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#388988 - 07/21/05 03:21 PM Would You File A SAR On This Activity ??
Security Guy Offline
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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 ???

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#388989 - 07/21/05 03:50 PM Re: Would You File A SAR On This Activity ??
Skittles Online
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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.
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#388990 - 07/21/05 04:01 PM Re: Would You File A SAR On This Activity ??
MollyM Offline
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I would definitely file a SAR.
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#388991 - 07/21/05 04:06 PM Re: Would You File A SAR On This Activity ??
obx nut Offline
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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.
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#388992 - 07/21/05 04:09 PM Re: Would You File A SAR On This Activity ??
Princess Romeo Offline

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

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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.

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#388994 - 07/21/05 05:11 PM Re: Would You File A SAR On This Activity ??
Hrothgar Geiger Offline
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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.

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

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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.
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#388996 - 07/21/05 05:30 PM Re: Would You File A SAR On This Activity ??
Security Guy Offline
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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.

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

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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.
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#388998 - 07/21/05 06:01 PM Re: Would You File A SAR On This Activity ??
Elwood P. Dowd Offline
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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.
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#388999 - 07/21/05 07:03 PM Re: Would You File A SAR On This Activity ??
Nanwa Offline
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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.
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#389000 - 07/21/05 07:17 PM Re: Would You File A SAR On This Activity ??
Hrothgar Geiger Offline
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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.

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#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?!?!?

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

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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.

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

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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......
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#389004 - 07/21/05 08:39 PM Re: Would You File A SAR On This Activity ??
Chiquita Banana Offline
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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.
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#389005 - 07/21/05 08:56 PM Re: Would You File A SAR On This Activity ??
Dolly Nugent Offline
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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.
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#389006 - 07/21/05 09:13 PM Re: Would You File A SAR On This Activity ??
JacF Offline

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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).

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

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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!
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#389008 - 07/22/05 12:03 PM Re: Would You File A SAR On This Activity ??
Dolly Nugent Offline
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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!!
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#389009 - 08/11/05 04:55 PM Re: Would You File A SAR On This Activity ??
Anonymous
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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.

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