Crimes and Suspicious Activity Reports

Summary

A Suspicious Activity Report (SAR) is a report regarding suspicious or potentially suspicious financial activity, filed with the Financial Crimes Enforcement Network (FinCEN), an arm of the United States Department of the Treasury. SARs are filed primarily by financial institutions such as banks, credit unions and check cashing establishments.

By far the most common reason for filing a SAR in the US is when a financial institution suspects its customer is trying to structure his transactions in a way so as to avoid a Currency Transaction Report CTR being filed upon him.

Casinos are required to file a separate report called a SAR-C

FinCEN requires a SAR report to be filed by a financial institution when the financial institution experiences

(i) a potential loss (also known as risk or exposure) of $25,000 or more;
(ii) a potential loss of $10,000 or more when a suspect can be identified;
(iii) any potential loss when an employee is involved (such as embezzlement or misuse of position); or
(iv) any transaction or set of transactions that may be deemed suspicious.

Financial Crimes

Types of Reports

A Currency Transaction Report CTR is required under the Bank Secrecy Act for any cash transaction or transactions greater than $10,000 by anyone in a single banking day.

The primary purpose of the CTR is to assist in the prevention of money laundering. Multiple transactions totaling more than $10,000.00 in one banking day must be counted as one transaction, and reported accordingly. Businesses that primarily deal in cash, such as bars and restaurants can be exempted from having their deposits and withdrawals reported as CTRs, although this exemption is rarely granted. Instead, most banks have computer systems which retains the CTR information and allows duplicate CTR's to be created seamlessly.

The Negotiable Instrument Log (NIL) is a document recording the cash purchases of negotiable instruments such as money orders, cashiers checks and travelers' checks totaling from $3,000 to $10,000 that financial institutions must file with the Internal Revenue Service.

Regulations and Guidance

FinCEN announces delayed implementation of certain revised SAR forms that were scheduled to become effective June 30, 2001 - 72 FR 23891

Most Common Errors in SARs

OCC

12 CFR Part 21, Section 21.11 - Suspicious Activity Report

FRB

12 CFR Part 208 (Reg. H), Section 208.62

FDIC

12 CFR Part 353 - Suspicious Activity Reports

353.1 Purpose and scope.
353.2 Definitions.
353.3 Reports and records.

OTS

12 CFR Part 563, Section 563.180 - Suspicious Activity Reports and other reports

NCUA

12 CFR Part 741, Section 741.214 - Report of crime or catastrophic act and Bank Secrecy Act compliance

12 CFR - Part 748 Suspicious Program, Report of Crime and Catastrophic Act and Bank Secrecy Act Compliance

748.0 Security program.
748.1 Filing of reports.
748.2 Procedures for monitoring Bank Secrecy Act compliance
Appendix A Guidelines for Safeguarding Member Information
Appendix B Guidance on Response Programs for Unauthorized Access to Member Information and Member Notice

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