SAR or Not to SAR? That is the question

Posted By: confubanker

SAR or Not to SAR? That is the question - 10/25/17 09:15 PM

Customer requests a $2500 loan for debt consolidation today.

Loan officer remembers doing a $3,000 debt consolidation loan for this customer 3 months ago for a 3 month term (said loan has been paid off). Loan proceeds were deposited into customer's checking account. LO tries to verify any debt consolidation paid out from the checking. No debt payoff found, but noticed that customer has withdrawn $22,000 cash within last 5 months. Loan officer runs customer's credit and did find that the customer paid down a credit card $4,000 since the last time the credit bureau was ran 3 months ago. Thus, no proof if loan proceeds were used for intended purpose or not (hopefully lesson learned by LO).

LO asked customer which creditor was going to be paid with this loan. The customer stated that really the money is for carpet.

Upon questioning the customer regarding the $22,000 cash withdrawals in the last 5 months, it was determined that he is a victim of Financial Elder Abuse. The customer was needing the loan so that "Jane Doe" would be able to come into town. The customer has been withdrawing cash below BSA recordkeeping requirements and depositing the cash into the account of "Jane Doe" at XYZ Bank.

Question - In the SAR for "Jane Doe" - do I reference anything in regards to the fraudulent loan request since it was going to be used to supply her with more cash?
Question - Since the Loan request was only $2500 - do I just do a SAR Not Filed?

Any help would be appreciated, it gets confusing when it all ties together and knowing when and how to separate it.

Thanks!
Posted By: Daisy Doodle

Re: SAR or Not to SAR? That is the question - 10/25/17 09:34 PM

1. I would definitely mention the loan because it kicked everything off. The story would be odd without it.
2. I would use the total of the loan plus the cash outs. Not below threshold unless you have no info about Jane Doe, in which case you have an argument to apply the $25,000.00 threshold. However, if you allow him to continue, that won't last long.
Posted By: RockChucker, CAMS

Re: SAR or Not to SAR? That is the question - 10/26/17 03:56 PM

I concur with Daisy.

I would also recommend providing the customer with some material on Elder Financial Abuse and "Romance Schemes" as a courtesy.
Posted By: confubanker

Re: SAR or Not to SAR? That is the question - 10/26/17 04:11 PM

In this situation - should I also do a SAR not filed on the customer due to the misrepresentation of loan purpose?
Posted By: Daisy Doodle

Re: SAR or Not to SAR? That is the question - 10/26/17 04:15 PM

It appears your two responses are recommending a 'file' to include the loan, therefore not clear on why you would do a 'not file'. I assume you mean by that documenting your reasons for not filing a SAR.