Convicts And the Contents Of Safe Deposit Boxes
Answer by: Mary Beth Guard, BOL Guru BIO AND CONTACT INFO
Question: We have a customer that opened a safe deposit box with our bank. Two months later he was arrested in another state for armed robbery. No other details.
The rental was past due and we sent a certified letter to his last know
address. Rent was past due 5 years. Had not heard anything from customer
from 1993 until this October. He attempted to reclaim the items from the
drilled box. All identification had expired (he had been in prison all that
time). We refused since all identification was expired and we had no proof
it was him. He has now contacted an attorney and is demanding the contents.
During the course of talking with the branch in trying to identify the
person, a copy of the contents was sent to my attention. Should we file a
SAR since we know he served time for armed robbery and the contents are
numerous pieces of jewelry (Rolex watches, loose diamonds, diamond pendants,
12 rings, etc.). This is a new one for me.
Answer: The rights of the safe deposit renter will be governed by your safe
deposit lease agreement and state law. Typically, when a renter fails
to pay the rent, the lessor is given a lessor's lien on the contents for
the unpaid rent, as well as the costs of drilling the box and taking
other administrative steps to deal with the property. After
satisfaction of those costs and charges, the renter typically has a
right to reclaim the property. If not claimed, it eventually becomes
presumed abandoned and must be reported to the state under the unclaimed
property laws. Assuming the renter can furnish proof of identity and,
we would hope, the key, and he is willing to satisfy amounts due for
unpaid rent and any other fees your contract and the applicable statutes
allow you to charge, he should be entitled to reclaim his property.
Nonetheless, your banker radar should be beeping wildly due to the
circumstances surrounding this box. The renter is sent to prison for
armed robbery shortly after renting the box. The contents remain
unclaimed while he's incarcerated. Upon drilling, you discover the box
contains multiple Rolex watches, loose diamonds, diamond pendants and a
dozen rings. There may be a logical explanation. Perhaps he was a
jeweler. Maybe he received the jewelry as an inheritance. Possibly, he
just likes buying pretty things. Yes, and maybe I'm Marie, Empress of
Romania. Not likely.
Take a good hard look at what you do know about this individual. Did he
have other customer relationships with you, aside from the safe deposit
rental. Had you previously pulled a credit report or received an
application from him that would offer insight into his financial
circumstances and/or employment history? Do you have enough information
about where he was arrested and did time to enable you to call the
police or prosecutor in that jurisdiction to see if they can furnish
information about the robberies with which he was charged? Can you talk
to the police (both local and in the jurisdiction where he was arrested)
about any lists they might have of jewelry that has been reported
stolen, but never recovered?
I wouldn't ever advocate needlessly violating a customer's privacy. On
the other hand, where circumstances are this peculiar, it's worth taking
a little time to see what other clues may point to either legitimate
ownership or illegal possession.
If it appears after examining all the facts that the items are so hot
they glow, you may want to utilize the "tip" statute in the federal
Right to Financial Privacy Act. Section 3403(c) allows a financial
institution to notify a Government authority (defined as any agency or
department of the United States, or any officer, employee, or agent
thereof)
that it has information which may be relevant to a possible violation of
any statute or regulation.
Please note that this tip statute would not allow you to turn over the
contents of the box. You can only divulge information, and even the
information itself is limited. The statute provides that you may
disclose only the name or other identifying information concerning any
individual, corporation, or account involved in and the nature of any
suspected illegal activity. Such information may be disclosed
notwithstanding any constitution, law, or regulation of any State or
political subdivision thereof to the contrary.
There is protection for you, if you confine your actions to what the
statute allows. It provides that any financial institution, or officer,
employee, or agent thereof, making a disclosure of information pursuant
to this subsection of the Right to Financial Privacy Act shall not be
liable to the customer under any law or regulation of the United States
or any constitution, law, or regulation of any State or political
subdivision thereof, for such disclosure or for any failure to notify
the customer of such disclosure.
You may also want to file a SAR. Looking at the instructions, you see
that filing is mandatory with violations aggregating $5,000 or more
where a suspect can be identified. This would appear to fit within
the guidelines for a circumstance where you believe the financial
institution was used to facilitate a criminal transaction. The criminal
transaction would appear to be concealing stolen property.
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