Legal Definitions - suspicious-transaction report

A suspicious-transaction report is a form that banks and other financial institutions use to report transactions that may be related to a violation of the Bank Secrecy Act or its regulations. It may also suggest money-laundering or tax evasion.

Formerly known as IRS Form 4789, this report includes a checkbox that financial institutions can use to indicate that a transaction is suspicious. However, this checkbox has been replaced by the suspicious-activity report.

Suppose a customer comes into a bank and tries to deposit a large sum of money in cash without providing any explanation for where the money came from. The bank may file a suspicious-transaction report to alert authorities to the possibility of money-laundering or other illegal activity.

Another example could be a customer who frequently deposits large sums of money into their account from different sources, but never withdraws any money. This could be a sign of money-laundering, and the bank may file a suspicious-transaction report.

These examples illustrate how a suspicious-transaction report can help financial institutions identify potentially illegal activity and report it to the appropriate authorities.