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#2092285 - 08/09/16 01:56 PM Repeated SAR filings and continued new loans
Tabbetha, CRCM Offline
Junior Member
Joined: Feb 2009
Posts: 44
Mississippi
What are your thoughts on this subject? I have an attorney that is clearly using IOLTA funds inappropriately. I have filed SARs for the past 6 months activities however the bank continues to make new loans to this customer. Obviously most do not know the SARs exist, but this lender is the CEO and he does know. Any guidance on how I should proceed?

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#2092298 - 08/09/16 02:23 PM Re: Repeated SAR filings and continued new loans Tabbetha, CRCM
*W*W* Offline
Platinum Poster
Joined: Feb 2010
Posts: 835
Have your SAR Decisioning body make a customer retention decision and communicate that to the CEO.
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#2092321 - 08/09/16 03:08 PM Re: Repeated SAR filings and continued new loans Tabbetha, CRCM
thomasj Offline
Power Poster
Joined: Mar 2001
Posts: 5,063
Pennsylvania
Also, mention to the board or the committee of the board that you report SARs to that the customers accounts remain open and that new loans are being made. It is a very uncomfortable position to be in.
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#2092344 - 08/09/16 04:39 PM Re: Repeated SAR filings and continued new loans Tabbetha, CRCM
RockChucker, CAMS Offline
Diamond Poster
Joined: Jul 2013
Posts: 1,639
The Country
Does your BSA program provide any guidance as to how account will be handled for individuals/businesses that have repeated continuing SARs filed?

If so that might help you get some traction to close account, terminate the relationship or at least stop expanding the relationship.

Good luck and don't forget to document your position on this issue so it doesn't come back to bite your assets smile
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#2092360 - 08/09/16 05:40 PM Re: Repeated SAR filings and continued new loans Tabbetha, CRCM
Tabbetha, CRCM Offline
Junior Member
Joined: Feb 2009
Posts: 44
Mississippi
Thank you for the responses. We do address repeated SAR filings in the policy. We have yet to close one due to repeated SAR filings though. I am learning the value of documenting to CYA. I can add the information to the BOD report for SAR filings however I might be considered throwing the CEO under the bus to provide "the accounts are still open and we continue to make loans" during the BOD meeting. We don't have a separate committee to report to. So I feel I'm between a rock and a hard place.

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#2092361 - 08/09/16 05:52 PM Re: Repeated SAR filings and continued new loans Tabbetha, CRCM
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,593
Cape Cod
If the attorney ends up getting sued by any of his clients for mishandling clients' funds, if the bank is enabling the attorney's actions it could get dragged into the legal swamp, too.
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#2092439 - 08/10/16 11:59 AM Re: Repeated SAR filings and continued new loans John Burnett
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Focus on Rock Chucker's advice and do what is necessary to preserve your career. (Your bank may search for a scapegoat someday. I promise you that your CEO will suggest you are the better choice.)

If your policy provides that repetitive SAR filings be escalated for management consideration, then leave a paper or electronic trail that you attempted to do so even though it' apparent that your CEO is already aware of the facts. Without knowing the exact wording of your policy, I suggest you tell the CEO in writing that this is an appropriate circumstance for escalation, very clearly offer your recommendation that the relationship be discontinued (including closure of the IOLTA account) due the potential loss and risk of public embarrassment, and ask who else he or she would like to involve in the decision.

On verbal discussions: Do not rely on them regardless of the fact that you might write a thrilling memo to file regarding their content. The other party will simply say he or she has no recollection of such a conversation. Had it actually happened, they would certainly have done something about it.
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#2093130 - 08/14/16 06:36 PM Re: Repeated SAR filings and continued new loans Tabbetha, CRCM
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 78,958
Galveston, TX
Anybody bother informing the Mississippi Bar Foundation of your suspicions. In the OLITA agreement that the lawyer signed to open the account, it would most likely let you (check with your own legal counsel).

"The undersigned further authorizes you to disclose to the Mississippi Bar Foundation any and all information with
respect to the IOLTA account being established by the undersigned as contemplated herein including all information
designated by Mississippi Professional Conduct Rule 1.15 authorizing the establishment of IOLTA accounts and
designating the Foundation as the recipient of the interest on all such accounts."
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