John Doe has businesses outside of our market, i.e. way at the other end of our state. (We are a community bank). Doe wants to establish business dealings here. Big talk about purchasing several businesses; in some cases he's put down considerable CASH for a downpayment. Deposited six figs with us in initial deposit to checking. Wants loans. ran name in internet. hair raised on back of neck but we can't tell if its the same person...but are 75%+ sure. We don't want to come right out and ask: gee, we did our due diligence and your name came up on the interet associated with XYZ issues....so, we think we should file a SAR as he is throwing large amounts of cash around (saif he sold businesses). For very obvious reasons (to us) we can't get a true picture of the guy, i.e. legit businessman or front for money laundering...all this being said, we feel we should file a SAr...to the effect that we cannot determine the source of the large amounts of cash the customer has/expects to put down. The bgusinesses he is purchasing are wide spread, i.e. not all the same, such as restos....wants to establish an entertainment business that just screams gambling, money-laundering, etc. Need help in the SAR narrative....HELP!!!

I would file the SAR and give all the information you have, even if it isn't "complete". Other banks in your area probably are doing the same on John Doe - you are probably not the only bank he is looking into. FinCen will put all the information together so that the picture becomes complete. Examiners will like that you did your due diligence - whether it is wrong or not.

Tree, I dont see any problem with asking your customer about your concerns. Im not advocating accussing him of illegal activity, but a simply inquiry might be able to address your concerns. If the customer gets offended or wont answer your questions, then you will know that there could be a problem.

If anything, that should be part of your KYC. If your not sure of who your customer is, why would you do business with him/her?

Legitimate questions are where are you banking now and are you changing? Do you subscribe to Accurint? Always a good source of info. If you have info about poential involvement in nefarious activites, you may want to consider back channel commo with LE contacts.

If this guy is looking for loans, would your lenders not want to know that he's on the up and up? Wouldn't they need assurances that whatever it is they are financing isn't dirty? You should be doing some of that due diligence in your account opening process, and your concerns about large cash amounts should encourage you to extend that due diligence. If you have come up with negative hits on the Internet, you need to reconcile them with what you're being told by the customer. If that means you have to ask uncomfortable questions, so be it.

Would you rather risk ticking this guy off or explaining your bank's involvement in illicit enterprises to a grand jury or your regulator a couple of years from now?

Personally, I'd rather he leave. We expect to dig very deep with this one. I still want to file a SAR, its just a questions of the text as much of it will be heresay; that is, we do not have concrete proof to give that he made the purchases with lots of cash....jus the word of the broker helping him.

The information in your SAR narrative doesn't have to stand up to the rules of evidence. As long as you explain that you got that information from a third party (identify him or her, please), you let the LE folks determine whether it's useful.

I received a PM from a banker about potential narrative. Would any of you like to tackle that as well? Also, what is the reason, i/e/ other. I can't see using bank Secrecy. i always have to remember that maybe, just maybe, this guy is legit....

Well said John. Remember, Banks are not investigating potential illegal activity. That is the role of law enforcement. Banks are reporting activity which appears to be suspicious.