SAR, Suspicious Activity Reports, Bank Secrecy Act


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The number of SARs filed has steadily risen each year, from 49,786 in 1996 to 120,506 in 1999. Through the end of August, 100,353 SARs had been filed in 2000.

California leads the way in SAR filings by a significant margin, with 27,354 for the first eight months of 2000. New York follows with 11,710 for the same period. The next five states, in order, are Florida, Texas, Illinois, Arizona, and Pennsylvania.

In terms of the type of suspicious activity reported, BSA/Structuring/Money Laundering ranks highest, constituting 45.3% of all SAR filings since 1996, followed by check fraud, 13.15%. Among other types of suspicious activity reported in significant numbers are counterfeit checks, defalcation/embezzlement, credit card fraud, check kiting, false statements, consumer loan fraud and mortgage loan fraud.

National banks have filed far more SARs than their state-chartered counterparts. Thus far in 2000, institutions with the OCC as their primary regulator filed 59,299 SARS, while those who have the Federal Reserve or FDIC as their primary federal regulator have filed a combined total of 24,608.

In terms of trends spotted in SARs filed in 2000, the report notes l) several complexes of activity involving suspicious wire transfer patterns; 2) possible reflections of Russian criminal activity; 3) increased SAR reporting involving Mexico; and 4) a continuing trend in suspicious transactions in which funds are wired to/through a U.S. financial institution from a foreign source and then withdrawn in cash in a third country using ATMs.

Guidance was given on four additional issues:
1. organizations should report continuing suspicious activity with a report being filed at least every 90 days;
2. whether an account should be closed as the result of the identification of suspicious activity is a determination the institution should make, but just because an SAR has been filed, that should not be the basis, by itself, for terminating a customer relationship. Confer with counsel and senior staff to make a decision about closing an account;
3. An SAR must be filed no more than 30 calendar days from the date of detection of the suspicious activity unless a suspect cannot be identified, in which case the time period is extended to 60 days. The time period begins to run when the institution reaches the point where it knows, or has reason to suspect, that the activity or transactions meet the reporting standards;
4. The law prohibits the notification of any person that is involved in the activity being reported on a SAR that the activity has been reported. If an organization receives a subpoena or court order seeking a SAR, it should contact its primary supervisor and FinCEN for direction and guidance.

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