Thread Options
#1624802 - 11/04/11 08:09 PM SARs/Account Closure
Bee Cee Offline
Member
Joined: Oct 2010
Posts: 97
Our customer runs a small convenience store. As of late there has been an increase in cash activity, which is not typical of the anticipated account activity. In addition, the customer blatantly structures cash deposits. We have filed numerous SARs on this individual and have made the recommendation to close the account. The problem here is that they have a loan with the bank and asides from the Structuring and increase in cash deposits there are no other issues. e.g. loan payments made on time, never overdrawn, no adverse account activity, etc. Any suggestions on how to proceed from here? I would hate for the examiners to come in and see that we have filed multiple SARs on this customer yet did not close down the account.

“Chance favors only the mind that is prepared”. Louis Pasteur

Return to Top
BSA/AML/CIP/OFAC Forum
#1624812 - 11/04/11 08:18 PM Re: SARs/Account Closure Bee Cee
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,408
Cape Cod
I'd start with an understanding of what your policy (if any) says about closing accounts for recurring SAR filings. If you do have such a policy, you need to follow it. In the absence of policy, I'd recommend you determine what it costs to continue whatever extra monitoring/due diligence you do in order to keep the customer on your radar, analyze activity and file those quarterly SARs. Share that cost estimate with the appropriate people and let management make the decision on whether to close out the account. You already know to expect push back from your lending management.

If structuring is the only suspicious activity you see, and there's no apparent safety and soundness risk in maintaining the account relationship, I don't think you'll be challenged by examiners for keeping the account open if you've done your homework and documented it.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top
#1624856 - 11/04/11 09:07 PM Re: SARs/Account Closure John Burnett
Dolly Nugent Offline
Diamond Poster
Dolly Nugent
Joined: Nov 2000
Posts: 1,820
Southern California
Has anyone talked to the customer? It's possible that they are just ignorant about reporting requirements or has received bad information from someone.
_________________________
Dolly Nugent
CRCM
Opinions expressed are my own.

Return to Top
#1624896 - 11/05/11 01:38 AM Re: SARs/Account Closure Dolly Nugent
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,548
Galveston, TX
"Our customer runs a small convenience store. As of late there has been an increase in cash activity, which is not typical of the anticipated account activity."

Sounds like they have a bunch of eight liners in the back room and are operating an illegal gambling operation. That is usually a sure sign of such activity that I have seen in Texas. Do a site visit, see if they have video gaming machines. Even if labeled for amusement only, they usually pay under the counter.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#1624967 - 11/07/11 02:05 PM Re: SARs/Account Closure John Burnett
ACBbank Offline
Power Poster
ACBbank
Joined: Jul 2006
Posts: 3,990
New York City
Originally Posted By: John Burnett
If structuring is the only suspicious activity you see, and there's no apparent safety and soundness risk in maintaining the account relationship, I don't think you'll be challenged by examiners for keeping the account open if you've done your homework and documented it.


Agreed. I have never had an issued with keeping accounts accused of just structuring. However, you might want to perform a site visit per Randy's suggestion.
_________________________
"100 victories in 100 battles isnt the most skillful. Subduing the other's military w/o battle is the most skillful." Sun-Tzu

Return to Top
#1624970 - 11/07/11 02:14 PM Re: SARs/Account Closure ACBbank
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
That is the key. Feeling comfortable that they are "just structuring" and not structuring illegally obtained funds. The money has to make sense.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

Return to Top

Moderator:  Andy_Z