It’s me again…
Our SAR Committee chairman (legal counsel) is arguing with me relative to filing based on a customer’s inconsistent statement.
Here’s an example of the situation.
Customer #1 tells bank employee that they do not want their cash transactions to be tied back to them and commences to conduct a cash withdrawal from their account and physically hands the money to another person that is there with them. That person #2 immediately deposits the cash into their account at the same bank bank. When customer #2 is asked by bank employee what they were doing, customer #2 says they borrowed the money and was going to pay customer #1 back. Later, (after monitoring the account activities, it was discovered that customer #2 subsequently began making internet purchases of art and antiques for the first (#1) person, shortly after the deposit.
Further deposits and internet purchased continues. Finally, bank employee asks customer #2 what they were doing. Customer #2 say the Customer #1 is addicted to internet art and antiques and wanted customer #2 to make the purchased for him.
Additionally, there was no evidence that customer #2 paid back customer #1, at least from the account involved. All deposits were used to conduct internet purchases.
Normally, cash deposit transactions and internet purchases would not be identified as an attempt to launder money. Although, the activity appeared to be “unusual for the customer and not the type of transaction normally expected” the customer did give a reasonable explanation. So, our “counsel” says that regardless of the customer’s (#1) original statement that he didn’t want the transaction to be tied back to him, his and #2’s subsequent actions and “reasonable explanation” do not warrant suspicion.
So, I’m stumped.
Are banks expected to file based on customer’s inconsistent comments which may be followed by activities normally not considered suspicious relative to the statement made and the fact an explanation was given?
IMO, the “reasonableness” of the explanation is subjective and in the eye-of-the-beholder.
Our committee agrees that the explanation is reasonable. I think it’s garbage and something else is going on here. However, I have no evidence and don’t have a leg to stand on in defense of my opinion. Consequently, I (the BSA Office) is over-ruled by the SAR Committee and Chairman.
Any thoughts on this?
You aren't in the business of finding a crime unless it is clearly evident. Even then you can't make the assumption. However, you are in the business of identifying suspicious activity. The inconsistencies in the stories and transactions is suspicious and IMO warrants a filing especially if it is meeting the dollar threholds for mandatory filing.