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#1984234 - 12/18/14 08:57 PM SAR Tiebreaker
PrimeTime Offline
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PrimeTime
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As many of these start out...there's currently a disagreement between SAR filers that I was hoping to get some information one way or the other to come to a conclusion. Here's our situation:

Customer A deposits cash in the amount of $4,000 this morning in a personal account. This same day, he also has a check clear his account in the amount of $4,000, cashed at another institution. Upon further review, it is noted that the spray on the back of the check reads yesterday's date. On yesterday's date, the customer did not have the funds available in the account to fund this check. It should also be noted that this check was made out to a business that the customer just so happens to own.

This sort of activity has happened for quite some time now, and is absolutely not an isolated incident. It goes in the same exact order, cash deposit for X amount, check clears account for the same X amount, and the spray always reads the prior day when the funds were not available in the account.

So, we're left with the questions: is this a cash kite? And should the SAR be filed? Additionally, should we contact the other bank via 314(b) in order to ensure that the same activity is happening at their institution, with the business account that we're seeing as the payee on our checks playing the opposite role at their institution?

Feedback is greatly appreciated, I love having ammo going into these discussions, because well, who wants to be wrong?
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#1984239 - 12/18/14 09:05 PM Re: SAR Tiebreaker PrimeTime
rlcarey Online
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rlcarey
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Galveston, TX
It has the appearance of a cash kite. File your SAR. Close the account. Let the other bank fend for themselves.
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#1984241 - 12/18/14 09:12 PM Re: SAR Tiebreaker PrimeTime
Elwood P. Dowd Offline
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A kite is like the child's game of musical chairs. When the music stops someone isn't going to have a place to sit down. I would contact the other bank, 314(b) or not, on the day following the day I returned the first check.

Close the account first. Worry about any necessary SAR filing later.
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#1984247 - 12/18/14 09:26 PM Re: SAR Tiebreaker PrimeTime
PrimeTime Offline
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PrimeTime
Joined: Nov 2014
Posts: 173
Thank you both very much for the input. If it wasn't obvious in the description, I was pro-file/closing of the account, so this is great to hear.
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#1984280 - 12/18/14 10:07 PM Re: SAR Tiebreaker PrimeTime
Princess Romeo Offline

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I always have to wonder at the people in the bank that want to keep an account like that open. My first reaction is to given them a look of incredulity and say "Why?"
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#1984282 - 12/18/14 10:11 PM Re: SAR Tiebreaker Princess Romeo
Elwood P. Dowd Offline
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Elwood P. Dowd
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Because: "They're a good customer."

That's what they say even though, by definition, a kiter doesn't have a dime in their bank. Aggghhhhhh!
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#1984311 - 12/19/14 04:05 AM Re: SAR Tiebreaker PrimeTime
rlcarey Online
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Galveston, TX
But Ken - he comes into the branch every day smile
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#1984324 - 12/19/14 01:40 PM Re: SAR Tiebreaker PrimeTime
PrimeTime Offline
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PrimeTime
Joined: Nov 2014
Posts: 173
Exactly what happened. I presented my findings and quite literally the first words were "well we'll have to discuss if we want the account closed." WHY?!?!
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#1984426 - 12/19/14 05:29 PM Re: SAR Tiebreaker PrimeTime
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,408
Cape Cod
Order of events:
1. Bounce the check
2. Close the account, giving any required notice
3. Notify the other bank
4. File the SAR

Elapsed time between events 1 and 3: one day. Complete event 4 as promptly as possible after event 3 so you can move on to the next problem.
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