Skip to content
BOL Conferences
Page 2 of 3 1 2 3
Thread Options
#589646 - 08/03/06 05:11 PM Re: Would you file a SAR for this?
Dip Offline
Power Poster
Dip
Joined: Mar 2005
Posts: 6,298
San Diego, CA
hey guys...i'm going to file! more work for me, but i can take it...it will be an easy SAR to fill out.
_________________________
Dabbling in banking, law, accounting...the life of a trustee.

Return to Top
BSA/AML/CIP/OFAC Forum
#589647 - 08/03/06 05:51 PM Re: Would you file a SAR for this?
ACBbank Offline
Power Poster
ACBbank
Joined: Jul 2006
Posts: 4,344
New York City
I think it is the right decision. Yes, it is a bit defensive, but in a regulatory environment where examiners are looking to make examples, I think you are playing it safe.
_________________________
"100 victories in 100 battles isnt the most skillful. Subduing the other's military w/o battle is the most skillful." Sun-Tzu

Return to Top
#589648 - 08/03/06 07:11 PM Re: Would you file a SAR for this?
Pinkie CRCM Offline
Gold Star
Joined: Aug 2003
Posts: 399
KY
After reading all the posts, I can see both sides, but I am sticking with my original train of thought - that this one time, although not normal for this customer, does NOT require a SAR.

Dip - just as a thought, do you have it written anywhere in your program, policy, etc., HOW and WHO makes the determination to file SARs in general? My logic here is that you may be setting precedence for your bank, and would be expected to file future (defensive) SARs based on this. I can hear the conversation with an examiner...

"Well, if you thought this one time event is not normal and you filed a SAR, what about all the other "one time events" that are not normal for other customers and you DIDN'T file a SAR on them?" Would this include such things as this is a church going person and it is not normal for them to go to a casino when it is against their religion, making a FURTHER jump that they must have gotten the cash illegally? I know that sounds a bit extreme, but come on!

As Magic described, there are areas (mine included) that have multiple casinos and a one time $6000 cash dep with $200 average is not out of the ordinary. And another for instance, my grandfather who was of the depression era, actually hid cash in his house that we didn't find until after he died. We collected it all, took it to the bank, they filed the CTR - but it sure as heck was not "normal" for us. Did they file a SAR - I sincerely doubt it.

ABC brings up a good counterpoint that we cannot confirm that the money MAY have come from illegal means. But if I remember correctly from DIPs original post, you think the reason this customer is doing this activity is to try and hide it from her husband, not the IRS.

Or better yet, do you suspect that she might be involved in some identity theft, counterfeiting, bank or computer fraud, check fraud or kiting, wire fraud, drug dealer, a terrorist? OH WAIT, how about "Mysterious Disapperance"!!

Good grief!!

Return to Top
#589649 - 08/03/06 07:14 PM Re: Would you file a SAR for this?
Anonymous
Unregistered

I agree with Magic City. Unless it is 'illegal' or 'criminal', I'm not going to file on a one time cash transaction of $6,000.00.

Return to Top
#589650 - 08/03/06 09:46 PM Re: Would you file a SAR for this?
Dip Offline
Power Poster
Dip
Joined: Mar 2005
Posts: 6,298
San Diego, CA
the bigger issue here was nto the cash deposit, it was the bringing in large amoutn of cash and turning it into travellers checks right away. the amoutn of cash is not supported by the account, but the need to turn it to travellers checks right away is fishy. if it were just a cash deposit, i wouldnt care. it was the turnaround to monetary instruemnts that piqued my interest
_________________________
Dabbling in banking, law, accounting...the life of a trustee.

Return to Top
#589651 - 08/03/06 11:51 PM Re: Would you file a SAR for this?
Titanic Offline
Gold Star
Titanic
Joined: Feb 2005
Posts: 300
My Workplace
DIP,

It's difficult to decide if a one time transaction is worth filling the SAR without obviously being a "defensive" SAR.

I had a similar situation, with the exception that the items being bought were Cashier checks..the transaction involved was 8K in cash. Same pattern the cash was deposit and 2 days later customer bought the cashier check payable to his brother.

I went one step further and before filing the SAR I waited for the Cashier Check to be cashed, later I found out that the check was deposited at a different bank.

With that information I Filed a SAR report. First, I can only see one piece of the puzzle and FINCEN can actually see at the whole picture and put the pieces together...

Perhaps there is a way to find out if the Traveler cheques were cashed and where.....

That's just my 2 cents....
_________________________
[b]"Common sense is not so common." Voltaire~[u]

Return to Top
#589652 - 08/04/06 01:02 PM Re: Would you file a SAR for this?
Reed Offline
Diamond Poster
Reed
Joined: Sep 2005
Posts: 1,251
West Coast
Hypothetical; If a customer brings in a large cash deposit and the teller starts filling out a CTR and the customer decides not to proceed with the transaction because they don't want the CTR filed, is that an automatic SAR?

I always thought it was, but reading this thread, now I'm not sure.

Return to Top
#589653 - 08/04/06 01:15 PM Re: Would you file a SAR for this?
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,293
Yes, because it is an attempt to evade BSA reporting.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

Return to Top
#589654 - 08/04/06 01:23 PM Re: Would you file a SAR for this?
Reed Offline
Diamond Poster
Reed
Joined: Sep 2005
Posts: 1,251
West Coast
Even if it was a one time only thing and there was no evidence of money laundering?

I just watched BOLs "BSA and Beyond" and it gave the opinion that you would not file in that instance.

Return to Top
#589655 - 08/04/06 01:37 PM Re: Would you file a SAR for this?
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,293
It is structuring, choice A on the SAR form for type of suspicious activity. I personally would report suspected structuring, especially when it occurred in front of a bank employee. This is quite different from guessing that a customer is structuring based upon deposit patterns.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

Return to Top
#589656 - 08/04/06 03:54 PM Re: Would you file a SAR for this?
ACBbank Offline
Power Poster
ACBbank
Joined: Jul 2006
Posts: 4,344
New York City
Quote:

DIP,

It's difficult to decide if a one time transaction is worth filling the SAR without obviously being a "defensive" SAR.

Dip has summed up what would have been my response pretty well here. Also, just because a customer says " I am hiding the money from my husband" , one cannot logically conclude she has or will pay taxes on it. I prefer to have documentation to back up my decision on whether to or not to file a SAR. A customer's response, while is somewhat helpful to the situation, is not evidence enough to satisfy me. While the odds are it is nothing illegal, to assume it isn't a case of money laundering, kititng, etc. puts your Bank in a risky spot.
_________________________
"100 victories in 100 battles isnt the most skillful. Subduing the other's military w/o battle is the most skillful." Sun-Tzu

Return to Top
#589657 - 08/04/06 04:04 PM Re: Would you file a SAR for this?
ACBbank Offline
Power Poster
ACBbank
Joined: Jul 2006
Posts: 4,344
New York City
I also wanted to address Pinky's example of the church going person as I think that should without a doubt have a SAR filed. If a person who has average balances of say $400-$600 came into the branch and made a cash deposit of $6M-$7M, I would without a doubt file a SAR. Like I said in my earlier post, for which some reason didn't post in the format I wanted it too, the customer's reason for coming in to the money is useful, but not enough, in my opinion, to sway me from filing a SAR. Again, I will copy paste an excerpt from the new BSA/AML manuel.

"The SAR should describe, as fully as possible, why the activity or transaction is unusual for the customer, considering the types of products and services offered by the filing bank's industry, and drawing any applicable contrasts with the nature and normally expected activities of similar customers."
_________________________
"100 victories in 100 battles isnt the most skillful. Subduing the other's military w/o battle is the most skillful." Sun-Tzu

Return to Top
#589658 - 08/04/06 05:41 PM Re: Would you file a SAR for this?
Chiquita Banana Offline
Diamond Poster
Chiquita Banana
Joined: Jun 2002
Posts: 1,044
The banana bin
On the one deposit alone, I wouldn't file. I would document the conversation that was had with the customer and move forward by monitoring EVERYTHING. Maybe even do a complete analysis of the account: deposits, checks for a year.

If she's hiding money from her spouse and this account was just in her name, isn't it likely that they have a joint account at another bank? If that's the case, is it possible, that particular account may have consistently higher balances? And if that's possible, is it possible that the cash potentially came from the other account as a cash withdrawal OR is it possible that she closed the joint account using the withdrawal in cash, went to her other bank and converted it to Travelers Checks so her spouse couldn't find the money?

What does this woman do for a living? Just because the balances by themselves average only $200, doesn't mean that it's her only account. Does the account have direct deposit showing source of income?

Could this fall under a 314(b) inquiry for money laundering and if you could ascertain another banks involvement, couldn't you contact them (provided they are also on the list)?

I agree with another person that filing a SAR on just the information provided is 1)not required 2)defensive and 3)sets dangerous precedence.

Plus, what do you checkmark for reason to file a SAR?

IMO, you don't have enough historical information to say, "Yes, this requires a SAR because of this, this, this, and this". I think more digging is necessary. A lot of questions to be answered.
_________________________
My opinions are definately my own. I could be wrong. But I don't think so.

Return to Top
#589659 - 08/04/06 08:16 PM Re: Would you file a SAR for this?
ACBbank Offline
Power Poster
ACBbank
Joined: Jul 2006
Posts: 4,344
New York City
I don't recall saying to file a SAR on the information provided. In fact, I have been saying since my first post in this thread, that it is the LACK of information that would lead me to file a SAR.
_________________________
"100 victories in 100 battles isnt the most skillful. Subduing the other's military w/o battle is the most skillful." Sun-Tzu

Return to Top
#589660 - 08/04/06 08:17 PM Re: Would you file a SAR for this?
ACBbank Offline
Power Poster
ACBbank
Joined: Jul 2006
Posts: 4,344
New York City
BTW, everyone have a good weekend, I'm looking forward to picking this debate up on Monday.
_________________________
"100 victories in 100 battles isnt the most skillful. Subduing the other's military w/o battle is the most skillful." Sun-Tzu

Return to Top
#589661 - 08/04/06 08:42 PM Re: Would you file a SAR for this?
Chiquita Banana Offline
Diamond Poster
Chiquita Banana
Joined: Jun 2002
Posts: 1,044
The banana bin
Well, I'm gonna get the last word in for today then...it's how I do.

IMO, you don't file a SAR on what you don't know, you file a SAR on the facts. If you complete a thorough investigation, and the fact is after the investigation that you still don't know and it's STILL not right...then cool.

But armed with the information alone? I don't think so. Too many questions need to be answered to get a bigger picture of what's really going on.
_________________________
My opinions are definately my own. I could be wrong. But I don't think so.

Return to Top
#589662 - 08/04/06 08:50 PM Re: Would you file a SAR for this?
Dip Offline
Power Poster
Dip
Joined: Mar 2005
Posts: 6,298
San Diego, CA
The customer is self employed...it could qualify under the money laundering topic...bringing in cash and exchanging right away for negotiable items...
1- the transaction is suspicious based on the customers history
2- i have a suspect (the customer)
3- it involves more than $5000
signs point to file
_________________________
Dabbling in banking, law, accounting...the life of a trustee.

Return to Top
#589663 - 08/04/06 09:10 PM Re: Would you file a SAR for this?
Chiquita Banana Offline
Diamond Poster
Chiquita Banana
Joined: Jun 2002
Posts: 1,044
The banana bin
So, then does this mean that on every account with a low average balance suddenly deposits over $5,000 cash, you're going to file a SAR?

I see your logic but IMO, the one transaction by itself is unusual but not necessarily suspicious.
_________________________
My opinions are definately my own. I could be wrong. But I don't think so.

Return to Top
#589664 - 08/05/06 09:56 PM Re: Would you file a SAR for this?
Princess Romeo Offline

Power Poster
Princess Romeo
Joined: Jun 2001
Posts: 8,272
Where the heart is
I think there is a HUGE difference between a transaction that would cause you to file a SAR vs. a transaction that would cause you to promote the customer onto your "High Risk" list.

After all - isn't that what this debate is discussing?


There is also a huge difference between filing an automatically required SAR for obvious structuring (customer reduces the amount of their deposit on-the-spot to avoid a CTR) vs a one-time deposit of funds.

Frankly, I really think we need to add a "stupid" box on the SAR for those transactions that automatically require a SAR but really show stupidity on the part of the customer - i.e. the reduction in the deposit to avoid the CTR.

But that's only my opinion....and here's your sign.
_________________________
CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

Return to Top
#589665 - 08/06/06 09:16 AM Re: Would you file a SAR for this?
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Oftentimes people buying official checks and money orders with cash are creating invisible assets to avoid creditors, spouses, law enforcement, the IRS etc. However, the fact that she deposited the cash first suggests a)she's not trying to hide anything or b)you should check the "stupid" box Bonnie suggests.

The customer's actions are uncharacteristic and merit monitoring for future activity, but there is no argument that she avoided BSA requirements. Her actions don't serve as an adequate basis for a required SAR filing.

Return to Top
#589666 - 08/07/06 02:08 PM Re: Would you file a SAR for this?
ACBbank Offline
Power Poster
ACBbank
Joined: Jul 2006
Posts: 4,344
New York City
The one thing I want to know from all those who have an opinion on not filing, is how you interupt the reg. I posted earlier. I mean, it is pretty clear, at least to me, that if the transaction is not consistent with a customer's normal activities, it requires a SAR. While those who are against filing a SAR make some valid points, I still believe you are missing the key issue. I cannot seem to locate any where in the new BSA/AML manual about not having to file if it is only "one" transaction. I have disagree with Ken, this customer's actions clearly fit the situation described in the new BSA/AML manual, at least IMO.
_________________________
"100 victories in 100 battles isnt the most skillful. Subduing the other's military w/o battle is the most skillful." Sun-Tzu

Return to Top
#589667 - 08/07/06 02:33 PM Re: Would you file a SAR for this?
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
The BSA manual really doesn't add any insight, it parrots the regulations as they have always been written. Here's what I refer to as the "elastic clause" in the Treasury regulation:

(iii) The transaction has no business or apparent lawful purpose or is not the sort of transaction in which the particular customer would normally be expected to engage, and the bank knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction.

The issue is whether the direction is literal. My perspective is that if your bank is suspicious of criminal activity, but simply cannot figure out what's going on, this paragraph requires you to report it. However, I do not believe it requires you to report a transaction that is just out of the ordinary. In the situation described above, there is nothing of any kind that suggests criminal activity, it's a single aberrant transaction. If banks begin taking that instruction literally the number of SARs filed will increase exponentially.

Last year, I sent a five figure wire transfer to an individual in South Carolina. (I live two states away.) There was also a day where I withdrew $7,000 in cash. If my bank looked at my transaction history in the last five years both transactions were anomalies. If they filed two SARs on me, I think they are more than just a little silly; they would have been well served by calling FinCEN to test their theories before they did so.
_________________________
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
#589668 - 08/07/06 02:44 PM Re: Would you file a SAR for this?
ACBbank Offline
Power Poster
ACBbank
Joined: Jul 2006
Posts: 4,344
New York City
Again, you make a valid point Ken. However, I don't believe you can just disregard the BSA/AML manual. I do believe that the information I posted does offer a rationale for my belief in filing a SAR. Just a difference of opinions and perhaps experience with examiners. Since you used two examples, I would not file a SAR on a wire transaction, but the 7M would be a SAR.
_________________________
"100 victories in 100 battles isnt the most skillful. Subduing the other's military w/o battle is the most skillful." Sun-Tzu

Return to Top
#589669 - 08/07/06 03:58 PM Re: Would you file a SAR for this?
Princess Romeo Offline

Power Poster
Princess Romeo
Joined: Jun 2001
Posts: 8,272
Where the heart is
Here's the KEY point:
Quote:

....including the background and possible purpose of the transaction.




POSSIBLE PURPOSE - There are many POSSIBLE PURPOSES to a ONE-TIME cash transaction in a consumer's account!

Holy cow - what if I hit the Superfecta at the local racetrack? That's a LEGAL transaction, and one in which I will get paid in CASH. I have a friend who won $15,000 in a "Pick 4" bet, and he asked the track to give him a check instead of cash because he didn't want to be a target on his way to his car. It took him 2 HOURS to finally find someone who understood what he wanted!

Again - think about the "Risk Ranking" and "Customer Due Diligence" aspects of your BSA program, the one that the regulators want every bank to have. It makes no sense to simply file automatically defensive SARS for every small abberation in transaction pattern. We may as well welcome Big Brother right into our living rooms.

What does make sense is to have a transaction temporarily "bump" a customer into a higher risk category where you will review their activity more frequently. If you see nothing else going on after awhile, then you can move them back down the risk ladder.

I also do not understand your willingness to file a SAR for cash but not a wire. Wires, afterall, are the vehicle of choice for Money Launderers when they get into the Layering Phase.

You also have to look at the question of volume. If you talking about a one-time cash transaction of $8,000, that would be one thing. $80,000 is quite another. This is where the judgement and experience of your BSA Officer comes into play.

Finally, what ever happened to simply calling the customer and asking "We noticed this large transaction in your account, and it's not the type we would normally expect to see. Can you tell us where the money came from?"

If you haven't done that, you really have no business filing a SAR because you're filing nonsense.
_________________________
CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

Return to Top
#589670 - 08/07/06 04:34 PM Re: Would you file a SAR for this?
Pinkie CRCM Offline
Gold Star
Joined: Aug 2003
Posts: 399
KY
Please refer to page 39 of SAR Review #7

Based on the Definitions and Criminal Statutes for the SAR Report Characterizations of Suspicious Activity, what box do you check and why?

Return to Top
Page 2 of 3 1 2 3

Moderator:  Andy_Z