Posted By: AuditorK

SAR? - 09/08/16 02:56 PM

A few months ago, we became aware of an employee that had a large number of cash deposits to his account on almost a weekly basis. When an investigation was done, it was found that this activity had been going on for over a year. The employee was questioned and provided a number of reasons/sources for the cash. A SAR was filed because the reasons made little sense and the employee is treasurer for a local nonprofit that deals with a lot of cash. Since the day of questioning a few months ago, there has been no more cash deposits to the employee's account. We are reviewing the account again, for purposes of the 90 day filing for continued activity, and are wondering if this change in pattern is reason enough to file a second SAR. Any advice?
Posted By: Daisy Doodle

Re: SAR? - 09/08/16 03:08 PM

I wouldn't file based on cessation of suspicious activity. But if your examiner will be satisfied with your reaction to suspicious activity on the part of an employee--that is a separate question IMO. It appears you were unable to allay your own suspicions with the explanations provided.
Posted By: MagicCity

Re: SAR? - 09/08/16 03:39 PM

The employee is still with you?
Posted By: AuditorK

Re: SAR? - 09/08/16 03:46 PM

That is correct, still employed.
Posted By: RockChucker, CAMS

Re: SAR? - 09/08/16 04:42 PM

Wow! I don't know if we would allow that person to stay. Just the fact that the activity stopped after the questioning throws major red flags. Of course I don't have all the details but I might be tempted to reach out to the non profit anonymously.
Posted By: MagicCity

Re: SAR? - 09/08/16 04:50 PM

I would be tempted to file because I think the fact that he stopped the activity speaks volumes.
I believe you can file for no amount and simply state that you find the fact that he has stopped the activity to be suspicious.
If you know anyone in local LE you can perhaps have a quite chat with them?
As a side note, - I have to agree with RockChucker, - I cannot imagine keeping that person on staff.
Posted By: AuditorK

Re: SAR? - 09/08/16 05:53 PM

As far as keeping him on staff...I agree. We got the old "nothing can be proved, it all just looks fishy" and therefore nobody wanted to take action. Legal advised us not to go to the non-profit with our concerns.
Posted By: Elwood P. Dowd

Re: SAR? - 09/09/16 09:30 AM

Legal advised us not to go to the non-profit with our concerns.

Poor moral advice. Perhaps even worse legal advice. If he is embezzling and they ever figure it out, they will also figure it out that your bank knew or should have known. You have the deep pockets and they will want it to be someone else's fault.

I would be happy to testify for the charity about your bank's culpability, no charge.

As for filing a continuing SAR, the activity stopped; you have nothing to report. Regardless, your bank now has an excellent reason to sit down with the employee and ask why the cash deposits stopped.
Posted By: thomasj

Re: SAR? - 09/09/16 12:09 PM

An attorney once advised my bank that a SAR wasn't required since the loan fraud committed by a customer did not result in a loss. I told them it was too late that the SAR had already been filed - and then quickly filed the SAR. I seek legal counsel a lot in my position, but always keep in mind that sometimes that advice may not be correct or in the best interest of the bank.
Posted By: RockChucker, CAMS

Re: SAR? - 09/09/16 06:53 PM

You lied to a liewyer?!?! You naughty boy ThomasJ! wink

You know they don't like to be outdone.