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#1205397 - 06/22/09 06:42 PM
Employee theft
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100 Club
Joined: Oct 2005
Posts: 138
Alabama
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Any advice? We have uncovered an employee stealing money. We are going to file a SAR and the employee has been terminated. I am receiving conflicting advice from different regulatory agencies. One regulator instructed us to also contact local law enforcement. Another regulator said it is not necessary to inform local law, as we are filing the SAR. Any advice?
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#1205445 - 06/22/09 07:15 PM
Re: Employee theft
bls
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Platinum Poster
Joined: Sep 2005
Posts: 590
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Is the bank planning to prosecute?
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CRCM, CLBB
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#1205451 - 06/22/09 07:17 PM
Re: Employee theft
Skyline
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Diamond Poster
Joined: Mar 2007
Posts: 2,108
gone fishin'
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My concern would be that other Banks can't check the SAR database - but they do run background checks on employees.
If you don't file a report with Law Enforcement, this employee could work & potentially steal from another bank.
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My opinions are my own, and not that of my employer.
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#1205514 - 06/22/09 08:03 PM
Re: Employee theft
WonderWoman
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100 Club
Joined: Oct 2005
Posts: 138
Alabama
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We would prefer not to prosecute, due to reputational risk, but will do whatever is required by law and regulation.
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#1205741 - 06/23/09 01:08 PM
Re: Employee theft
WonderWoman
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Diamond Poster
Joined: May 2004
Posts: 1,475
Big Brother knows and that's a...
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My concern would be that other Banks can't check the SAR database - but they do run background checks on employees.
If you don't file a report with Law Enforcement, this employee could work & potentially steal from another bank. In some states just because there has been an arrest noted in a background check...doesn't mean that you can use that as a reason to not hire someone. I do know in some states if you are going to base your determination on whether or not to hire someone based on information you find in a background check, there needs to be a conviction for the crime. You can't solely base your decision on an arrest. Again...this is in some states, not all.
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My opinion is mine only- not my employer's!
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#1205798 - 06/23/09 01:53 PM
Re: Employee theft
J2C
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10K Club
Joined: Nov 2000
Posts: 18,765
Central City, NE
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Related topic: [b]Notification to the Bonding Company[b] The FDIC has a mutual interest with management of each insured bank to be certain that all of a bank's employees are protected by a fidelity bond. When a bank files a SAR involving an employee, it normally will be required to notify its fidelity insurer of the subject activity. However, a bank may not provide a copy of the SAR to the insurer.
The notification requirement is usually among the terms of the insurance contract and is not dependent upon the filing of a claim against the insurance coverage. The standard financial institutions bond contains a termination clause which automatically cancels coverage of any employee as soon as there is knowledge of any dishonest or fraudulent act on the part of such employee. The insurer need not give notice of such termination; in fact, the decision of the insurer may be made at a subsequent date. In the rare case in which a bank official has knowledge of a suspicious act on the part of an employee and yet the bank wishes to continue to employ that person, it is very important for the bank to obtain either an assurance in writing from the main office (agents generally are not so empowered) of the insurer that such person is still covered under the bond, or a new bond covering that person. Also refer to the Fidelity and Other Indemnity Protection section of the Manual. You can find the entire guidance here: http://www.fdic.gov/regulations/safety/manual/section10-1.html
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#1206049 - 06/23/09 04:33 PM
Re: Employee theft
David Dickinson
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100 Club
Joined: Oct 2005
Posts: 138
Alabama
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In reviewing the insurance, it appears that we only need to notify if the amount involved is more than one-half of our deductible, which this amount clearly is not. I do understand the desire to let law enforcement know, as it is a crime and how would other potential employers know about it unless law enforcement is notified. However, is it required is the question. A SAR will be filed, but it appears thus far that notifying law enforcement is not required.
Also, we have terminated the employee, which I believe was required by Section 19 of the Federal Deposit Insurance Act. I do not believe we had a choice, but even if we did, we would have terminated the employee anyway. The employee was in a position of trust, and that trust was broken.
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#1207020 - 06/24/09 05:58 PM
Re: Employee theft
bls
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Gold Star
Joined: Apr 2006
Posts: 260
MS
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We contact our regulator and also the FBI.
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