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Question & Answer
Question: I'm having a bit of a problem with SARs. There is an exception rule in there that says a SAR "…does not need to be filed for those robberies and burglaries that are reported to local authorities or for lost, missing, counterfeit or stolen securities that are reported …etc." We have suffered a loss because we cashed some counterfeit checks, and we reported that to the local police and to the board of directors. I figured we also had to file a SAR, but I'm being questioned as to whether or not we have to report this on an SAR or just to the BOD and the police. Can you clarify for me?
Answer: Negotiating fraudulent checks has nothing to do with robbery or burglary, and yes, you should report this crime on a SAR. If your loss was over $5,000 and you know who did it, you MUST report it. If less than that, and you have details that may help an investigation, you will want to report it anyway. If you read 1(b) of the SAR, you'll see that you are required to report any activity "…where the financial institution believes that it was either an actual or potential victim of a criminal violation…" Negotiation of counterfeit checks definitely falls into that category. Physical robbery, or a break-in burglary should not be reported on a SAR.
Copyright © 1999 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 9, No. 4, 5/99
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