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#360472 - 05/17/05 09:09 PM SAR Extension?
Anonymous
Unregistered

Has anyone here tried to get an extension of their timeframe for filing a SAR?

We have a customer for whom we have been filed a subpoena by the FBI and we need to research the customer's approximately 30 accounts to determine whether to file a SAR, in addition to researching the 95 hits from our newly installed AML software and we just don't have the resources to complete all necessary investigation within the required 30 days.

Has anyone tried to contact FDIC to find out if it is possible to get a SAR extension?

Help!

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#360473 - 05/17/05 09:16 PM Re: SAR Extension?
Anonymous
Unregistered

If the FBI is already on it, why do you need to file an SAR? The purpose of SARs is to alert the authorities about suspicious activity. Looks like they are ahead of you. IMO, you don't need to file one.

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#360474 - 05/17/05 09:23 PM Re: SAR Extension?
starfish Offline
Gold Star
starfish
Joined: Jun 2003
Posts: 416
Seattle
I'm going to disagree. I would definitely file a SAR if you determine that one is warranted. First, you want to check to see if there is some information that you should have filed a SAR on...and just because the FBI has information, you probably have a lot of documentation that will help them piece together the situation. If you have knowledge of suspicious activity, and you do not report it, it will be a very ugly situation! As far as the timing goes, I would definitely contact your regulator. I believe the reg states that you have 30 days to file after discovering the suspicious activity, so this may give you some extra time.

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#360475 - 05/17/05 11:11 PM Re: SAR Extension?
berico Offline
Gold Star
Joined: Jun 2004
Posts: 290
California
Remember, the reg says 30 days after discovering something suspicious. That doesn't mean you have to wait until your investigation is done. File the SAR, and if you come up with additional information after the investigation is complete, you can file an addendum.

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#360476 - 05/17/05 11:40 PM Re: SAR Extension?
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
There is no provision for extensions. In addition, SAR filing is required by Treasury regulations as well as FDIC regulations - the FDIC cannot excuse the omission.

Your responsibility to file a SAR is not conditioned on whether law enforcement is aware of the activity. You file it because the law requires you to - even if the customer has just been indicted on 23 counts.

The 30 days did not begin to run when you got the subpoena from the FBI. It begins to run when reach your own conclusion that the activity in your own records is suspicious. From the BSA FAQ's:

It may be appropriate for organizations to conduct a review of the activity to determine whether a need exists to file a SAR. The fact that a review of customer activity or transactions is determined to be necessary is not necessarily indicative of the need to file a SAR, even if a reasonable review of the activity or transactions might take an extended period of time. The time to file a SAR starts when the organization, in the course of its review or on account of other factors, reaches the position in which it knows, or has reason to suspect, that the activity or transactions under review meets one or more of the definitions of suspicious activity.

They don't want a hair trigger SAR filing, they want it to be complete. However, if there is any question about the time it took you to amass the information and file the report, any reviewer is going to ask for some records on the amount of time spent working on the filing every day - they will not accept an unsupported conclusion that you just didn't have time.

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#360477 - 05/17/05 11:41 PM Re: SAR Extension?
Anonymous
Unregistered

How do you know it is truly suspicious until you have finished your investigation? A subpoena doesn't automatically mean you have to file, you may not find anything suspicious on the account. IMO the 30 day period doesn't start until you have finished the investigation. If an investigation really takes 30 days to complete then I don't think anyone can criticize you for filing the SAR on the 31st day...and if they do they are wrong.

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#360478 - 05/18/05 12:21 AM Re: SAR Extension?
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,293
This investigation needs to be moved to the top of the pile immediately. It is more important than the hits from the new AML software. You have knowledge that something is most likely going on...its is not a subpoena for child support.

Regarding not filing because law enforcement already knows...read AmSouth. That opinion helped get them into a lot of trouble.

As already pointed out, FINCEN's view is that the 30 days starts from when you determine the activity is suspicious, but you are expected to move expeditiously toward that determination. Just being busy won't help your case, unfortunately.
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#360479 - 05/19/05 10:12 PM Re: SAR Extension?
Anonymous
Unregistered

We received a subpoena recently on a customer, possibly a securities fraud investigation. We did not have any reason to suspect any wrongdoing. The nature of his transactions appeared consistent with his line of work. Since, we are now alerted via the sobpoena, are we required to file an SAR? The only thing that made us suspicious was the subpoena.

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#360480 - 05/19/05 10:29 PM Re: SAR Extension?
starfish Offline
Gold Star
starfish
Joined: Jun 2003
Posts: 416
Seattle
You should go back and review your accounts for any suspicious activity on this customer. If you find supscious activity, you should file a SAR. If you cannot any suspicious activity, do not file a SAR.

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#360481 - 05/20/05 09:34 AM Re: SAR Extension?
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Anon 366623, as Starfish noted, you did exactly what you were supposed to do. Receipt of a subpoena should trigger an evaluation of customer activity. However, if your investigation turns up nothing, you do not file.
_________________________
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

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#360482 - 05/23/05 02:13 PM Re: SAR Extension?
Anonymous
Unregistered

"If the FBI is already on it, why do you need to file an SAR? The purpose of SARs is to alert the authorities about suspicious activity. Looks like they are ahead of you. IMO, you don't need to file one."

Would a $50 million fine change your mind? I think that is one of the things that AmSouth got in trouble for.

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