"I don't believe it'd be realistically possible to stop this from occurring." - It already happens and is already stopped so you're wrong on that one.
Obviously it would then lead to them asking why he was choosing to pay the builder in such a manner, rather than just doing a bank transfer. Ultimately could lead into an investigation of some sort.
Mob boss starts a building company, paying the employees with dirty cash (but hey, no income tax, so no ones complains).
Building company charges customers, but asks for it in cash.
Dirty money goes out to construction employees, clean cash comes in from customers. The Bank flag is just saying there is laundering occurring near the money.
Laundering money is almost always done through b2c businesses where it's harder to trace all the customers. You start a cafe, and then you say you had 1.000 customers daily when you really had 100. You pay the tax for the remaining 900 coffees and now your money are clean.
Then again, my ATM withdrawals are in another country, so maybe it's treated differently since it looks like a remittance.
Yet another example why cash has to be limited as much as possible.