Money Services Businesses: SARs filed by MSBs

On January 1, 2002, certain MSBs became subject to the suspicious activity reporting requirement under the BSA. The rule requires that money transmitters, and issuers, sellers, and redeemers of money orders and traveler's checks report suspicious activity occurring on or after January 1, 2002.

FinCEN has developed a form to be used solely by money transmitters and issuers, sellers, and redeemers of money orders and traveler's checks to report suspicious transactions. That proposed form, the Suspicious Activity Report-MSB, (SAR-MSB) was published in the Federal Register on February 27, 2002 for public comment. The final draft was published on July 25, 2002, and is awaiting OMB approval. The form is expected to be in use by October 2002; FinCEN will provide a public announcement of the exact date. In the meantime, money transmitters, and issuers, sellers, and redeemers of money orders and traveler's checks are using the existing bank suspicious activity report, Form TD F 90-22.47, to report suspicious activity. Because the current bank SAR form is not tailored to meet the unique requirements of those MSBs required to report, relevant information about the nature of the filer's business cannot be determined.

During the period January 1 through March 26, 2002, a total of 3,914 SAR-MSB filings were made by 311 separate entities. It should be noted that in 67 instances, the name of the branch/filer was left blank; these 67 instances are not included in the 311 named MSBs. More than 46% of the SAR-MSB filings were made by five (5) MSBs.

Violation amounts ranged from $0 to $224 million. The following table identifies the range of the violation amounts as reported in the SAR-MSB filings:

(*1,099 SAR-MSB filings fall into the $2,000-$2,999 range)

The SAR-MSB filings were filed from 45 states as well as from the District of Columbia, Guam, Puerto Rico, Canada, Dominican Republic and a U.S. Navy Exchange in Japan. However, 1,664 of these SAR-MSB filings (42.4%) do not indicate the state in which they were filed, in either the branch or filer fields. A total of 488 of the MSB-SAR filings (12.4%) were referred directly to law enforcement.

The following table identifies the top five states from which MSB-SARs were filed [based on the remaining 2,259 SAR-MSB filings (57.6%)]:


In 118 instances, no suspect was identified on the MSB-SAR filing. One (1) MSB failed to identify the suspect name in 82 of its 85 filings, while another MSB failed to identify the suspect name in 12 of its 15 filings. Another MSB failed to identify a city, street, or state in each of the branch or filer fields.

FinCEN is engaged in a public outreach program and improvements in SAR filings by MSBs are expected.

Excerpted from SAR Activity Review Issue 4, page 33