Skip to content
BOL Conferences
Thread Options
#388988 - 07/21/05 03:21 PM Would You File A SAR On This Activity ??
Security Guy Offline
Gold Star
Joined: Oct 2004
Posts: 327
Upstate N.Y.
Customer obtains two separate checks from an attorney, in consecutive check number order and the same date. Each check is in the amount of $ 7,500. The memo section states something about a property sale on each check. The customer goes to 2 different branches on the same day and gets cash for each check. One could speculate that our customer requested their proceeds in two separate checks, then cashed them separately to avoid a CTR filing. How many of you would file a SAR? How many of you would not file a SAR? A CTR filing is an absolute. But how about a SAR ???

Return to Top
BSA/AML/CIP/OFAC Forum
#388989 - 07/21/05 03:50 PM Re: Would You File A SAR On This Activity ??
Skittles Offline
10K Club
Skittles
Joined: Sep 2002
Posts: 13,965
TN
Tough dilemma, but I probably would file a SAR, although some would call that a defensive filing. To me it is fairly obvious what the customer attempted to do - structure.
_________________________
My Opinions Only

Return to Top
#388990 - 07/21/05 04:01 PM Re: Would You File A SAR On This Activity ??
MollyM Offline
100 Club
Joined: Jul 2005
Posts: 127
Mississippi
I would definitely file a SAR.
_________________________
“The strongest of all warriors are these two—Time and Patience.”
—
Leo Tolstoy
Russian Author

Return to Top
#388991 - 07/21/05 04:06 PM Re: Would You File A SAR On This Activity ??
obx nut Offline
Gold Star
obx nut
Joined: Oct 2003
Posts: 304
Midwest
I wouldn't consider this a defensive filing at all. As a matter of fact we would include the attorney as well. High risk occupation...and the attorney (IMO) is aiding and encouraging the structuring.
_________________________
If you always do what you always did, you'll always get what you always got.

Return to Top
#388992 - 07/21/05 04:09 PM Re: Would You File A SAR On This Activity ??
Princess Romeo Offline

Power Poster
Princess Romeo
Joined: Jun 2001
Posts: 8,272
Where the heart is
Obvious (and stupid) structuring that will add another SAR to the database. I recommend that you also review the account after the next 90 days to see if anything else suspicious occurs.

I do have to wonder how much of that was the customer's idea, and how much was from the attorney trying to be "helpful."
_________________________
CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

Return to Top
#388993 - 07/21/05 04:26 PM Re: Would You File A SAR On This Activity ??
P*Q Offline

Power Poster
P*Q
Joined: May 2001
Posts: 8,458
Somewhere
I haven't quite figured out how I feel about filing a SAR after only one incident that "appears" to be structuring. We filed one a few years back because of a one time incident that looked like structuring but it turns out, there was a perfectly reasonable explanation. I agree with the others and would probably file to CYA but again, a one time instance doesn't necessarily mean the customer is structuring. If a lot of Banks are doing this, I can see why they're stating the database is getting clogged with junk. For what it's worth, I'm probably in the minority with that opinion.

Return to Top
#388994 - 07/21/05 05:11 PM Re: Would You File A SAR On This Activity ??
Hrothgar Geiger Offline
10K Club
Hrothgar Geiger
Joined: Jun 2005
Posts: 10,395
Jersey Shore
The attorney writing 2 checks might, or might not be structuring. I think it is, but as Pizzaz points out, there could be a valid business reason for the two checks. It's going to two different branches to cash them that puts the nail in the coffin.

Valid business reason for 2 checks (although it might not apply in this case.) : Institutions that use fund accounting (research, non-profit, higher ed, some health care) may well have to write two (or more) checks to the same vendor to preserve a separation between the funds/contracts.

Return to Top
#388995 - 07/21/05 05:29 PM Re: Would You File A SAR On This Activity ??
Princess Romeo Offline

Power Poster
Princess Romeo
Joined: Jun 2001
Posts: 8,272
Where the heart is
Quote:

The attorney writing 2 checks might, or might not be structuring. I think it is, but as Pizzaz points out, there could be a valid business reason for the two checks. It's going to two different branches to cash them that puts the nail in the coffin.






Agreed - and remember that if you SUSPECT the customer has conducted the transaction to try and evade a CTR, then you are required to report, even if it's a one time event.

This is why I would like to see CTR's eliminated and replaced with a streamlined monthly aggregate cash activity report to be sent electronically. Eliminate CTR's and you eliminate most structuring SARs. IMHO of course.
_________________________
CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

Return to Top
#388996 - 07/21/05 05:30 PM Re: Would You File A SAR On This Activity ??
Security Guy Offline
Gold Star
Joined: Oct 2004
Posts: 327
Upstate N.Y.
I appreciate the input...this is the type of transaction that I would like some guidance or clarification on from FinCEN. I am opposed to defensive filings, but having to explain to the OTS or our own internal auditors why I did not file a SAR on this one is much more difficult than filing the SAR, then defending my reason for filing the SAR. The fact that the majority of you leaned towards a SAR filing may be defense in itself. But this is a grey area that needs clarification, if someone like Bill Fox would consider this filing defensive and unnecessary. But until additional guidance comes, I am filing.

Return to Top
#388997 - 07/21/05 05:50 PM Re: Would You File A SAR On This Activity ??
Princess Romeo Offline

Power Poster
Princess Romeo
Joined: Jun 2001
Posts: 8,272
Where the heart is
At the ABA conference, the example that Bill Fox gave of Defensive filing was a bank that filed a SAR on an employee who stole bacon from the bank's cafeteria.

IMHO, it would be a defensive filing if the person received the checks on different days and cashed them on different days upon receipt, especially if you do not notice any other unusual activity in the account.

But the fact that they made a CONSCIOUS effort to go to DIFFERENT branches to cash the check just screams "Intentional Structuring."

Now, will this SAR help in a serious money laundering investigation? Probably not. But the SAR instructions are quite clear. If you suspect someone is intentionally trying to avoid a CTR, you must file a SAR.
_________________________
CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

Return to Top
#388998 - 07/21/05 06:01 PM Re: Would You File A SAR On This Activity ??
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Security Guy,
I don't really think this is defensive filing as I understand it. All of the facts point to structuring. So, you have to investigate. If your investigation does not turn up facts that outweigh the appearance of structuring, you don't really have a choice.

As you note, it will be easier to defend filing it than not filing it. However, there is almost no chance that anyone will ever ask you to defend a decision to file it.
_________________________
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

Return to Top
#388999 - 07/21/05 07:03 PM Re: Would You File A SAR On This Activity ??
Nanwa Offline
Power Poster
Nanwa
Joined: Oct 2001
Posts: 5,564
Clintonville, WI, USA
Do you need to file a SAR if you file a CTR? Even if the checks were each for a separate property, and he went to separate offices to cash them, don't they show up in the bank's totals as multiple transactions over $10,000?

I mean, a one time occurance, and he IS getting reported.

But I guess you can CYA and file the SAR.
_________________________
Member of the National Sarcasm Society - like we need your support!

Return to Top
#389000 - 07/21/05 07:17 PM Re: Would You File A SAR On This Activity ??
Hrothgar Geiger Offline
10K Club
Hrothgar Geiger
Joined: Jun 2005
Posts: 10,395
Jersey Shore
If the attorney was also your customer, I'd also pull their transactions to see if this 'service' is one they offer to all their clients.

Return to Top
#389001 - 07/21/05 07:28 PM Re: Would You File A SAR On This Activity ??
Anonymous
Unregistered

I recently experienced a "difference of opinion" with an examiner on filing a SAR for an isolated structuring incident. Needless to say, the examiner won the battle and is citing me for not filing this particular SAR. I still believe in my decision to not file because I know my customer and the transaction is reasonable.

I realize FinCEN is trying to stop banks from filing defensively, but based on my experience, I am now completing a SAR for anything close. It's not worth leaving it up to examiner interpretation. Can you be cited for defensive filing?!?!?

Return to Top
#389002 - 07/21/05 07:34 PM Re: Would You File A SAR On This Activity ??
JacF Offline

Power Poster
Joined: Nov 2001
Posts: 6,719
PA
Quote:

Do you need to file a SAR if you file a CTR?


The filing of a CTR does not replace the filing of a SAR if the transactions are suspicious (as Banco Popular found out the hard way a couple of years ago). The two reports serve very different purposes.

Return to Top
#389003 - 07/21/05 07:50 PM Re: Would You File A SAR On This Activity ??
Princess Romeo Offline

Power Poster
Princess Romeo
Joined: Jun 2001
Posts: 8,272
Where the heart is
I agree with JacFSB - the CTR is still triggered since the silly customer did both transactions in the same day. However, the CUSTOMER probably did not know that, and therefore sought to complete the transactions in two different locations thinking he/she was avoiding the CTR.

So - you will file a SAR on a particularly clueless individual.

Sir/Madam - Here's your sign......
_________________________
CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

Return to Top
#389004 - 07/21/05 08:39 PM Re: Would You File A SAR On This Activity ??
Chiquita Banana Offline
Diamond Poster
Chiquita Banana
Joined: Jun 2002
Posts: 1,044
The banana bin
I'm with Pizzaz on this one. I don't know if this incident alone should trigger the SAR...There could be a number of reasons why he did two seperate transactions.

I would investigate the customer, monitor all transactions, and document. If possible, distinguish what his relationship is to the attorney.

Just my opinion.
_________________________
My opinions are definately my own. I could be wrong. But I don't think so.

Return to Top
#389005 - 07/21/05 08:56 PM Re: Would You File A SAR On This Activity ??
Dolly Nugent Offline
Diamond Poster
Dolly Nugent
Joined: Nov 2000
Posts: 1,820
Southern California
Absent a reasonable explanation, you have no choice but to file as it "appears" that the transactions may be structured. If you are really struggling with this, have the account officer call the customer and ask if there was a particular reason why he cashed the two checks at different branches. The officer should then be silent while the customer spills his guts. If you aren't willing to take this extra step to determine if there is a reasonable explanation - file the SAR.
_________________________
Dolly Nugent
CRCM
Opinions expressed are my own.

Return to Top
#389006 - 07/21/05 09:13 PM Re: Would You File A SAR On This Activity ??
JacF Offline

Power Poster
Joined: Nov 2001
Posts: 6,719
PA
Quote:

have the account officer call the customer and ask if there was a particular reason why he cashed the two checks at different branches


I'm not disagreeing with this, but I think the first call should be made to the branch that cashed the first check. Find out if the customer intended to cash both checks, but balked at the CTR. Or perhaps the branch did not have enough large bills to cash both checks, so they sent the customer to a different branch with the other checks (I know it sounds silly, but this type of thing actually happens).

Return to Top
#389007 - 07/22/05 12:20 AM Re: Would You File A SAR On This Activity ??
Princess Romeo Offline

Power Poster
Princess Romeo
Joined: Jun 2001
Posts: 8,272
Where the heart is
Quote:

Quote:

have the account officer call the customer and ask if there was a particular reason why he cashed the two checks at different branches


I'm not disagreeing with this, but I think the first call should be made to the branch that cashed the first check. Find out if the customer intended to cash both checks, but balked at the CTR. Or perhaps the branch did not have enough large bills to cash both checks, so they sent the customer to a different branch with the other checks (I know it sounds silly, but this type of thing actually happens).




Good point Jack. I had forgotten that has happened at other banks as well, especially if the customer first went to a "supermarket" branch.

Well - KYC and UYC:
Know Your Customer, Understand Your Customer!
_________________________
CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

Return to Top
#389008 - 07/22/05 12:03 PM Re: Would You File A SAR On This Activity ??
Dolly Nugent Offline
Diamond Poster
Dolly Nugent
Joined: Nov 2000
Posts: 1,820
Southern California
Jack, you do make a good point. I was just assuming that the branches had no knowledge of the other transaction. If they did, one would hope that they reported the incident to the appropriate department. But we all know that doesn't always happen!!
_________________________
Dolly Nugent
CRCM
Opinions expressed are my own.

Return to Top
#389009 - 08/11/05 04:55 PM Re: Would You File A SAR On This Activity ??
Anonymous
Unregistered

I cannot believe that you would feel that a CTR filing was adequate to show exactly what this customer was doing. I would sooner believe the CTR was redundant than the SAR.

Return to Top

Moderator:  Andy_Z