#2240167 - 07/27/20 03:42 PM
Anonymous reports to SBA
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Ollie the Obtuse
Unregistered
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The SBA has issued guidance detailing red flags for SBA program fraud related to COVID-related programs.
They instruct financial institutions to file a SAR, but, to additionally submit a complaint (which can be done anonymously) to the SBA OIG, using a toll-free number, US mail, or an online submission form (which it logically seems would capture your IP address, no matter how "anonymous" they claim that process is).
My question is, as a financial institution, have you fulfilled your obligation to identify, detect, and report suspicious activity merely by filing the SAR?
My concern with notifying SBA is that they are not a "law enforcement agency" and therefore I do not trust them to handle my reporting data confidentially. I expect they might contact the scammer (our customer) and tell them, "Someone has complained to us that you may have received SBA funds when you don't even have a small business..." etc. Basically, I barely trust federal agencies with access to SAR data not to handle it in that manner, so why should I trust an agency that lacks access to SAR data to handle it in the way that SAR-related data must be handled?
Would you agree that deciding against notifying SBA is in the best interests of the bank? We have SAR instructions that say that we must notify, when appropriate, an appropriate law enforcement agency by telephone, in addition to filing the SAR. In this case SBA isn't even a law enforcement agency so I see no obligation and no reason to make that call.
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#2240175 - 07/27/20 04:31 PM
Re: Anonymous reports to SBA
Anonymous
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Ollie the Obtuse
Unregistered
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OP here. You make it sound as though I'm disinterested in the opinions of other bankers. I'm not. That's why I posted.
I appreciate your replies and welcome any additional ones.
I recognize that my outlook is based on past experiences, which have included the inappropriate disclosure of SAR contents by a member of law enforcement. In one scenario we had a federal agent come to pick up SAR documentation, and just in the spirit of making conversation, he told us about a couple of SARs filed by other banks. He included the suspect names (which were not our customers) and the nature of the suspected activity, and described his methods of surveillance.
So yeah, I barely trust (or maybe: don't trust at all?) that our SAR data is being protected as it should be, and I hesitate to be the one to disclose it to an outside party. But if someone here sees a regulatory or legal obligation for us to report to the SBA, I'm interested to hear other perspectives. Maybe we shouldn't be worried at all about the chance that a customer, investigated for SBA fraud, will blame us or sue us for turning over their data to SBA, even if it turns out there was no fraud? (We almost never have conclusive evidence of fraud; only the "red flags" which lead to the SAR.)
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#2240178 - 07/27/20 04:59 PM
Re: Anonymous reports to SBA
Anonymous
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10K Club
Joined: Jun 2004
Posts: 19,844
Pulling people out of the ditc...
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Suppose...
You have a customer that has received a SBA loan, and you think it is suspicious and therefore file a SAR, per SAR guidelines. You further decide to contact the SBA through their hotline to report a potential fraud. you have not accused anyone of any crime, simply stated that a transaction is suspicious. so, lets imagine, just for giggles, that someone blabs to the customer that potential suspicious activity has taken place. so they come to your bank, or call. I assume that would go to your BSA area, and their simple response would be "we are not allowed to comment on any type of filing we may or may not have made, not even to confirm or deny having made any. thank you."
and my question to you is:
you have a customer that is potentially defrauding an agency of the US Government, and your okay with that and not reporting it, because "you don't trust the government" and, "if someone says the bank did it, that potentially your bank has liability." so, as long as they are not defrauding your bank, you're okay with them defrauding others, potentially?
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