We received a loan request from a customer who owns an auto repair shop and listed it as this/her only employment. The tax returns for the individual show business income of say $2000. The auto shop shows Gross receipts of say $60,000 minus $40,000 cost of goods sold = gross income of $20,000 - expenses of $18,000 = tentative profit of $2,000.

When reviewing a bank statement from the individual for a 1 month period; we found deposits into the personal account of $19,000 and $3,000 into business account.

These figures on the bank statement do not appear to be anywhere close to what is being reported on the tax returns. It appears that he may be depositing business funds into his personal account.

Is this suspicious enough to file a SAR? Do I file the SAR on the amount the customer requested for the loan?

Did you ask him what he is doing?

No, we denied the applicant based on debt to income and ability to repay.

The bank statements were from another bank, so we do not know what was deposited. We did see in the bank statement that we received from the applicant that he/she purchased a $65,000 car with funds from the personal account; with a substantial balance remaining in the account. The bank statement showed a check for $65,000 and the lender asked what was purchased, and the applicant stated that it was to purchase a car.

Just not sure if we have enough to file on and need guidance.

So you do not know source of cash, the activity in questioned did not go through your bank, and you are not alleging that the borrower is lying to you about business income as he is not stating more than his returns show thus no mortgage fraud? What is the activity or crime that is coming through your bank?

I know you are looking at possible tax evasion and that is a valid concern, but without even asking the guy about the source of cash, I dunno if you have enough to warrant that reporting. Your call.

Actually there was no stated income in the post. 19,000 could be from the sale of anything (or a borrowed deposit to inflate personal income hence bank fraud). He could be lying about his income as well. I would go with your first post JJ