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SAR or CTR?
Answers by Richard Insley, David Dickinson, Jim Bedsole, Andy Zavoina BOL Gurus

Question: We have a customer who in the past several days has cashed checks on the same account for $9,500. Our head compliance officer says that a CTR should be completed for the total. I disagree. I think a SAR should be completed because it appears that the customer is structuring and/or attempting to avoid Federal filing of CTR's.

Answer by Richard Insley:
BIO AND CONTACT INFO
You clearly do not have a CTRable series of events because the multiple transactions did not occur during a single business day AND do not aggregate to more than $10,000. Given no additional information than the dollar amount of the withdrawals, I don't recommend a SAR either. SARs should be used for reporting crimes or suspected crimes. It's not a crime to have cash and the customer has not evaded a CTR filing requirement because no CTR is required for a single withdrawal of less than $10,000. If you have additional details suggesting that the customer may be using the money to fund terrorism or some other specified unlawful activity, then you should file a SAR indicating what type of criminal activity you suspect.

Answer by David Dickinson:
BIO AND CONTACT INFO
I agree with Richard that a CTR is not required and should not be filed. But I respectfully disagree about the SAR. It sounds like this is a structuring or evasion activity. You have to be the judge, but we are required to file a SAR for "suspicious" activity. This sounds like an evasion activity and seems suspicious to me. Good luck.

Answer by Jim Bedsole:
BIO AND CONTACT INFO
I don't think Richard is saying there can't be some additional factors that would lead to a level of suspicion reasonable enough to require a SAR. I understand him to be saying that there weren't any facts presented in the case that would support this. The mere cashing of several checks on several days for $9,500 is not structuring and you don't have a reasonable basis for suspecting structuring absent any other information. It probably is enough that it should prompt a little more digging (like where are the checks coming from, is there a reasonable explanation why they are the amount and timing they are, etc.). Then you might have enough for a reasonable basis of suspicion of structuring and if so, should file a SAR.

Answer by Richard Insley:
BIO AND CONTACT INFO
How can you say it's evasive until a CTR has actually been evaded?

Answer by Andy Zavoina:
BIO AND CONTACT INFO
The bank has to review the account and determine if it is reasonable to believe, based on the amount and frequency of the items cashed, that there is structuring. If the checks are in consecutive days and from the entity, this could be a reasonable assumption. There may also be other answers which would validate the transactions. Ask!

Examiners now ask for not only SARs filed, but the near misses. This type of exam will likely prompt more near misses into being SARs.

Answer by David Dickinson:
BIO AND CONTACT INFO
This sounds very "evasive" to me. I don't quite understand your response to mine. No CTR is filed in the case described because no cash >$10,000 ever occurred. The customer seems to be keeping the cash amount <$10,000 on purpose (which is evading the filing of a CTR).

Answer by Richard Insley:
BIO AND CONTACT INFO
I think we may have a problem with the facts given with the post.

I'm arguing that no CTR is needed because I read the question to mean that there are several items adding up to $9,500. If instead the inquirer meant SEVERAL $9,500 items, then I agree with David completely.

Answer by David Dickinson:
BIO AND CONTACT INFO
I see, I see. I couldn't understand why Richard was not lining up with me on this one. I made some different assumptions than he did. Good that you could see that Richard - I didn't.

I'm presuming the customer is coming in with 1 check written to "cash" for $9,500 and doing this on several occasions. Still no CTR, but it is suspicious of structuring/evasion.

Answer by Richard Insley:
BIO AND CONTACT INFO
Yes, if that's the transaction pattern and I knew little or nothing about the customer, then I'd be filing a SAR, too.

I'm always more reluctant to recommend a SAR for cash out transactions than cash in, however. Money laundering rarely takes the form of cash withdrawals. The cash is usually what's dirty and the bad guys are anxious to convert it to balances.

First published on BankersOnline.com 6/30/03







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