Our bank received a claim from a customer that a check on his/her account was altered. Please note that the check is over the filing requirement of $5,000.00. Our bank returns the check to the bank that originally accepted the item. Who is responsible for the filing of a SAR? The bank that accepted the check and is taking the loss, the bank in which the check was drawn (who is not taking the loss), or both?

I'm not so sure who would be responsible for filing in this case. However, I'm also not sure if you have a suspect in this case from your post. If not, then the reporting threshold is $25,000 not $5,000 and the point is moot.

If you do know who made the alteration, then you might as well file. It doesn't take long and it won't hurt so long as you don't tell the customer or the suspect. It might also be a good idea to suggest that the customer contact police and start a case.

(After a little research, I found that you are required to file if you suspect that your institution was even involved in facilitating in the suspicious activity--which means you do have to file if the threshold is met)

The check meets the threshold.

Would this mean that every altered check that was attempted to post to our bank's accounts would need a SAR if it met the threshold. Positive Pay would catch them if a client used the service and the check would be returned. You're saying that if our insitution was utilized to facilitate the crime, we would have to file on every altered check that met the thresholds.

I disagree. We returned the check to the bank that cashed it. They would be the bank that facilitated the crime; therefore, they would be responsible for filing.

The only reason I say your institution may have been involved in facilitating the activity is that the account is held at your institution. It's nitpicky, I know, and I can definately respect disagreement. It may be more appropriate to just file a report with the police (or at least suggest that the customer do so). Anyway, here is the verbage from FinCEN I was looking at when I posted last:

"where the financial institution believes that it was either an actual or potential victim of a criminal violation, or series of criminal violations, or that the financial institution was used to facilitate a criminal transaction "

Folks:

Agreements or disagreements aside, someone has to file a SAR on this type of document if all conditions are met. The simplest way to handle this is to discuss the issue with a qualified representative of the other institution and decide who will file the SAR -- not how many SARs to file.

The key concept here is:
If other filing requirements have been met and the institution has been a potential or intended victim, if its operations have been used to facilitate the crime -- or if it had been used as a conduit for the flow of illegal funds -- someone MUST file the SAR.