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#349626 - 04/21/05 03:45 PM SARs on unregistered MSB
Jaybird Offline
New Poster
Joined: Feb 2005
Posts: 4
Atlanta, GA
I'm uncertain of the proper manner for reporting an unregistered MSB in a SAR.

In reviewing transaction activity, we have identified suspects and then have looked over three months of transaction activity which confirmed they are MSBs. Is the correct reporting method as follows? Identify three month period, the amount as sum of debits and credits, then break down the amounts as best I can in the narrative. Or is the correct reporting to be done in some other manner.

Any help in clarifying this for me will be much appreciated!
_________________________
Jay Postma, CAMS
President
MSB Compliance, Inc.
www.MSBComplianceInc.com
www.MoneyServicesBusiness.com

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#349627 - 04/22/05 02:59 PM Re: SARs on unregistered MSB
jerry Offline
New Poster
Joined: Aug 2004
Posts: 10
Would suggest that instead of concentrating on the money moved, the narrative provide background as to the type of customer using the service. Also provide any details of your investigation to date including all required information on the owners of the business. The aim is to make the SAR as informative as possible to the reviewer at a law enforcement agency.

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#349628 - 04/22/05 04:35 PM Re: SARs on unregistered MSB
Czargazer Offline
Gold Star
Czargazer
Joined: May 2003
Posts: 298
Pacific Northwest
Actually, before you file an SAR, I'd ask if you've contacted these companies regarding their activity (not sure if you have from your post). A lot of people out there don't know that they are required to follow the regs, and even fewer know about the state laws that govern check cashing businesses and the like.

So I'd recommend giving your customers a chance to reconcile and make things right before you file a report on them. We usually give them 7 business days from when we contact them to respond to us with a plan of action, or appropriate documentation, and if they don't we close the account within a couple weeks and file a SAR.
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Everyone has to make a living, mine just happens to involve thumbscrews.

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#349629 - 04/22/05 07:04 PM Re: SARs on unregistered MSB
BrendaC Offline
Power Poster
BrendaC
Joined: Sep 2001
Posts: 6,029
Sweet Home AL
We also need to MAKE SURE that we are not just asking for evidence of registration. That is such a small part of what they have to do. We need to make it clear up front that we are looking for evidence of registration (if applicable), a copy of their AML program, the name of their compliance officer and the name of the person/company that will be conducting their independent audit. Then we'll follow up to make sure the program is real (through observation, discussions with employees/management, etc.). This discussion often sheds a totally different light on the whole issue.
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Life without Jesus is like an unsharpened pencil - it has no point.

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#349630 - 04/22/05 10:47 PM Re: SARs on unregistered MSB
Anonymous
Unregistered

I am waivering between filing and not on a family-run corner store. the account activity appears to indicate check cashing (deposit of third-party checks followed by withdrawals for similar amounts). I reviewed the checks deposited and found one occasion where the store accepted a check for over $1,000 (student loan check). the total deposit was followed by a withdrawal for a similar amount. In addition I found three other checks for over $1,000 payable to different family members of the store owner. these deposits were not followed by withdrawals. In total there was $5,000 in three months of checks over $1,000 deposited (only one followed by withdrawal). Do I have to file? Please Help!

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#349631 - 04/25/05 02:58 PM Re: SARs on unregistered MSB
BrendaC Offline
Power Poster
BrendaC
Joined: Sep 2001
Posts: 6,029
Sweet Home AL
I would meet with the customer, hand them the MSB guide (from msb.gov, you can print one or order the actual booklets) and strongly encourage them to read it carefully. I would then inquire as to whether they planned to offer check cashing services over $1,000 to any one person on any one business day. If so, I would set a deadline for them to furnish proof of info needed (MSB registration letter of acknowledgement, AML program, etc.). If they indicated that it was not their intention to function as a money service business, I would ask them to document that to me in writing and let them know that everything is great. I would also explain that we'll be performing periodic reviews of the account, as required by our federal regulators. If they change their mind down the road, it's important to let us know.

If the customer indicates that they are not going to offer check cashing services like this any longer, but you find they are still offering the service, I would file a SAR. If they indicate they plan to continue the activity, but not register, I would file a SAR. And in either case, I would close the account.
_________________________
Life without Jesus is like an unsharpened pencil - it has no point.

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