Oh my goodness how many problems do I have with this one. Local variety type, package store, lottery- what not shop. Cashes checks for patrons and the unbanked in the area. I recently became aware of this business when an employees personal check came back that he had cashed and I decided to monitor the deposits once I saw over $25,000.00 in checks come through in one day. When I pulled the actual checks I could not even believe it. Several checks made out to businesses some for over $3,500.00 (this one was marked "for deposit only" by the company it was made out to) Now here is my "bad" laundry list- please tell me if I am right and what to do.
1.) Bad branch, bad branch for not monitoring this customer
2.) Bad branch manager for not following banking 101-and telling her custommer that we do not cash business checks and he can't either and then deposit in my bank
3.) Bad business- (for deposit only) cashing a check at a variety store to avoid-what-taxes, liens, ex-wife?
4.) Bad business- SAR report-yes?
5.) Bad Branch- What the heck is going on here? Checks to one person over $1,000.00 per day, can you say MSB?
6.) Bad Bank-Where the heck has my BSA officer been on this?
Anything I missed?

Before I filed an SAR I would check to see whether or not they are registered with their state (if required) and with Fincen.

I would definitely follow Kaybee's advice for verifying state and federal licensing, AML program if MSB and risk warrants, etc., but more importantly I would want to discuss with management as to whether this business meets the bank's risk tolerance. As you have already noted, the basic banking risks are through the roof and you have not mentioned whether you have anything close to possible recourse in the event of returned items (such as thousands of dollars of returned items if those business checks are stolen, forgeries, counterfeit, etc.). We all know how fast a positve account balance can go negative in these type situations.

Not registered- he admitted to my branch manager he is just doing things the way his father did when he was alive and running the store. Innocent to the point of complete stupidity- I don't buy it. How about filing a SAR on the company who cashed the $3,700.00 check at his store? I have a gut feeling this account has got to go. He followed a recently hired branch manager that we hired from another bank-which is right next to his location and our bank is over 10 miles away- now I wonder why he would do that? All those years at a law firm is telling me this is very suspicious. My boss wants him out and any account like his and the branch manager is defending this customer big time. She told him to stop cashing checks over $1000.00 and no more business checks and he will be OK with us. The Branch MGR has never filed a CTR nor a SAR on this guy. I do not even have a risk tolerance that high in my assessment so I say close him and goodbye unless she babysits the account, but I do not have much confidence it that regard at this point.

It seems a SAR is warranted since he is not registered as a MSB. Then I would strongly recommend to senior management that the account be closed and also that senior management review the performance of the branch manager and BSA officer.
Good luck.

I have to agree with DevsFan.
I think is SAR is definitely needed on the unregistered check casher.
The account should be closed.
The new Manager needs a serious talking to.
I would review any other customer he/she has brought into the bank.
And I would also speak with the tellers who accepted these deposits and did not immediately bring them to your attention.
I would not file on the company that cashed a corporate check.
Yikes - doing it like my daddy did - Right!!

Thanks everyone- your insight and help is invaluable and I have taken all of your suggestions. Is it Amstel-Light time yet?

Had an MSB sighting recently. Cashing checks not their business but doing it for years. Called FINCEN, told to get person to file, get a copy of the form and wait 60 days and then call for the FINCEN confirmation. Told not to file a SAR, give customer benefit of the doubt. Put all in writing, esp. documenting call to the FINCEN man (FINCEN man told us to do this!). Customer sent form, so no SAR, for now. P.S. If they did it once, they must sign up, even if they say "I'll never do it again!

Quote:

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P.S. If they did it once, they must sign up, even if they say "I'll never do it again!

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This is not true - read the FinCEN Ruling 2005-3.

I quoted the Fincen man, However, to clarify, after a two year period (I think that is the number, I don't have to doc. in front of me). They do not need to reregister if they claim (and their activities show) they are no longer transacting MSB business.

I don't think rlcarey was questioning whether you quoted the FinCEN representative accurately, only the accuracy of what he told you. The ruling referenced was published very recently.