Account activity related to efforts to evade paying child support, hide assets from a spouse or dodge a tax lien could warrant a suspicious activity report, even if the funds involved are ostensibly of legal origin, say former and current compliance officers. While that may be the case and law enforcement can benefit from a suspicious activity report (SAR) that identifies a person trying to skirt a tax lien or court ordered payment, the work it takes to file them can require more than 50 percent of a compliance staff's resources, say Bank Secrecy Act officers. In addition, some anti-money...
Poorly thought out responses to law enforcement requests for additional information on suspicious activity can end up exposing banks to civil lawsuits or regulatory actions, according to compliance professionals.
As lawmakers and banking compliance professionals turn their attention to the burgeoning credit crisis, the Federal Deposit Insurance Corp. has issued a dozen Bank Secrecy Act-related enforcement actions, serving to warn institutions not to skimp on their anti-money laundering efforts.
FinCEN, which drew its conclusions from a review of filings mostly from money service businesses, said other common errors included missing or inaccurate identifications, telephone numbers, Social Security numbers and other data.
Insurers were on pace to file 280 for the year ended this month, according to a FinCEN study issued last week. That compares with 5,723 SARs submitted by money services businesses in 2002, and 4,267 by securities and futures dealers in 2003, the first years those industries had to file the reports.
The total number of suspicious activity reports filed since SAR reporting was mandated for U.S. banks in 1996 is nearing 1.2 million, with almost half of these reporting Bank Secrecy Act, structuring and money laundering violations.