During a recent BSA Exam, we were cited for not filing a SAR on a customer that made a SINGLE large cash deposit over $10,000.

Does this part of the regulation require that we file an automatic SAR on anyone that makes a $5,000 or more cash transaction that they don’t normally conduct, and we have no reasonable explanation for the transaction?

•Transactions conducted or attempted by, at, or through the bank (or an affiliate) and aggregating $5,000 or more, if the bank or affiliate knows, suspects, or has reason to suspect that the transaction:
---May involve potential money laundering or other illegal activity (e.g., terrorism financing).
---Is designed to evade the BSA or its implementing regulations.54
---HAS NO BUSINESS OR APPARENT LAWFUL PURPOSE OR IS NOT THE TYPE OF TRANSACTION THAT THE PARTICULAR CUSTOMER WOULD NORMALLY BE EXPECTED TO ENGAGE IN, and the BANK KNOWS OF NO REASONABLE EXPLANATION FOR THE TRANSACTION after examining the available facts, including the background and possible purpose of the transaction.

What made the examiner(s) think that a SAR should have been filed? I can tell you that we do not file a SAR just because a customer for the first time deposits, for example, $15,000 cash.

Banks file a CTR for a single deposit exceeding $10K, but a SAR filing requires a lot more. "The rest of the story" is critical here.

I have seen this tactic before, mainly from the OCC.

All I can say is push back hard. I mean all the way to Washington if you have too. I know one bank that agreed to that tactic and found they were filing an extra 1000 SARs a year. They were not a small bank. They had some other issues and decided not to fight.

Unless there is something else suspicious going on, a one time cash deposit is not suspicious.

Randy taught me a long time ago there's a difference between "unusual" and "suspicious". A transaction can be unusual, but not suspicious. I would definitely push back on being told that you 'have' to file on this kind of transaction.

Exactly. There could be any number of legitimate or illegitimate reasons for someone to make a large deposit of currency in excess of $10,000. At times like this a simple call to the customer can eliminate a lot of brain damage.

How about a single $50,000 cash deposit? Customer is a state worker. She did not reveal the source of funds so we have no reasonable explanation for the transaction.

The customer has no history of prior large cash deposits. We did not find the transaction suspicious, therefore no SAR filed.

Okay, I think 50K from a person who does not get paid that much at a pop and does not get paid in cash in any amount constitutes "the rest of the story." In that situation, I think the bank either had to exercise some due diligence and determine the source of the funds or file a SAR...

And I always say that money laundering is cash in and cash out. It's not, cash in and then it sits there. While a large influx of cash is unusual, what is happening at the other end? Is the customer now sending wires? Are there a ton of ATM withdrawals from multiple locations? Are there large checks to individuals, to Cash or to companies that you cannot find any background info on?

Frankly a SAR that says "Jane Smith deposited $50,000 in cash and we have no idea where the H E double toothpicks she got a hold of that kind of scratch so we're filing this SAR" doesn't do a whole lot for law enforcement.

Now, if you file a SAR that says "On xx/xx/xxxx, Jane Smith deposited $50,000 in cash. Jane works for XYZ Department of the State of Bliss and her previous deposit history does not have cash deposits in excess of $500. This deposit put us on alert to watch her account for suspicious movement of funds. After reviewing her account for the past 120 days, we have noticed the following activity that does not appear to be the type that would be expected for an indivdidual working in a government position:
(proceeed with the list of transactions and counter-party information if you can get it.)"

That would be a lot more useful.

I agree with rlcarey
Plus the examiners cannot tell you when a SAR should or should not be filed. They are not legal representation, esp for your Bank/Department. In no way should that be a citation.

A bank that allows customers to make "unusual" transactions such as the $50,000 cash deposit mentioned above without making at least a contemporary attempt at getting more information on the nature of the transaction is effectively leaving on the table the option to choose non-filing that could be available with added info.