We were notified by one of our bank employees of a news article posted regarding one of our customers. Our customer was found guilty of theft by deception in his home repair/construction business. The customer has a personal account with us that does not mention the business. We have found checks that have been deposited that were made payable to the customer where the memo would indicate that it was for his business. We have no idea if any of the money he was paid by the individuals he defrauded were deposited into his account at our bank or how much could be involved. Should we file a SAR or not?

Review the account for any suspicious activity. If a check is made payable to him personally and he is a roofer by profession and the memo line says "shingles" I wouldn't necessarily consider that suspicious. If the check is payable to "Roofer Inc" and was deposited into his account, you have some additional teller training to do but it still might not rise to the level of "suspicious". Just because you read a news article that someone did something wrong, it doesn't necessarily mean that just because they are your customer you have to file a SAR.

If any of the victims' checks were deposited at your bank, that would have led investigators to approach your bank with a subpoena for your customer's account records. Of course, it is also possible that not all victims were identified.

Either way, it's right that the negative news discovery is prompting you to complete a due diligence review of your customer's account. Ultimately, it's the result of that review which will drive whether or not your file a SAR. The question that I would be considering, as a reviewer, is whether or not I suspect that any of the deposited checks represent proceeds from the thefts. If my answer is "yes", and the threshold is met, I'd file.