looking back, Cindy remembers the many friendships, the changes that brought new ideas, and the way she adapted alongside the bank. Perhaps most of all, she values the relationships she built—with colleagues who became like family and customers who left a lasting impression.
Now, as she steps into retirement, Cindy is ready for a new chapter—one that revolves around her grandchildren, travel, and time with family in Michigan. It’s a bittersweet transition, but one that feels right.
“I never dreamed I’d be working someplace for 31 years,” she admits. “But as it turns out, it really went by fast.”
For those just starting their careers in banking, Cindy offers a simple but powerful piece of advice: “Be open to learning all aspects of the job. Take your time, think things through, and just go with the flow.”
After 31 years of steady dedication, Cindy leaves behind a legacy of resilience, kindness, and adaptability—a perfect reflection of the values that make Surety Bank so special. While she may be stepping away from her desk, the impact she’s made at Surety Bank will remain for years to come.
Thank you, Cindy, for 31 incredible years. Your Surety Bank family will miss you!
Durable Medical Equipment (DME) is defined as any medical equipment used in the home to aid in a better quality of living. The term includes wheelchairs, knee braces, hospital beds, nebulizers, walkers, etc. DME is a benefit included in most insurances including Medicare Part B which covers medically necessary DME that is prescribed by a physician for use in a patient’s home.
According to an AARP Bulletin titled “Medicare Under Assault From Fraudsters”, “roughly 10 cents of every dollar budgeted for the giant health insurance program is stolen or misdirected before it helps any enrollee. Malcom Sparrow, a Harvard University professor and leading expert on health care fraud, says the true amount lost to fraud, abuse or improper payments could be 20 percent, or even as high as 30 percent.” See below a graphic that puts the scale of Medicare fraud into perspective.
As you can see, DME fraud has become a huge business for criminals, and they are increasingly using MSBs to provide illegal kickbacks to physicians, launder their illegal proceeds, and take advantage of fraud victims. This behavior should disgust any American taxpayer, if not morally, think about how much of our hard-earned money over the years goes straight into these fraudsters’ pockets.
How it works:
See below an excerpt from a February 4, 2021, Department of Justice Press release titled “Florida Businesswoman Pleads Guilty to Criminal Health Care and Tax Fraud Charges and Agrees to $20.3 Million Civil False Claims Act Settlement”
[According to court documents, Wolfe and her conspirators used Regency to establish dozens of DME supply companies — or, rather, DME fronts — using trickery and deception. The scheme involved placing the DME fronts in the names of straw owners. By concealing the true ownership, Wolfe’s conspirators secretly gained control of multiple companies. With such control, they collectively submitted well over $400 million in illegal DME claims to Medicare and the Civilian Health and Medical Program of the VA. The conspirators claimed that the unusually high volume of claims reflected the use of telemedicine procedures, when, in fact, they had simply bribed doctors to approve them. Almost always, the doctors had no telehealth interaction with the beneficiaries.]
As you can see Wolfe established multiple shell companies and submitted over $400 million in illegal DME claims to Medicare and the Civilian Health and Medical Program of the VA. Another crucial element of the scheme is she bribed doctors to approve these fraudulent invoices stating they conducted telehealth services for the beneficiaries. The illegal kickbacks to doctors is what check cashing MSBs will encounter. A pattern we have picked up on is checks from companies with “Medical Equipment, DME, Braces, Devices, etc.” made payable to individuals that turn out to be physicians or money mules are likely illegal kickbacks to doctors for signing off on fraudulent DME claims.
Anti-Kickback Statute [42 U.S.C. § 1320a-7b(b)]
The AKS is a criminal law that prohibits the knowing and willful payment of “remuneration” to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs (e.g., drugs, supplies, or health care services for Medicare or Medicaid patients). Remuneration includes anything of value and can take many forms besides cash, such as free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies. In some industries, it is acceptable to reward those who refer business to you. However, in the Federal health care programs, paying for referrals is a crime. The statute covers the payers of kickbacks-those who offer or pay remuneration- as well as the recipients of kickbacks-those who solicit or receive remuneration. Each party’s intent is a key element of their liability under the AKS.
Criminal penalties and administrative sanctions for violating the AKS include fines, jail terms, and exclusion from participation in the Federal health care programs. Under the CMPL, physicians who pay or accept kickbacks also face penalties of up to $50,000 per kickback plus three times the amount of the remuneration.
Other Examples:
Red flags we have identified relating to DME fraud kickbacks are as follows:
• Maker names related to medical equipment writing checks out to individuals. The dollar amount can be random, but we see a lot in the $2,000 – $9,000 range. Less sophisticated actors will structure these payments to remain under the $10,000 CTR threshold.
• When you look up the registered agents of these DME companies on publicly available databases such as Sunbiz.org in Florida, they often control several other companies related to medical equipment that have been recently established. This is indicative of shell companies just like we saw in the above example from the DOJ press release.
• A payee that comes into the check cashing store and regularly cashes checks made payable from DME related companies. You may want to conduct and internet search of these individuals and determine if they are a physician.
What to do if you suspect DME fraudsters are taking advantage of your business to facilitate payments?
If you suspect a potential customer or customer is involved in DME fraud you should investigate to determine if any of the above red flags are involved. As always, you should ask yourself does this activity make sense given the nature of the alleged business? If you determine an existing customer is involved in DME fraud and has conducted transactions aggregating over the SAR dollar volume threshold, file a SAR. As always if you suspect a customer is involved in illegal activity you need to block them from doing business with you. No matter how profitable the relationship is, it’s not worth being fined, losing your license, or ending up in a Department of Justice press release.
Sources:
https://www.aarp.org/money/scams-fraud/info-2018/medicare-scams-fraud-identity-theft.html
https://oig.hhs.gov/compliance/physician-education/01laws.asp
Better Monitoring
Per federal and state guidelines, MSBs are required to monitor their customers’ transactions for suspicious and illegal activity.
Over the past year and a half, the Federal and State governments have issued a huge amount of money to individuals and businesses in the form of Covid-19 stimulus packages. Criminals have been exploiting this situation by committing financial crimes at an unprecedented rate. See a few examples below.
“IRVINE, Calif. (KABC) — An Irvine man allegedly obtained about $5 million in federal coronavirus-relief loans for his fake businesses and then spent the funds on himself, including buying Ferrari, Bentley and Lamborghini sports cars, according to federal authorities.”
“BOSTON — The owner of a Massachusetts pizza parlor lied about the number of employees he had to fraudulently obtain more than $660,000 in federal coronavirus relief funds, then used some of the money to buy and stock an alpaca farm in Vermont, federal prosecutors said Tuesday.”
“According to the report by the Times, Abidemi Rufai, of Lekki, Nigeria, was charged Saturday in federal court with using the identities of more than 100 Washington residents to steal more than $350,000 in unemployment benefits from the Washington state Employment Security Department (ESD) during the COVID-19 pandemic last year.”
How can you improve your quality of monitoring?
Here are some tips on how to get better:
Better Reporting
Reporting should be a natural extension of your monitoring practices. If you are making your monitoring a high priority, good reporting will naturally flow from those activities.
It is very important to file CTRs on a timely basis, within 15 days.
If you are using your check cashing software fully, it will help with the practice of reporting. Especially with CTRs, when a suspicious activity is identified, your software will trigger a CTR. In addition, it will aggregate the data on a customer, pulling all their transactions together if they have made multiple transactions at different times of the day.
Investing in additional features like these and learning how to use them minimizes mistakes.
For example, if a customer comes in three separate times during a day and cashes a $5,000 check each time, will your employees know to aggregate all of those transactions? If not, this is where the software can minimize mistakes.
We understand that your team is most likely not trying to intentionally ignore possible suspicious activity. However, if they get busy and are rushed, without these extra measures in place to catch mistakes they are more likely to make a human error that could cost you.
Our Commitment to You
One of our highest priorities and commitments to you is to make sure our BSA staff is highly qualified and properly trained.
As we seek to be a resource for you, we hold ourselves to the highest standard as well. We are in the business of compliance, so we take employee training, monitoring, and reporting very seriously.
If you have questions for our team and would like to connect, you can reach us here.
In this article we want to answer the major questions surrounding proper employee training so you can use this as a tool to improve the performance of your business.
Why you should train your employees
Most mistakes that MSBs make in their businesses are directly related to their lack of employee training.
Many mistakes can be avoided, and your business doesn’t have to suffer by being held back. But it takes a little bit of time and energy invested into best practices to create an environment that is geared towards training.
We see some MSBs focusing their time and attention in other places too often which leaves their employees unsure about how to handle certain situations. The result can come in the form of fines, slowed growth, losing your MSB license and even losing their banking relationship.
Another major reason to train employees is to fully utilize your resources and assets. For example, you are using a software for check cashing. Are you using just the surface level features or are you using it to its fullest potential? This software offers a lot of features that can make your employees’ jobs much easier and can create efficiencies that map to profitability. This asset alone could bring improvements that impact your business tremendously in the short and long term.
Employee training should be held as a high priority and taken seriously. If so, the result is a smooth operation, less drag on resources and time spent fixing mistakes and less worry about being in business in the coming months or years.
Taking employee training seriously is the first step to sustainable growth in your MSB business. It’s the foundation of everything you do and the bedrock of your business.
How to train your employees
One of the four pillars of BSA is required employee training.
Naturally, if training is not considered a high priority in your business, employees will find ways to fulfill this requirement without becoming more knowledgeable or getting better in their role. People are generally going to take the path of least resistance when it is offered to them unless you are creating an environment with a higher standard.
Taking a basic test online to fulfill training requirements isn’t always going to achieve the desired result. You’re not doing training just to say you completed it. The purpose of completing the training is to stay compliant, get better and avoid costly mistakes that can put you out of business.
Besides completing a standardized test to confirm your knowledge of the subject, employee training best practices include several other factors. We’ve listed some of them here.
Stay up to speed on current events that are happening in your industry, in your part of the region and in the world. This will give you context to trends you should be aware of and things to consider as suspicious activity.
Keeping yourself updated on topics like anti-money laundering, terrorist financing is a great place to spend some time once a week, reading articles and staying aware.
Looking up fines that other MSBs have had recently is a great way to stay on top of activities you should look out for in your business. Learning from others mistakes is a great mindset for protecting your business, not just staying compliant.
The WSJ has a section titled “compliance”. This is a great resource for keeping track of current day activities and what to look out for in your business.
The bottom line is that you should want to be the best at being compliant, because it’s a huge component to the business you’re in. To be the best, you have to seek out knowledge and resources to get better and instill that mentality in all of your employees.
As we seek to be the best in what we do, we want to be one of those resources and extend that knowledge to you so you can grow wisely.
If you have questions about employee training, please reach out to our team.
Resources for Training:
Anti-Money Laundering – https://www.acams.org/en
https://www.fincen.gov/resources/advisoriesbulletinsfact-sheets/advisories
https://www.fincen.gov/news-room/enforcement-actions
Suspicious activity reporting (SAR) enables law enforcement to initiate or supplement money laundering or terrorist financing investigations as well as other criminal cases. SARs also provide FinCEN and other federal agencies in identifying trends and patterns associated with financial crimes.
The Federal Financial Institution Examinations Council (FFIEC) website states that the most important factors for effective SAR monitoring and reporting include five key components:
• Identification or alert of unusual activity (which may include employee identification, law enforcement inquiries, other referrals, and transaction and surveillance monitoring system output).
• Managing alerts.
• SAR decision making.
• SAR completion and filing.
• Monitoring and SAR filing on continuing activity.
An effective SARs must be complete, sufficient, and filed timely. The most critical part of the SAR is the narrative. The narrative should identify the five essential elements of information (who? what? when? where? and why?) for the suspicious activity being reported. The method of operation (or how?) is also important and should be included in the narrative. Remember, you need to grab the reader’s attention with the first paragraph!
We are proud to say that we have an entire BSA Department dedicated to assist our MSB customers with questions regarding SAR filing.
Over the last decade we have worked hard to provide the absolute best and highest quality support for our MSB customers, and it has proven to support them with a high level of compliance in their businesses.
As we continue to build our banking services around our MSB customers, we look at the most important factors for sustainability and compliance and make those our goal for growth.
If you have any questions about SAR best practices or would like to speak with a BSA representative, contact us at mysuretybank.com
Cash flow is the lifeblood of any business. Whether you're managing a commercial construction firm or running a retail operation, understanding how money moves in and out of your business is key to long-term success. Poor cash flow management can leave businesses scrambling to cover expenses, even when profits look good on paper.
A recent episode of the Expandable Series discussed this in detail, but here are some fundamental cash flow principles, using commercial construction as an example, that apply to businesses across all industries.
1. Understand Your Cash Outflows
In commercial construction, significant cash outlays are required upfront for raw materials, permits, and labor. These costs must be covered well before payments from clients arrive. Similarly, in retail, manufacturers need to purchase inventory long before customers make a purchase.
A business must have enough cash on hand to cover these expenses. Without it, operations may stall, delaying projects and impacting profitability. Understanding your cash needs ahead of time ensures smoother financial management.
Example: Imagine a mid-sized construction firm, Apex Builders, takes on a new commercial office project. Before the first payment arrives, they must pay for steel beams, concrete, and skilled labor. Without proper cash reserves or a well-structured payment schedule, Apex Builders could struggle to cover these costs, potentially halting the project and damaging their reputation.
2. Time Your Cash Inflows Strategically
Revenue in commercial construction typically comes from milestone payments throughout a project or upon completion. However, these payments can be delayed due to contract terms, client approvals, or unexpected issues.
For any business, it’s essential to analyze how long it takes to convert expenses into revenue. Are you waiting 30, 60, or even 90 days to get paid? If so, your business must be structured to withstand these gaps. Ensuring that your contract terms align with your cash flow needs can prevent unnecessary financial strain.
Example: Apex Builders structures their contracts to ensure payments are received at key milestones—such as after the foundation is laid, after framing is completed, and upon final inspection. By planning these payment intervals, they reduce financial stress and ensure they always have working capital.
3. Build a Cash Buffer
One of the best strategies for managing cash flow is to build a buffer that accounts for timing discrepancies. In construction, this means having enough reserves to cover payroll and material costs while waiting for payments. The same principle applies to any business with delayed payments.
This buffer should be built into your pricing. Instead of operating on razor-thin margins, factor in potential delays and unexpected costs when setting your rates. This ensures financial stability even during slower payment periods.
Example: Apex Builders includes a 10% contingency in their project bids, ensuring that if a client delays payment or unexpected costs arise, they have the liquidity to keep operations running smoothly.
4. Plan for Payroll and Fixed Expenses
Payroll is a non-negotiable expense in any business. Employees expect timely paychecks, and failure to meet payroll obligations can lead to operational disruptions and even legal consequences.
Since payroll and other fixed expenses (like rent, utilities, and insurance) don’t change based on revenue fluctuations, they must be accounted for in advance. Forecasting these expenses over the next quarter will help ensure you always have the necessary funds available.
Example: Apex Builders schedules payments from previous projects to help cover payroll during slow months, ensuring that employees are always paid on time.
5. Look Ahead to the Next Quarter
Successful businesses don’t just think about today’s cash flow—they plan for the next quarter and beyond. What projects are in the pipeline? When will revenue from those projects be realized? What expenses need to be covered in the meantime?
By forecasting cash flow and preparing for potential shortfalls, businesses can make informed decisions about when to invest, when to hold back, and when to seek additional financing options to bridge any gaps.
Example: Apex Builders maintain a rolling cash flow projection, helping them anticipate slow periods and ensuring they never take on more projects than they can financially support at one time.
The Bottom Line
Cash flow management isn’t just about tracking numbers—it’s about planning ahead, building flexibility into your pricing, and ensuring your business can withstand the natural ebbs and flows of financial cycles. Whether you’re in commercial construction, retail, or any other industry, mastering cash flow is essential for long-term success. Surety Bank is here to help businesses navigate these challenges with financial solutions designed to keep operations running smoothly.
In the spring of 1994, Cindy walked into Surety Bank—not to apply for a job, but to apply for a mortgage. She and her family had recently moved from Michigan, and Surety was simply the place she trusted to help them settle into their new home. What she didn’t expect was that the bank would also offer her something even more life-changing—a career that would span more than three decades.
“I didn’t have to look very hard for a job,” Cindy recalls with a laugh. “They saw that I had banking experience and called me up because they needed a teller.”
It was the start of a journey that would see Cindy grow from a front-line teller to a key part of the bank’s payroll and HR team. Over the years, she became a steady presence in the bank’s evolving landscape, witnessing firsthand how technology transformed the industry. When she first started, many processes were still manual—checks were physically run through proof machines, reconciliations were done by hand, and not everyone even had a computer at their desk.
“I remember when we had to share computers,” she says. “That didn’t last too long, but things were a lot different back then.”
Cindy’s career path took her from teller to bookkeeping, then into accounting, and eventually into payroll and HR, where she found her niche. She describes her work as being part of a team that always pulled together to solve challenges—a culture of collaboration and adaptability that made Surety Bank feel like home.
“We always worked together to find solutions,” Cindy reflects. “Even though my role became more specialized over the years, it was always about teamwork.”
For Cindy, working at Surety Bank wasn’t just about the job—it was about the life it allowed her to build. Living just three miles from the bank, she was able to balance her career while staying closely involved in raising her children, supporting her husband, and nurturing her faith.
“I’ve been able to have my life at home and my life here at work,” she says. “It’s been a blessing to have a career that allowed me to be present for the things that mattered most—my family, my husband, and my faith.”
As much as she dedicated herself to her work, Cindy never lost sight of what was most important. She is deeply grateful that her time at Surety allowed her to grow professionally while still prioritizing the people she loved.
Looking back, Cindy remembers the many friendships, the changes that brought new ideas, and the way she adapted alongside the bank. Perhaps most of all, she values the relationships she built—with colleagues who became like family and customers who left a lasting impression.
Now, as she steps into retirement, Cindy is ready for a new chapter—one that revolves around her grandchildren, travel, and time with family in Michigan. It’s a bittersweet transition, but one that feels right.
“I never dreamed I’d be working someplace for 31 years,” she admits. “But as it turns out, it really went by fast.”
For those just starting their careers in banking, Cindy offers a simple but powerful piece of advice: “Be open to learning all aspects of the job. Take your time, think things through, and just go with the flow.”
After 31 years of steady dedication, Cindy leaves behind a legacy of resilience, kindness, and adaptability—a perfect reflection of the values that make Surety Bank so special. While she may be stepping away from her desk, the impact she’s made at Surety Bank will remain for years to come.
Thank you, Cindy, for 31 incredible years. Your Surety Bank family will miss you!
Durable Medical Equipment (DME) is defined as any medical equipment used in the home to aid in a better quality of living. The term includes wheelchairs, knee braces, hospital beds, nebulizers, walkers, etc. DME is a benefit included in most insurances including Medicare Part B which covers medically necessary DME that is prescribed by a physician for use in a patient’s home.
According to an AARP Bulletin titled “Medicare Under Assault From Fraudsters”, “roughly 10 cents of every dollar budgeted for the giant health insurance program is stolen or misdirected before it helps any enrollee. Malcom Sparrow, a Harvard University professor and leading expert on health care fraud, says the true amount lost to fraud, abuse or improper payments could be 20 percent, or even as high as 30 percent.” See below a graphic that puts the scale of Medicare fraud into perspective.
As you can see, DME fraud has become a huge business for criminals, and they are increasingly using MSBs to provide illegal kickbacks to physicians, launder their illegal proceeds, and take advantage of fraud victims. This behavior should disgust any American taxpayer, if not morally, think about how much of our hard-earned money over the years goes straight into these fraudsters’ pockets.
How it works:
See below an excerpt from a February 4, 2021, Department of Justice Press release titled “Florida Businesswoman Pleads Guilty to Criminal Health Care and Tax Fraud Charges and Agrees to $20.3 Million Civil False Claims Act Settlement”
[According to court documents, Wolfe and her conspirators used Regency to establish dozens of DME supply companies — or, rather, DME fronts — using trickery and deception. The scheme involved placing the DME fronts in the names of straw owners. By concealing the true ownership, Wolfe’s conspirators secretly gained control of multiple companies. With such control, they collectively submitted well over $400 million in illegal DME claims to Medicare and the Civilian Health and Medical Program of the VA. The conspirators claimed that the unusually high volume of claims reflected the use of telemedicine procedures, when, in fact, they had simply bribed doctors to approve them. Almost always, the doctors had no telehealth interaction with the beneficiaries.]
As you can see Wolfe established multiple shell companies and submitted over $400 million in illegal DME claims to Medicare and the Civilian Health and Medical Program of the VA. Another crucial element of the scheme is she bribed doctors to approve these fraudulent invoices stating they conducted telehealth services for the beneficiaries. The illegal kickbacks to doctors is what check cashing MSBs will encounter. A pattern we have picked up on is checks from companies with “Medical Equipment, DME, Braces, Devices, etc.” made payable to individuals that turn out to be physicians or money mules are likely illegal kickbacks to doctors for signing off on fraudulent DME claims.
Anti-Kickback Statute [42 U.S.C. § 1320a-7b(b)]
The AKS is a criminal law that prohibits the knowing and willful payment of “remuneration” to induce or reward patient referrals or the generation of business involving any item or service payable by the Federal health care programs (e.g., drugs, supplies, or health care services for Medicare or Medicaid patients). Remuneration includes anything of value and can take many forms besides cash, such as free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies. In some industries, it is acceptable to reward those who refer business to you. However, in the Federal health care programs, paying for referrals is a crime. The statute covers the payers of kickbacks-those who offer or pay remuneration- as well as the recipients of kickbacks-those who solicit or receive remuneration. Each party’s intent is a key element of their liability under the AKS.
Criminal penalties and administrative sanctions for violating the AKS include fines, jail terms, and exclusion from participation in the Federal health care programs. Under the CMPL, physicians who pay or accept kickbacks also face penalties of up to $50,000 per kickback plus three times the amount of the remuneration.
Other Examples:
Red flags we have identified relating to DME fraud kickbacks are as follows:
• Maker names related to medical equipment writing checks out to individuals. The dollar amount can be random, but we see a lot in the $2,000 – $9,000 range. Less sophisticated actors will structure these payments to remain under the $10,000 CTR threshold.
• When you look up the registered agents of these DME companies on publicly available databases such as Sunbiz.org in Florida, they often control several other companies related to medical equipment that have been recently established. This is indicative of shell companies just like we saw in the above example from the DOJ press release.
• A payee that comes into the check cashing store and regularly cashes checks made payable from DME related companies. You may want to conduct and internet search of these individuals and determine if they are a physician.
What to do if you suspect DME fraudsters are taking advantage of your business to facilitate payments?
If you suspect a potential customer or customer is involved in DME fraud you should investigate to determine if any of the above red flags are involved. As always, you should ask yourself does this activity make sense given the nature of the alleged business? If you determine an existing customer is involved in DME fraud and has conducted transactions aggregating over the SAR dollar volume threshold, file a SAR. As always if you suspect a customer is involved in illegal activity you need to block them from doing business with you. No matter how profitable the relationship is, it’s not worth being fined, losing your license, or ending up in a Department of Justice press release.
Sources:
https://www.aarp.org/money/scams-fraud/info-2018/medicare-scams-fraud-identity-theft.html
https://oig.hhs.gov/compliance/physician-education/01laws.asp
Better Monitoring
Per federal and state guidelines, MSBs are required to monitor their customers’ transactions for suspicious and illegal activity.
Over the past year and a half, the Federal and State governments have issued a huge amount of money to individuals and businesses in the form of Covid-19 stimulus packages. Criminals have been exploiting this situation by committing financial crimes at an unprecedented rate. See a few examples below.
“IRVINE, Calif. (KABC) — An Irvine man allegedly obtained about $5 million in federal coronavirus-relief loans for his fake businesses and then spent the funds on himself, including buying Ferrari, Bentley and Lamborghini sports cars, according to federal authorities.”
“BOSTON — The owner of a Massachusetts pizza parlor lied about the number of employees he had to fraudulently obtain more than $660,000 in federal coronavirus relief funds, then used some of the money to buy and stock an alpaca farm in Vermont, federal prosecutors said Tuesday.”
“According to the report by the Times, Abidemi Rufai, of Lekki, Nigeria, was charged Saturday in federal court with using the identities of more than 100 Washington residents to steal more than $350,000 in unemployment benefits from the Washington state Employment Security Department (ESD) during the COVID-19 pandemic last year.”
How can you improve your quality of monitoring?
Here are some tips on how to get better:
Better Reporting
Reporting should be a natural extension of your monitoring practices. If you are making your monitoring a high priority, good reporting will naturally flow from those activities.
It is very important to file CTRs on a timely basis, within 15 days.
If you are using your check cashing software fully, it will help with the practice of reporting. Especially with CTRs, when a suspicious activity is identified, your software will trigger a CTR. In addition, it will aggregate the data on a customer, pulling all their transactions together if they have made multiple transactions at different times of the day.
Investing in additional features like these and learning how to use them minimizes mistakes.
For example, if a customer comes in three separate times during a day and cashes a $5,000 check each time, will your employees know to aggregate all of those transactions? If not, this is where the software can minimize mistakes.
We understand that your team is most likely not trying to intentionally ignore possible suspicious activity. However, if they get busy and are rushed, without these extra measures in place to catch mistakes they are more likely to make a human error that could cost you.
Our Commitment to You
One of our highest priorities and commitments to you is to make sure our BSA staff is highly qualified and properly trained.
As we seek to be a resource for you, we hold ourselves to the highest standard as well. We are in the business of compliance, so we take employee training, monitoring, and reporting very seriously.
If you have questions for our team and would like to connect, you can reach us here.
In this article we want to answer the major questions surrounding proper employee training so you can use this as a tool to improve the performance of your business.
Why you should train your employees
Most mistakes that MSBs make in their businesses are directly related to their lack of employee training.
Many mistakes can be avoided, and your business doesn’t have to suffer by being held back. But it takes a little bit of time and energy invested into best practices to create an environment that is geared towards training.
We see some MSBs focusing their time and attention in other places too often which leaves their employees unsure about how to handle certain situations. The result can come in the form of fines, slowed growth, losing your MSB license and even losing their banking relationship.
Another major reason to train employees is to fully utilize your resources and assets. For example, you are using a software for check cashing. Are you using just the surface level features or are you using it to its fullest potential? This software offers a lot of features that can make your employees’ jobs much easier and can create efficiencies that map to profitability. This asset alone could bring improvements that impact your business tremendously in the short and long term.
Employee training should be held as a high priority and taken seriously. If so, the result is a smooth operation, less drag on resources and time spent fixing mistakes and less worry about being in business in the coming months or years.
Taking employee training seriously is the first step to sustainable growth in your MSB business. It’s the foundation of everything you do and the bedrock of your business.
How to train your employees
One of the four pillars of BSA is required employee training.
Naturally, if training is not considered a high priority in your business, employees will find ways to fulfill this requirement without becoming more knowledgeable or getting better in their role. People are generally going to take the path of least resistance when it is offered to them unless you are creating an environment with a higher standard.
Taking a basic test online to fulfill training requirements isn’t always going to achieve the desired result. You’re not doing training just to say you completed it. The purpose of completing the training is to stay compliant, get better and avoid costly mistakes that can put you out of business.
Besides completing a standardized test to confirm your knowledge of the subject, employee training best practices include several other factors. We’ve listed some of them here.
Stay up to speed on current events that are happening in your industry, in your part of the region and in the world. This will give you context to trends you should be aware of and things to consider as suspicious activity.
Keeping yourself updated on topics like anti-money laundering, terrorist financing is a great place to spend some time once a week, reading articles and staying aware.
Looking up fines that other MSBs have had recently is a great way to stay on top of activities you should look out for in your business. Learning from others mistakes is a great mindset for protecting your business, not just staying compliant.
The WSJ has a section titled “compliance”. This is a great resource for keeping track of current day activities and what to look out for in your business.
The bottom line is that you should want to be the best at being compliant, because it’s a huge component to the business you’re in. To be the best, you have to seek out knowledge and resources to get better and instill that mentality in all of your employees.
As we seek to be the best in what we do, we want to be one of those resources and extend that knowledge to you so you can grow wisely.
If you have questions about employee training, please reach out to our team.
Resources for Training:
Anti-Money Laundering – https://www.acams.org/en
https://www.fincen.gov/resources/advisoriesbulletinsfact-sheets/advisories
https://www.fincen.gov/news-room/enforcement-actions
Suspicious activity reporting (SAR) enables law enforcement to initiate or supplement money laundering or terrorist financing investigations as well as other criminal cases. SARs also provide FinCEN and other federal agencies in identifying trends and patterns associated with financial crimes.
The Federal Financial Institution Examinations Council (FFIEC) website states that the most important factors for effective SAR monitoring and reporting include five key components:
• Identification or alert of unusual activity (which may include employee identification, law enforcement inquiries, other referrals, and transaction and surveillance monitoring system output).
• Managing alerts.
• SAR decision making.
• SAR completion and filing.
• Monitoring and SAR filing on continuing activity.
An effective SARs must be complete, sufficient, and filed timely. The most critical part of the SAR is the narrative. The narrative should identify the five essential elements of information (who? what? when? where? and why?) for the suspicious activity being reported. The method of operation (or how?) is also important and should be included in the narrative. Remember, you need to grab the reader’s attention with the first paragraph!
We are proud to say that we have an entire BSA Department dedicated to assist our MSB customers with questions regarding SAR filing.
Over the last decade we have worked hard to provide the absolute best and highest quality support for our MSB customers, and it has proven to support them with a high level of compliance in their businesses.
As we continue to build our banking services around our MSB customers, we look at the most important factors for sustainability and compliance and make those our goal for growth.
If you have any questions about SAR best practices or would like to speak with a BSA representative, contact us at mysuretybank.com
Surety Bank continually works to provide greater accessibility to all of its products and services. If you have any questions about accessible banking, call us at 1-855-4SURETY
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