Trying to double-check my understanding of BSA math. Probably over-thinking it. Haven't had my morning kombucha yet.
- Bilbo Inc. deposits $11,000 cash and withdraws $11,000 cash the same banking day. For CTRs, $11,000 minus $11,000 does
not equal zero; it equals a CTR reporting $11,000 cash in and $11,000 cash out.
- Aragorn LLC deposits $8,550 cash and withdraws $3,000 cash later the same banking day; all transactions are on behalf of and benefiting Aragorn LLC's operations. Since neither the in's nor the out's total over $10,000, a CTR cannot be filed.
Sound good so far? Okay let's talk about SARs:
- Frodo starts the month with a $1 balance, and today he deposits $4,000 in suspicious cash, then tomorrow spends all $4,000 of it suspiciously via debit card and ACH transaction debits. When you are considering a SAR, is that a $4,000 amount of money (therefore below the filing threshold for a non-insider SAR), or $8,000 (therefore above the filing threshold)?
I've seen bankers with many years of experience feel strongly about both positions: it's all the same $4,000 so it's only a grand total of $4,000. We'd be creating imaginary funds out of thin air, to pretend that Frodo's transactions involve $8,000. And yet, my reading of FinCEN's FAQs is that $4,000 in plus $4,000 out equals an $8,000 SAR.
(Source: FAQs on the FinCEN SAR:
"23. How must I complete FinCEN SAR Item 29 “Amount involved in this report†when I have no amount or I have multiple amounts involving different transaction types? Item 29 records the total amount involved in the suspicious activity for the time period of the SAR. Multiple amounts will be aggregated and the total recorded in Item 29. This requirement applies even when the amounts involve different transaction types, such as when some are deposits and some are withdrawals. All amounts are aggregated and recorded as the total amount.")
https://www.fincen.gov/frequently-asked-questions-regarding-fincen-suspicious-activity-report-sar)
So based on that, I am in the minority, being in the "It's $8,000" camp. Is that how other BSA people handle SAR totals and SAR filing thresholds? I can't be the only one right? FAQs and guidance are not law, but generally we do try to follow them to the best of our ability, even when they try to reinvent the basic rules of mathematics and replace them with double-think nonsense.