What are the mandatory obligations of a Bank to file a SAR in the following scenarios (assuming that reporting thresholds are met)?

1. Bank customer provided the Bank with a valid ITIN. Later, the Bank learns that the same customer provided his/her employer with a false SSN.
2. Bank customer withdrawals cash in ‘unstructured’ amounts and the bank has knowledge that the purpose of the withdrawal is to pay a cash payroll for undocumented persons.

The SAR Activity Review: Issue 11, page 37 raised these questions. My first thoughts are that in both cases a transaction is not being attempted or conducted through the Bank, therefore not a reportable transaction. On the other hand, if the Bank is aware of illegal activity even if not being conducted through the financial institution it appears there may be some liability on the part of the Bank to report the knowledge. I'm inclined to think that FinCEN along with other government agencies will have the philosophy... 'If there is knowledge then the Bank must report.

Your thoughts? Thanks

Here's a prior thread on the cash payroll issue. The consensus is that your bank needs to do some enhanced due diligence with an eye toward filing a SAR, but filing the SAR is not the knee jerk reaction.

Thanks for the pointer to the SAR Activity Review. The answer there is an exercise in equivocation, but I think your fact situation is a little different. You have no problem with the ITIN the customer gave you, but believe he may have used a false SSN elsewhere. From my perspective, your customer's alleged actions with his employer do not affect the bank or involve transactions conducted through the bank. I don't see the basis for a SAR...