We have a business customer who has been on deposit for six months. He comes in once a week with a deposit, (several checks made payable to business) amount varies, and then writes a check for exactly the amount he just deposited for cash. The bank of course makes him deposit the checks, but then lets him write a check for cash (we don't do this for anyone else); I found out that the reason he is allowed to do this is because his business is in the middle of a BK and he owes money to EVERYBODY and doesn't want to carry a balance. Knowing this, should we file a SAR?

Why would you let him draw against funds that you don't know are good without an offsetting balance? If one comes back and he has no balance, you're stuck. If he owes everyone else in town, you may be next.

No sar required in this case.

Why would the bank - what appears to be - knowingly allow him to 'hide' his income from the BK court? Especially when you say that you don't do this for any other customer? So, no SAR on the customer, - he is doing this with your knowledge and permission, or so it seems?