I have a question that I hope y'all can help me with.
Recently, the FBI & some other federal law enforcement agencies contacted our bank regarding a new customer of ours. From what we know so far, the customer only had a safety deposit box at one of our branches.
These law enforcement agents obtained a search warrant and the permission of our customer to search her safety deposit box.
They showed up at the bank with our customer in custody and met our attorney with the warrant. They obtained permission from our attorney to remove the box from the premised to conduct their search off-site. (Apparently they wanted their drug dog to be present during the search).
They returned the box to the bank empty, that same day.
Later we heard (through the “Grape-vine”) that they seized around very large sum of cash from the box. The “Grape-Vine”-apparently a local law enforcement employee, unofficially told our auditor that the suspect admitted that she was holding the illegal cash for a known drug dealer. Of course this “Grape-vine” information is not (official) but somewhat reliable.

Anyway, my question is: Is the bank required to file a SAR?
Law enforcement alerted us to this and our customer apparently has not conducted any transactions at the bank (other than placing the money in the box) that would be considered suspicious.
Due to the fact that obviously law enforcement already knows what our customer did and has her in custody and is conducting their investigation to go after the bigger fish, would this activity require the filing of a SAR on the bank’s part?

If a bank finds activity that pulls one of the SAR filing triggers it must file a SAR. That is true even if its customer has already been arrested, indicted, tried, or even convicted at the time the activity is discovered.

However, as I understand it, your bank has yet to discover any suspicious activity; i.e. a thorough review of your records and discussions with your personnel would reveal nothing other than your interactions with law enforcement. Accordingly, your SAR would pretty much read like your post except the details would be more specific.

I do not think a SAR filing is required, but it is likely there will be other opinions.

I agree with Ken. After you're done poring over your records related to this customer, decide whether you found anything suspicious in that search. If yes, and if it meets the SAR-filing threshold, exercise your creative writing skills.

If you don't find anything suspicious in that research, document the search and your decision not to file a SAR.

I'm on board with Ken and John. If there was no suspicious activity in your FI, don't file an SAR.

Great advice
Thank you both!