Our former COO who was also the BSA officer seems to have misplaced our copies of all CTRs/SARs filed in 2004. I say former because she left about a month ago. I say seems because everytime I've contacted her regarding the location of the CTRs/SARs she gives me a different answer.

We have looked in every office/store room/cubicle in every branch of my institution and have been unable to find them. I can only assume that she either misplaced them and doesn't want to admit it or she did file them last year.

Anyway- the accounting firm that conducts our internal audit has asked for them 3 times... twice before she left.

I really have no way to reproduce the CTRs copies. So here is my question...

Has anyone else been in this situation?
Can we contact the IRS to request copies of the 2004 CTRs/ SARs?

We are scheduled for our NCUA audit in September and this BSA is a huge issue for the NCUA this year.

ANY suggestions information etc. would be helpful. For those of you that read/replied to my "Stickey Situation" post in the Couch this is the reason that I was worried about becoming the BSA officer!

Click Here for information about obtaining CTR copies from FinCEN/IRS.

Three scenarios come to mind: (1) The CTRs were filed, and no copy was kept; (2) The CTRs were filed, and the copies are, indeed, lost; and (3) The CTRs were never filed. Scenarios 1 and 2 are two shades of the same hue; scenario #3 is the one you're scared about.

You won't know how deep this manure pile is unless you find out if FinCEN can help you. But keep trying to pry information out of your former COO in the meantime.

And good luck.

Not sure of your staff size, but can you recreate the years work from paper reports so that you have a handle on what is missing, before you go to an outside source.

My next step would be to write to the IRS, but the response time is usually months before you can expect an answer on this issue. But detail the facts as you know from your research and ask for support with whether the reports were filed or if they need to be filed. They should be able to offer an opinion.

Finally, I say at some point the auditors-examiners need to be informed. If they see a proactive approach to resolving this issue, they know that someone is in charge now who will correct the situation and not let it occur in the future.

But I guarantee that your exam will be heavily focused on BSA and the rest of the program better be in shape.

I must agree with the previous postings in regards to reconstruction and reporting.

While this is not a cash transaction, completing an SAR will identify the associated facts for FinCEN WHEN they come looking for their paperwork. Monetary and/or criminal sanctions may be enforced on both the company and individual responsible for the documentation. Since it appears that you are the new BSA Compliance Officer, a proactive approach will help to aleviate any sanctions placed on the company.

Be sure to maintain contact information for your previous COO.

Good Luck.

Quote:

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...completing an SAR will identify the associated facts for FinCEN WHEN they come looking for their paperwork.

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In suggesting that the credit union file a SAR because it cannot locate copies of CTRs, you feel it should accuse a former employee and thereby itself of intentionally avoiding the requirements of the Bank Secrecy Act? This should be done prior to determining whether it has a filing or a record retention problem? Will there be any snacks at the hemlock party?

kbuck,
Your auditors are already involved. Respond to that third query, fess up and ask for guidance - they are supposed to be on your side, but if you keep stalling your will look as guilty as your predecessor. As John noted, only FinCEN can tell you which of the three problems he listed that you have. The auditors may ask your regulatory agency to assist them in obtaining a list of CTRs that FinCEN received so you will know for sure whether you have a record retention or a filing problem. You cannot fashion a remedy until you know the answer to that question.

I'll join Ken in his look of amazement. I was just struck with a thought (it may be the last witty thing I think of today, so please hear me out): Defensive filing of SARs has become the banking equivalent of the physician's kneejerk prescription of broad-based antibiotics for any unknown malady.

There is strong evidence suggesting that overreliance on antibiotics could result in development of stronger, drug-resistant, strains of the microbes that make us sick. Defensive SAR filing, particularly when there is, as yet, no evidence that rises to a suspicious level, could result in another round of the industry's being accused of "malicious compliance" with the SAR rules.

If you determine from your inquiries of FinCEN that there's enough evidence of a knowing avoidance of the filing requirements, then you'll have plenty of time to file that SAR.

I absolutely agree. We give serious consideration to all sides before we file a SAR. If in the end (after an expediitious investigation) you do determine that there was some deliberate action here, then filing would absolutely be appropriate.

This is one of those times when you should consider expert assistance.

If NCUA concludes that there have been serious violations of BSA, SEVERE action can ensue. Remember that the penalties can be imposed on individuals, as well as your CU. Individuals face up to 20 years in prison, and your CU could lose its deposit insurance, i.e.-the death penalty.

I would consider engaging a capable attorney (BSA expert) to conduct an independent and objective investigation of the facts. This insulates current staff from allegations of cover-up and mainstreams the findings and recommendations to your management. Work product should be shielded from government view unless you decide that disclosure is in the best interest. Having conducted the investigation, this person would then be in the best position to represent you in any formal proceeding.

Remember: the fire trucks dash to the scene just as fast for a false alarm as the real thing because the potential damage is the same. No one complains when they get to make a U-turn and go back to the station.

Thank you all for your replies. I just wanted to update you. Last week I spoke to our CEO once again regarding the lost CTRs. I even forwarded the voicemails that I saved from the former COO. My CEO placed a call the former COO.

A few days later the facilites manager calls me and tells that he thinks that he may have found the CTRs in store room. I immediately go to this store room and lo and behold the CTRs have miraculously appeared. We both looked in this store room a few weeks prior with no luck. The really weird thing is that he said that he found them on the shelf of a bookcase buried beneath Christmas decorations and he thought that maybe someone placed them there during the holidays. The folder that the CTRs are kept in was extremely clean to have been buried for almost 4 months.

I guess it really doesn't matter since the CTRs were found but I would like to know how they ended up in a store room.