A non-customer came to one of our branches to cash a check for $9,000. He asked why we needed his personal information and stated he asked our customer to write the check for $9,000 so that he would not be subjected to any "government reporting."

The teller called our customer (A CPA) to verify the issuance of the check. She stated that the non-customer was there to cash a check and before she could say anything else the customer stated he issued him a check for $10,000. The teller advised him the check was only for $9,000. He seemed a litle confused, but authorized the cashing of the check.

We later learned that the CPA's employee changed the amount of the check at the request of the non-customer while the CPA was away on vacation. A facsimile signature was applied to the check. The CPA was very upset to learn that his employee made the change to the check amount without consulting with him.

We believe it was the intent of the non-customer to avoid a CTR, yet none of the boxes on the SAR apply. How should I report this activity?

Secondly, we have been criticized for not reporting all subjects on our SARs. We have no information on the employee that issued the check, so we can't provide information on her. And I'm hesitant to report the CPA as he stated he had no knowledge that the check was issued for $9,000 rather than $10,000 and was very upset when he did find out.

Seems to me that changing the dollar amount on the check would meet the definition of 29b "Alters transaction to avoid CTR requirement." Since you do not consider the CPA a subject, it is appropriate to simply list his info in the narrative. For the unnamed employee, you have the check box in Part I item 2, "if a critical * subject information is unavailable (does not include item 24)." Again, list the information that you do have regarding the unknown subject's employment at the CPA in the narrative.

Brian,

Now that you say it, it does actually make sense to check that box. I was thinking that because he didn't write the check it didn't fit, but it does if we include the employee as a subject.

I would also consider the CPA's employee as a suspect. I would ask the CPA for the employees name.(even if it was not for a SAR)

Better yet I would also like to know where did the extra $1,000 go.

Our branch manager spoke to the CPA about the transaction. He is aware of BSA regulations, so I'm not too keen on asking the CPA for the name of his employee. It might tip him off that we have the intention of filing a SAR.

We are watching to see if a check to the suspect clears the CPAs account through inclearings. He may have just deposited it to his bank (if he received a separate check).

was the check altered? or was a new check issued with a different dollar amount? because it sounds from the description as if a new check was issued if a facsimile signature was applied as described above.

No, the check was not altered. The payee was owed $10,000. He persuaded an employee of the CPA to issue the check for $9,000. The CPA was on vacation and had no knowledge of this happening. that's why he was confused when our staff called to verify that he had issued the check.

Had the planned $10,000 check been issued and cashed there would have still been no CTR...

The star performer in this little circus was still trying to structure a transaction. Just label it attempted structuring and tell the story much as you have told it here. My subject would be the payee and the payee alone.

Just finishing up this SAR. Does everyone agree that the subjects are the payee of the check and the employee that honored his request to change the amount of the check?

Ken,

I had not refreshed my screen and I didn't see your response when I entered my last post. Glad you agree. I'm done with this one!

That's really up to you, as SAR filing is subjective; the most important thing is that you justify and document your conclusions relative to each transaction party's degree of involvement within the narrative. Reason being, I have heard many a horror story of banks receiving findings for not including every financial party linked to a suspicious transaction as a subject unless they were a confirmed victim. While I disagree with those findings, the point remains that it's in your best interest to explain your basis for including or not including as a subject anyone that could reasonably considered one.

Personally, I would put the CPA, check issuer, and the payee as subjects. Remember - "Subject" does not equal "Suspect." I acknowledge that most folks would disagree with that recommendation; however, I tend to employ a minimax strategy towards all aspects of SAR filing.

As others have indicated - additional review may be appropriate. Make sure your investigation goes back a reasonable amount of time to determine if any other checks were issued to the same payee, as that may give you a better idea of how involved the CPA is in structuring the checks. If the payee received multiple checks in a short time frame, that could solidify the role of the CPA. Make sure you also evaluate the source of funds for the payment and determine why the payment was issued.

If you conclude the CPA is involved beyond having his name on the checks, you should reconsider the relationship.