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#2238293 - 06/18/20 12:55 PM PPP loan program question
Megaman Offline
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Joined: Jul 2017
Posts: 131
Good Morning,

With Regards to the PPP Loan program transactions and fraud transactions. Would a SAR be required or recommended in situation where PPP Loan proceeds were ACHed out to another financial Institution? I recently took a training course that stated Bank's should be filing SARs if PPP loan proceeds are not being used as intended. I am not sure if this counts or not. Any thoughts.

Thank you

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#2238294 - 06/18/20 01:02 PM Re: PPP loan program question Megaman
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
What if the other financial institution processes their payroll? How else would they get the employees their paycheck. I say that fact alone is not suspicious without additional information.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2238295 - 06/18/20 01:54 PM Re: PPP loan program question rlcarey
Megaman Offline
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Joined: Jul 2017
Posts: 131
Yes, I have thought of that as well. It is the classic case of how far are we required to investigate the transactions. They could be using the other financial institution for payroll, they could be using the other financial institution to finance personal items (personal car or mortgage payments for example). Any thoughts on how far we should be investigating?

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#2238304 - 06/18/20 04:02 PM Re: PPP loan program question Megaman
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
They lie to the SBA they go to jail - not the bank. Unless it is plain as day staring you in the face, I would not go out of my way to determine what they are doing until you get a forgiveness application.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2238325 - 06/18/20 07:48 PM Re: PPP loan program question Megaman
Loynograd Offline
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Joined: Jan 2008
Posts: 124

Member
Joined: Jan 2008
Posts: 99
Rlcarey,

A follow up question, if I may. I work for a federal credit union. We don't offer business loans. However, some of our members are receiving PPP funds into their personal accounts. Most of these members are small business owners with zero or only a few employees. They are probably a bit sloppy separating business and personal finances in many cases, so I wouldn't necessarily call it fraud (but it may be). Does it change your take on our side of the transaction? Should we make them open a business account for their funds or tell them to keep the funds at their primary FI for their business?

Thank you,
Last edited by Loynograd; 06/18/20 07:50 PM.
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#2244233 - 10/19/20 02:38 PM Re: PPP loan program question rlcarey
BSALady5182 Offline
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Joined: Aug 2020
Posts: 11
Would a 314(b) be necessary? How far does the bank have to investigate or it stops at just asking? Thanks.

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#2244254 - 10/19/20 05:02 PM Re: PPP loan program question Megaman
ColoradoAML Offline
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Joined: Mar 2018
Posts: 338
There's nothing that says 314(b) is required in these or any situations. If you're seeing red flags like those described in FinCEN's advisories, 314(b) may be a good tool to confirm or alleviate your suspicions.

Generally, if you're going to stop asking questions, you're probably going to want to either file or write a memo stating why you aren't filing. If you can't decide either way, you probably need to keep investigating.

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#2244269 - 10/19/20 06:26 PM Re: PPP loan program question ColoradoAML
BSALady5182 Offline
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Joined: Aug 2020
Posts: 11
Thank you.

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