One of our employees recently attended a training session, where they discussed outstanding monetary instrument logs and what to look for. We currently review our outstanding log for possible structured purchases and any large purchases that are still outstanding. Most are from closures of accounts that haven't been touched (account activity reviewed and nothing suspicious found)

My question is, when is a monetary instrument considered dated to the point that a SAR would be required? And if a SAR was to be filed, what would be the reason? Especially if that customer is no longer a customer and we can not contact them to find out why they haven't negotiated it yet.

The regulatory panel, prompted by the audience, had a protracted discussion on this topic. They did not give a specific time frame or a specific dollar amount for when a bank should consider outstanding cashiers checks to be suspicious. However, they did stress that purchasing then not negotiating an official check was one method of hiding assets from seizure by law enforcement agencies. One of the panelists gave an example of unnegotiated official checks in excess of a million dollars. (Hard to argue with an example like that.)

Trying to fairly paraphrase, the discussion revolved around a bank's responsibility to realize that some large items have been outstanding for an unreasonable period of time, attempt to research the source of funds, and if necessary to unravel the puzzle, contact the purchaser. (Your practice sounds compliant.)

As far a reason for filing a SAR, I'm aware of an FDIC examiner who considers everything inexplicable to be "income tax evasion" (He says that even when the bank is familiar with the source of funds and the underlying transaction was not taxable.)

A more logical rationale is found in one of the filing triggers. The action has no apparent business purpose or the financial institution cannot determine a logical reason for the action. In brief, it just doesn't make any sense. There's no check box for that, but "35z" has a fill in the blank option. Being unable to contact the purchaser would not be a reason for not filing a SAR...

The above is my attempt to accurately relate a conversation by others, not an expression of opinion on my part.

There is one box you can check, No apparent business or legal purpose. Or something like that.

The shoud add a "Defensive SAR" box as to help us with the regulatory issues and to help Law inforcement in not following up on trash SAR's.

One client started a SAR narrative: "We are filing this SAR because our regulatory agency has directed us to do so." Could be a check box for that too...

Thank you! When we first started monitoring our outstanding MOI report we flagged three customers for filing. Mostly for structuring activity, but we fought with examiners when they questioned our timeframe. Since the transactions were conducted over a span of about four years they said we should have filed then.

Problem was... the MOI wasn't purchased until years later and even then there's no way we could have put all the pieces together until it hit this report.

I guess they want us to have superpowers to see into the future?

If I may, I'm going to ask another MOI question. On 12/18/2015 an estate closed by paying out to the heirs. Four of the heirs received a cashier check for $8600.00. Three heirs' cashiers checks have cleared but the fourth check has not. Over the almost two years we have called the heir plus contacting the executor who has also contacted this heir. To date the cashier check is still outstanding. In reading this thread, I'm now wondering if a SAR should have been filed? St of Illinois escheatment is five years so do we continue to contact her and when the escheatment period rolls around we just send it to the State? Thank you for any insight given.

Your have actual knowledge of the source of the funds; i.e. you are not speculating. Inherited funds are:
* legally obtained and
* not subject to income taxes.

You have no basis for filing a SAR other than as a "defensive" maneuver aimed at avoiding regulatory criticism that would be based wholly on ignorance... The lower your opinion of your examiners, the more likely you are to file.

P.S. As a trust officer, for five years my job included settling decedents' estates. Some people feel guilty about inheriting money. Others, resentful. Your payee has made a decision not to cash the check. Drop your quest and just let it escheat when the time comes.

Wonderful Ken! We wanted to say enough is enough, if she doesn't need $8600 so be it. Thank you, thank you, thank you!!!