>The buyer dropped a hint about using it for illegal purposes, but I don't see how that's any concern of the seller.

My old roommate and I used to use the Memo line on checks to imply that the money exchanged was for "sexual favors" or "drugs" or "illegal weapons" (yes, I'm aware that lots of people do this and we weren't very clever), when it was really one person paying their share of utilities to the other. As far as I know, BofA and PNC never reported us to the feds.