Thread Options
#1746832 - 10/04/12 08:08 PM Is this kiting?
BSAKeeper Offline
Junior Member
Joined: Aug 2007
Posts: 44
TN
A customer has admitted that he is writing checks on his account, taking them to a friend who owns a liquor store and receiving cash. The friend is instructed to hold the checks for a few days before depositing them.

In the meantime there are frequent deposits to the customer's account where deposits are either made up of cash, money orders, or cashier's checks. There are 3-5 different purchasers of the cashier's checks. The customer is also writing checks to the same people purchasing the cashier's checks.

There are times when the deposits stop, ususally resulting in an overdrawn balance for a while. Then the cycle begins again.

I have recommended the account be closed, but it is not going to happen. I know this is confusing, I am trying to determine if a SAR is warranted and if so, is kiting the correct choice.

I appreciate any help you can give.

Return to Top
BSA/AML/CIP/OFAC Forum
#1746867 - 10/04/12 08:48 PM Re: Is this kiting? BSAKeeper
BSALadies Offline
Junior Member
BSALadies
Joined: May 2012
Posts: 39
I would definetly be closing this customers account. It really is not traditional kiting, but sounds like a form of kiting. The customer obviously doesn't have the money and is floating it around between friends.

I would be filing the SAR explaining the full situation in the narrative. I think it would be ok to say kiting.

As for handling the account, I don't understand why you would keep it open. If you do then I would recommend putting holds on all deposits made. Have any of the checks that he has written to his friend at the liquor store been returned?

Return to Top
#1746875 - 10/04/12 08:56 PM Re: Is this kiting? BSAKeeper
arye23 Offline
Gold Star
Joined: Mar 2011
Posts: 294
Make sure you document your recommendation for closure and any reasons management gives to keep it open. Our examiners have asked why an account with suspected illegal or suspicious activity is allowed to remain open.
_________________________
CRCM

Return to Top
#1746901 - 10/04/12 09:59 PM Re: Is this kiting? BSAKeeper
BrendaC Offline
Power Poster
BrendaC
Joined: Sep 2001
Posts: 6,029
Sweet Home AL
I would call that kiting and I would file a SAR. As previously noted, document clearly if you decide not to file.
_________________________
Life without Jesus is like an unsharpened pencil - it has no point.

Return to Top

Moderator:  Andy_Z