This is probably the closest thing you will ever get to finding about suspicions of illegal activity by a bank employee when doing a pre-employment background check. Please note that it is voluntary and the fact that a SAR may have filed cannot be disclosed. Here again, most bankers know that if there were suspicions of illegal activity by a bank employee, a SAR should have been filed.

Section 18 of the FDI Act

(w) Written Employment References May Contain Suspicions of Involvement in Illegal Activity--
(1) AUTHORITY TO DISCLOSE INFORMATION.--Notwithstanding any other provision of law, any insured depository institution, and any director, officer, employee, or agent of such institution, may disclose in any written employment reference relating to a current or former institution-affiliated party of such institution which is provided to another insured depository institution in response to a request from such other institution, information concerning the possible involvement of such institution-affiliated party in potentially unlawful activity.
(2) INFORMATION NOT REQUIRED.--Nothing in paragraph (1) shall be construed, by itself, to create any affirmative duty to include any information described in paragraph (1) in any employment reference referred to in paragraph (1).
(3) MALICIOUS INTENT.--Notwithstanding any other provision of this subsection, voluntary disclosure made by an insured depository institution, and any director, officer, employee, or agent of such institution under this subsection concerning potentially unlawful activity that is made with malicious intent, shall not be shielded from liability from the person identified in the disclosure.
(4) DEFINITION.--For purposes of this subsection, the term "insured depository institution" includes any uninsured branch or agency of a foreign bank.

I've always wondered at the thought processes underlying this provision...

It allows for a bank's disclosure of an employee's wrongdoing in a written reference if requested by another bank. Most banks no longer give positive written references, but someone believed they would be willing to give a negative reference?

I think banks have no choice but to take the hard-line. Unfortunately, the rules are such that there just isn't a lot of wiggle-room and given some of the BSA penalties being assessed, who wants to mess with it?

File it. Is it defensive? Perhaps. Could it potentially harm the employee? Perhaps... but if it comes down to an employee or the bank, who do you think the bank is going to side with? Besides, how many stories have we all read about significant fraud being committed but it gets overlooked in the SAR process?

The decision to file a SAR is very simply better to be safe than sorry. We take that stance that probably nothing will ever come out of those we file... but, we don't ever have to regret not filing one and having it come back and kill us. If we don't file, we, of course, document it... but there has to be some pretty compelling reasons not to just go ahead and file. We don't care if it is defensive. They hand out multi-million dollar penalties, like the one just today, and expect us not to file defensively? I don't think so.

I stated in an earlier post in here that I do not agree with filing a SAR in this situation. That being said, I also feel that the level of internal punishment if you will must also meet the level of infraction.

If you feel it is reasonable to file a SAR on this employee, even if you think "probably nothing will come of it", then you should also terminate the employee as well.

If you feel his conduct was compelling enough to file a SAR, how will you explain to the examiner why he is still on staff in that same role, able to repeat his mistake?

That's not how the system is set up, though, is it? Banks aren't asked to judge the information they submit... but, they can get into a whole lot of trouble for not submitting information that the government deems worthy. Destinquishing what's worthy of submitting and what's not is the gray area and why, I believe, it's better to file defensively than not to file at all.

We've filed, what we feel, were worthy SARS on some customers... we didn't immediately drop them as customers and they didn't have further activity that indicated to us they weren't worth having as customers. But, again, we just submitted the information we felt, by law, we had to submit. We do not, then, become judge and juror of the situation unless we would see repeated behavior, which to date, we have not. We leave the roles of judge and juror to the government who have set up the system anyway. We just play by their rules.

We, in fact, had an employee structure one of their own transactions as reported by a teller. Very frustrating because we have documented proof that the employee knew this was not allowable. They did it, anyway. Guess what? We filed a SAR on them... by law, we felt we had to. And if the law feels like they want to step in and judge the employee, then I guess that's their perogative. I can tell you the employee is still here and nothing at all seems to have come of us having filed the SAR.

The employee was halled in and upper management went over how structuring, for any reason, is kind of a big no-no. To the best of our knowledge, this was a totally isolated incident. We have no beliefs that employee has ever counseled any customer to structure, nor do we believe he/she has structured any more of their transactions. Are we watching it? Yes, and very likely were there to be another incident, employee would be terminated.