If neither the bank nor the customer sustained a loss in a fraud activity, is a SAR required if the Bank knows the suspect and the suspicious activity involves $5,000 or more? In other words, is it a correct understanding that whether the bank or customer sustains a loss is not a factor in determining if a SAR is required to be filed?

A loss by any party has nothing to do with SAR reporting.

Amsouth paid $40 million to learn what Kaybee just told you for free.

...some personnel operated under the misapprehension that suspicious activity reports were not required to be filed unless there was a loss to the bank...

I still pull the Amsouth order out. I also use the Amex one for discussions on untimely investigations leading to untimely SARs.