Welcome. The New SAR Form What You Need to Know

Transcription

1 Welcome The New SAR Form What You Need to Know Carl F. Twigg Jr. Senior Examiner, Federal Reserve Bank of Richmond Jennifer K. White Senior Analyst, Board of Governors of the Federal Reserve Christopher Waskey Special Agent, IRS Criminal Investigation 1

2 OBJECTIVES Part I: BSA E-Filing System Part II: The Revised SAR Form Part III: SAR Matters From a Law Enforcement Perspective Task Force SAR Narratives Benefits of New Format 2

3 PART I BSA E-Filing System 3

4 What is E-Filing? BSA E-Filing Important Dates July 1, 2012 Mandatory E-Filing of all SARs, CTRs, DOEPs and RMSBs March 31, Mandatory use of the new SAR and CTR E-Filing help desk: (option 1) 4

5 PART II The Revised SAR Form 5

6 The New FinCEN SAR Beginning April 1,, the new FinCEN reports must be used. Legacy versions of reports may not be uploaded into the E-Filing system after March 31,. New report is only available through the BSA E-Filing system. Reports may not be submitted in paper format. 6

7 The New FinCEN SAR There are no proposed changes to the regulatory reporting criteria for information collection. FIs will continue to follow the regulation, interagency guidance, and filing instructions to determine when a report should be filed and what information should be included on the report. 7

8 Financial Institution Guidance FIN-2012-G002 Filing FinCEN s new Currency Transaction Report and Suspicious Activity Report Developed in consultation with staff of all the financial institution supervisory agencies Addition of new and expanded data elements does not create an expectation that FIs will revise programs, or develop new programs, to capture information that reflects the expanded lists 8

9 Features and Advantages of the FinCEN SAR Filing Instructions FinCEN has clarified and expanded the SAR filing instructions to be interactive and field specific. Users are now able to place the mouse cursor over any field for the instructions to become visible and obtain detailed information about how to complete any particular field. 9

10 Features and Advantages of the FinCEN SAR Critical Fields Critical fields are those minimally required data fields necessary for the processing of the report by the BSA E- Filing system. Critical fields are easily recognizable by their yellow background and asterisk. 10

11 Features and Advantages of the FinCEN SAR Critical Fields The BSA E-Filing System will not accept filings when critical fields are left blank. Examples of some critical fields: 11

12 Features and Advantages of the FinCEN SAR Critical Fields Now feature an Unknown box. Users will no longer have to enter responses such as unknown, not applicable, or xx in critical fields. The unknown box can be checked when the information is not known or unavailable. Non-critical fields may be left blank when the information is not known or unavailable. 12

13 Features and Advantages of the FinCEN SAR Attachments Filers are now able to attach.csv files, which are suitable for documenting transaction records that are too numerous to record in Part V. The attachments are not a substitute for the narrative. Confidentiality rules apply to attachments. 13

14 Features and Advantages of the FinCEN SAR FinCEN created the new SAR as a uniform report that can be used by any type of financial institution. 14

15 Features and Advantages of the FinCEN SAR FinCEN SAR Sequences: Step 1: Part IV - Filing institution contact information Step 2: Part III - Information about the financial institution where the activity occurred Step 3: Part I - Subject information Step 4: Part II - Suspicious activity information Step 5: Part V - Narrative 15

16 Features and Advantages of the FinCEN SAR The FinCEN SAR allows the addition of multiple subjects, account numbers, etc. Part III may be auto-populated with the simple click of a button. 16

17 Features and Advantages of the FinCEN SAR Suspicious Activity Characterization Revised to include additional types of suspicious activity More than one box may be checked When completing item 29 through 38, check all that apply 17

18 Characterization of Suspicious Activity Examples: 18

19 Characterization of Suspicious Activity 19

20 Getting Started When uploading a previously saved report or utilizing a template, click on Open Existing Form. 20

21 Getting Started When completing a discreet filing or setting up a template for the first time, select Open New Form. 21

22 File Name and DCN/BSA Identifier 22

23 Financial Institution Contact Information 23

24 Financial Institution Contact Information 24

25 Financial Institution Contact Information 25

26 Financial Institution Contact Information 26

27 Financial Institution Contact Information 27

28 Law Enforcement Contact Provide Law Enforcement Contact Information 28

29 Information Where Activity Occurred 29

30 Branch Activity If the suspicious activity occurred at a branch or an office, complete this section of Step 2. Selling Location Paying Location Both 30

31 Subject Information 31

32 Suspicious Activity Information Dollar amount and date range of activity Amount involved in this report Date or date range of suspicious activity Cumulative amount of continuing activity reports 32

33 Prohibited Words and Phrases in SAR Fields a. AKA j. SAME AS ABOVE b. COMPUTER GENERATED k. SEE ABOVE c. CUSTOMER l. SEE NARRATIVE d. DBA m. SIGNATURE CARD e. NON CUSTOMER n. T/A f. NOT APPLICABLE o. UNKNOWN g. NONE p. VARIOUS h. OTHER q. XX i. SAME 33

34 Questions 34

35 What Examiners Want to See Quality of Content Critical fields New to bank filers Can t be left blank Accurate Information to the extent it is known Complete, thorough and clear narratives 35

36 PART III SAR Matters from a Law Enforcement Perspective 36

37 SAR Task Force Goals Develop criminal cases Disrupt criminal activity with the use of civil seizure warrants Obtain compliance with BSA laws Address bank concerns on BSA laws Provide training to law enforcement on BSA laws 37

38 SAR Selection Process Team reviews ALL downloaded SARs for the region SARs involving over $50,000 and a strong deposit pattern are selected for review SARs involving over $100,000 are considered for criminal cases Other selection information: (Employment, Multiple branches, Source) 38

39 Investigative Process Request back-up documentation Conduct additional online/background research Conduct teller interviews Subpoena additional records 39

40 Case Resolutions Notification of Law Referral Subject Interview Execution of seizure warrant(s) Execution of search warrant(s) 40

41 Questions 41

42 Structuring (Title 31) Strong pattern of cash deposits Knowledge of reporting requirement and avoidance of form Use of multiple branches, transactors, or accounts Splitting deposits between banking days (before/after 2pm) or consecutive day deposits Deposit take-backs 42

43 Narrative Misconceptions Narratives don t get read Key buzzwords we look for Small total dollar amounts don t matter Need to list lots of transaction data Reoccurring activity means no one is doing anything about it 43

44 Narrative Keys for Law Enforcement Eliminate unnecessary information Legal disclaimers, detailed transaction info, reiterated info Detailed explanation of activity why is there a need for a report? Describe contact with subject Statements to teller, notification of law Include other accounts if possible 44

45 Example of a Bad SAR The business is a business. The customer appears to be structuring. The total cash deposits are $. 45

46 Other Suspicious Activity Mortgage Fraud ID Theft/Tax Refund Fraud General Tax Fraud WTH What the Heck? 46

47 Benefits of the New Format: New SAR Format We will get reports more timely (hopefully) Reports will be more uniform across industries and institutions Attachment feature should greatly reduce narrative clutter 47

48 Contact Information for SAR Matters Richmond Area Special Agent Dave Ulmet (804) Tidewater Area Special Agent Christopher Waskey (757)

49 Key Takeaways Quality of SAR content Accurate Information to the extent it is known Complete, thorough and clear narratives Ask your regulator and/or FinCEN questions Develop good relationships with law enforcement 49

50 Questions 50

51 Biographical Information Carl F. Twigg, Jr. is a senior examiner and BSA Specialist in the safety and soundness division of Supervision, Regulation and Credit at the Federal Reserve Bank of Richmond. Twigg spent 15 years in the military and civilian police departments before joining the Federal Reserve. For the past ten years, Twigg s focus has been on community bank BSA/AML programs. He has also assisted in AML program development for developing countries in conjunction with the Financial Services Volunteer Corps. Christopher Waskey is a Special Agent with the Internal Revenue Service Criminal Investigation in Hampton, Virginia, and has been so employed for 11 years. His responsibilities include the investigation of possible criminal violations of the Bank Secrecy Act (Title 31), the Money Laundering Control Act (Title 18), the Internal Revenue Code (Title 26) and related offenses. Waskey has worked numerous cases involving tax evasion, money laundering, mail/wire fraud, structuring and other crimes and he is currently assigned to the Richmond Tidewater Financial Compliance Task Force which focuses on the review of suspicious activity reports. 51

52 Biographical Information cont d Jennifer White is a Senior Financial Analyst in the BSA/AML Section of the Board of Governors of the Federal Reserve System in Washington, DC. In that role White works with Reserve Bank and Board staff to oversee BSA/AML examination practices and aids in the development and implementation of examination policies and procedures. She also assists in the analysis and development of appropriate enforcement actions involving BSA/AML related policy matters for banking organizations supervised by the Federal Reserve. Prior to joining the Board, White worked for six years at FinCEN. Her main role at FinCEN was to manage the Bank Secrecy Act Advisory Group (BSAAG) and its ten subcommittees. Prior to FinCEN, she worked as a Compliance Assistant at a small Maryland savings bank. 52

53 Contact Information Donna Kitchen Hampton Roads Bankshares, Inc Elaine Yancey Federal Reserve Bank Richmond Carl Twigg Federal Reserve Bank Richmond Jennifer K. White Federal Reserve Board Christopher Waskey Internal Revenue Service

54 Thank You 54