I recently took over the BSA side of my FI's compliance department. While reviewing a personal account that we have been filing SARs on for some time (for structuring large cash deposits, about $66M every 6 months) I noticed the owner/signer on the personal account has been writing large checks to a business account.

When I checked the business account, the individual was a signer/owner. Another series of large checks was then written a company outside of the Bank.

I am somewhat concerned as to the origin of the cash being deposited into the Personal account. I have spoke to a few compliance officers at local FI's and they are split on how to proceed. Some feel I should question the customer on the cash deposits, while others feel that as long as I keeping filing, I have no further requirements.

I have been trying to find some guidance, as something in writing would make this a lot easier since this is a big customer at my FI and Sn. Management is very hesitant to upset them and risk losing the accounts.

Any help would be greatly appreciated.

At some point I'm sure one of your regulators is going to ask why are you keeping this account if you have to keep filing over and over - and if they don't ask then you should ask yourself the same question. IMO you want to make sure that you have done your due dilligence in determining what the source of funds are for that cash that is coming into your institution, and I do not think that the fact that you keep filing for the original structuring covers that. That's just my opinion

We have a customer (large accounts) who has his business associates making trips to his safe deposit boxes on a regular basis (he has several) - they come in with heavy duffle bags and leave with noticeably lighter duffle bags. He knows we file SARs on him and his associates - he has been kind enough to give us heads up when one of his associates will be coming in to make a large cash deposit (usually $4-5 million - in hundreds - and yes I'm glad I don't have to count that). The government knows all about him and we just keep filing SARs.

ummm ... howdoes he know?

... anywho ...

I would do a search on the internet about this outside business ... do you 314(b) share? Does the bank he writes checks to share? Might be able to uncover the money laundering scheme. (or justify everything as legitimate)

All BSA Policies must have a section on when your bank will close an account. The examiners have been very interested in if you follow that policy or not (or at least mine have).

My banks have a type of analysis matrix - if the customer is profitable, we usually keep them. If not, we toss 'em.

If we think they are involved in something really bad (not just plain structuring - but something we could take a loss on) - we close them no matter what.

Is this a big account strictly in a numbers sense, or does someone in Sr. Management actually deal with this guy? Perhaps there's a loan officer or relationship manager that may be able to shed additional light on him?

Both actually. Dollar wise, this customer is our top depositer. He deals directly with Senior Management in almost all manners. He also has a decent sized construction loan with the Bank, along with a LoC. Its really a difficult situation. I have a feeling that Management is leading to keeping the account and to continue filing. However, no final decision has been reached yet.

No, my FI isnt involved in 314B. So that avenue isnt open for me to pursue.

It only takes about 5 minutes to notify FinCEN of your intention to participate in the 314b process. Might be well worth your time.

Nothing the matter with someone speaking to the customer about his deposits. We do it on a regular basis. If the account is managed by a relationship manager or loan loan officer we usually ask them to speak with the customer. If not managed by someine the branch manager is responsible. It's usually approached as a "sales call/ account check up/ we want to understand your banking needs".

We also have developd a procedure that if a customer has more then 3 SAR's filed management receives a report of the account and is asked to make a decision as to whether to close or keep open. They must document their reasoning. This places the accountability with the owner of the relationship and the examiers have been fine with this.

Nothing the matter with someone speaking to the customer about his deposits. We do it on a regular basis. If the account is managed by a relationship manager or loan loan officer we usually ask them to speak with the customer. If not managed by someine the branch manager is responsible. It's usually approached as a "sales call/ account check up/ we want to understand your banking needs".

We also have developd a procedure that if a customer has more then 3 SAR's filed management receives a report of the account and is asked to make a decision as to whether to close or keep open. They must document their reasoning. This places the accountability with the owner of the relationship and the examiers have been fine with this.

Thanks for the input guys. Personally, I would prefer to sit down with the customer, but Management is set agaisnt it unless I can show them something in writing that requires us too.

My best efforts havnt been able to produce anything in regards to this, so it looks like we will just keep filing SARs.