• FinCEN Announces the Release of Issue 16 of the SAR Activity Review
  • October 27, 2009 | Authors: Andres A. Fernandez; Marina Olman
  • Law Firms: Gunster, Yoakley & Stewart, P.A. - Miami Office; Gunster, Yoakley & Stewart, P.A. - West Palm Beach Office
  • Today, the Financial Crimes Enforcement Network (“FinCEN”) announced the release of Issue 16 of the Suspicious Activity Report (“SAR”) Activity Review, Trends, Tips and Issues (“Report”). The Report discusses, among others, the following: (i) new information on mortgage loan fraud SAR filings for the first six months of 2009; (ii) FinCEN’s E-Filing system and (iii) suggestions on preparing and filing SARs, as well as avoiding common errors.

    From January 1 to June 30, 2009, the number of SARs citing Mortgage Loan Fraud (“MLF”) increased by less than 1% when compared to the number of MLF SARs filed during the same period in 2008. The most commonly cited subjects of the MLF SARs were the borrowers, and Florida ranked second among the top locations of the subjects who were reported in MLF SARs.

    According to the Report, as of July 2009, financial institutions have filed over 48 million Bank Secrecy Act (“BSA”) forms through FinCEN’s E-Filing system, and the number of registered users has grown to more than 6,500 institutions. The BSA forms available for filing include: Currency Transaction Reports, Designation of Exempt Person Forms, SARs by Depository Institutions, SARs by Casinos and Card Clubs, SARs by Money Services Businesses and SARs by the Securities and Futures Industries.

    The Report also provides suggestions for preparing SAR narratives. The suggestions include: (i) beginning narratives with a summary sentence to provide the reader a snapshot of the details to be discussed; (ii) noting the supporting documentation available; (iii) providing any known identifiers for other parties identified in the SAR narrative; and (iv) for SARs involving correspondent accounts, FinCEN suggests providing details of all accounts involved including account numbers, names and subcorrespondent account numbers, names and addresses, as well as the actual account numbers and names affected.

    Finally, the Report addresses common errors in SARs, providing as one example the filing of SARs based on a dollar amount that meets or exceeds a certain dollar level. The Report stresses that no dollar amount is suspicious in and of itself, as such, the SAR narrative must explain in detail why a particular transaction is suspicious, not merely that the dollar amount involved meets or exceeds a certain dollar level.

    Another example of a common error includes the filing of SARs which state that the transaction is unusual even though there may be a reasonable explanation for the transaction. The Report provides that filers should make sure that they explain the circumstances surrounding the transaction that lead the filer to believe that it was suspicious.