Answer by David Dickinson:You are required to file a SAR for check kiting. Fines may be imposed for not doing so.
Answer by John Burnett:Because an employee is involved, there is no trigger level (zero tolerance). Once you're sure there is a kite going on, you need to act and a SAR filing really isn't optional in such a case.
Don't forget that, in addition to getting cited in an exam report for a violation, the integrity of your suspicious activity review and SAR reporting process can be called into question; the board of directors hears all about it, and the bank could get a cease and desist order. Monetary penalties could also follow, and the bank's ability to expand could be affected.
First published on BankersOnline.com 2/22/10