SAR aggregate question

Customer deposits $500,000 cash over a period of time (say 2 months). During that same time, checks clear for $500,000 (on us checks cashed by the customer at another bank). Is the aggregate total on the SAR $500,000 or $1 Million?

It depends on what amounts you consider suspicious. If just the cash deposits are unusual then report $500,000.

If you suspect kiting, you will aggregate both ins and outs ($1 mil in your scenario).

How much was involved in the kite? I would say $500,000 not $1 million. I'm not aware of banks adding both the deposits and withdrawals together when calculating the amount of money involved in a kite??

I believe guidance came out that said we should aggregate.

Hmmm.... Maybe. I looked through all the SAR Activity Reviews and didn't see any guidance. Maybe through some other channel??? I'm not saying that I'm 100% sure on this, just what I have normally witnessed and if you have a reference I would be interested.

Okay, okay, much too controversial of a question (customer was cash kiting). I'll file with the cash deposit portion on the SAR and mention aggregate to include inclearing checks in the narrative.

I agree with BrendaC & Magic City. $1 million is your total

I don't mind that you agree, but can anyone find any definitive guidance? Otherwise we could all just agree to agree and then all be dead wrong together.

We file electronically and they provide a help button when you scroll over each field. On the amount field, it says the following:

"An aggregated total of all transactions or multiple or related suspicious activities by the same individual or organization within the same reporting period may be shown in this field. The break-out of this total may then be listed in Part V (the narrative)."

Hope this helps.

I thought there was a similar thread about this not too long ago where the conclusion was that if both the debits and credits were considered suspicious (as in the case of a kite), they would be added together (and I thought someone posted some guidance), but I can't find it for the life of me, so maybe I'm just making that up. I'm really glad it's Friday.

That's my understanding too, Deena. I can't find it either!

Maybe you are referring to this thread?

If so, there was no difinitive answer there either, same back and forth really.

Similar question... Would I aggregate these amounts?

Customer deposits $9,900 in cash. The next day he sends a foreign wire for $9,900. Is the SAR amount $9,900 or $19,800?

We don't aggregate ins an outs for CTRs, right? So why would we aggregate ins and outs for SARs? Isn't it the same money?

Here is something:

Do We Fill Out a SAR on a Suspected Check Kiter
Answer by David Dickinson, BOL Guru
Guru Bios

Question: I have a business customer that I suspect is kiting. She makes deposits to the one account with us from other accounts (different business names, tax IDs) that she has with another bank. She is consistently on our NSF report and Suspect Kiting report. These checks are what she deposits to cover her NSFs. Should I make out a Suspicious Activity Report on this customer?

Answer: Absolutely, if the deposits and withdrawals aggregate more than $5,000.

Perhaps it's the same money, but I have two different transactions. In your CTR comparison, let's say a customer deposits $15,000 in cash in the morning and withdrawals $12,000 in cash in the afternoon. You'd file the CTR for $15,000 in and $12,000 out, right? You wouldn't add them together ($27,000) nor would you cancel them out ($3,000). Both transactions, since they meet the reporting threshold, are accounted for even though it's the "same money".

My situation has two different transactions that occurred a day apart, and I feel that both are suspicious. Had the customer simply used the cash to purchase the wire in one transaction, I would only file for $9,900. I chose to file my SAR for $19,800, so I hope that was right.

Hmm, to confuse even more, if you view them as separate situations, maybe you actually have two SARs Kelsey D.

Either way, you have covered all your bases and filed which encompassed both situations. An examiner may recommend you do it differently - no aggregation, two SARs, something other; but the fact is you filed. If the situation is properly described my guess is it won't be a major issue.

Did anyone find a definitive answer to this one? If I add up the deposits, I am just under $5,000. If I add up the debits and credits (it's a suspected kite), I am, obviously, over $5,000. Do I SAR or not?

I don't think you are going to find any "official" guidance on whether to aggregate debits and credits in a kiting situation. We do it. That's because the regulation says you should report suspicious transactions. In our mind, the deposited checks are worthless and suspicious, and the checks written on the account in relation to the kite are worthless and suspicious. Therefore, you have two separate transactions and would aggregate them. We have gone through a few exams where the examiners and outside auditors have reviewed some of these SARs, and I have convinced them that we are right. Neither has raised any further questions.

And if you should not be adding the checks written and checks deposited, the worst that could happen is that you'd file a SAR for activity that might not hit the $5K trigger. That's not a problem, aside from the effort expended.

My theory (unsupported by official comment) has always been that the nature of a kite dictates that the debits and credits are of roughly equal amounts and rise continuously over a period of time. Pick one or the other, but I cannot advocate both. My concern is focused on the fact that the checks deposited in my bank are not supported by any available funds; I would use the aggregate amount of the funds deposited.

However, I think the true answer is the square root of the number of angels who can sit on the head of a pin, Below $5,000 it's relevant. Above that, it's not.

Thanks all!