Presenters: Special Agent Crystal Womble Investigative Analyst Marilyn Willis

1. AMLA Mid-Atlantic Chapter Event Presenters: Special Agent Crystal Womble Investigative Analyst Marilyn Willis

2. Topics • Benefits of SARs • Keys to writing complete SAR narrative • Downloads • Supporting Documentation • Examples of cases initiated by SARs

3. INTRODUCTION (WHO WE ARE) The DCFCTF (DC Financial Crimes Task Force) is a working group made up of the United States Attorney’s Office, IRS-CI, HSI, US Secret Service, US Postal Service, the District of Columbia Metropolitan Police Department and other law enforcement agencies The purpose of our working group is to evaluate all SARS filed in the District of Columbia area to determine that those have criminal potential Two key functions: De-confliction 2) Fosters information sharing and cooperation Our group focuses primarily on Code A violations i.e. Bank Secrecy Act, Structuring and Money Laundering

4. DEFINITIONS • SAR – Title 31 U.S.C. § 5318 (g) requires a financial institution to report any transaction that it suspects 1) involves illegal activity, 2)is designed to evade the BSA requirements, & 3)has no business/lawful purpose • CTR – Title 31 U.S.C. § 5313 requires financial institutions to file a Currency Transaction Report for each deposit, withdrawal, exchange of currency or other payments in currency of more than $10,000 by, through, or to such financial institutions

5. REPORTING REGULATIONS • The Code of Federal Regulations requires banks to maintain a record of the SAR and supporting documentation for 5 years from date of the filing • A bank is required to file a SAR no later than 30 days after the date of initial detection by the bank of facts that may constitute the basis for filing a SAR • Federal law requires financial institutions to file CTRs with the Secretary of the Treasury within 15 days of the date on which the reportable transaction occurred.

6. Benefits of SARS • (Bloomberg Article) • Financial institutions help to identify potentially problematic customers or transactions • Assist Law Enforcement with identifying problems and potential criminal activity • Assist with existing cases to identify financial activity

7. SAR Review Teams In Each Of IRS-CI’s 35 Field Offices A Total Of 41 SAR Review Teams Throughout The Country SAR Review Teams & Task Forces in US 94 Judicial Districts 56 Task Forces led by IRS-CI More are being developed All Types Of SAR’s Reviewed, Including Bank SAR’s, MSB SAR’s, Casino SAR’s, Securities and Futures SARs, etc. Nationwide Approximately 300-350 Employees Assigned To SAR-RT’s Three “Lead Development Centers” Now Assigned To Do Proactive Analysis of SAR Data. LDC’s In Denver, Indianapolis & Tampa LDC’s Comprised of Intelligence Analyst & Agents Doing Analytical & Case Development Work Only.

8. SAR Review Teams In Each Of IRS-CI’s 35 Field Offices Since 2006, each year, more than 1 million SARs were downloaded and reviewed. 2012 = 1,117,418

9. SAR Review Teams and Task Forces • Multi-Agency-IRS-CI, FBI, ICE, DEA, USSS, FDIC, USDA OIG • Led by USAO • Meet monthly

10. SAR ‘must-haves’ • Be concise & clear • Provide a detailed description of the known or suspected criminal violation or suspicious activity • Identify the essential elements of information (the 5 W’s) • Be chronological & complete

11. SAR NARRATIVE • The most useful section of the SAR is Part V, the narrative section • The narrative should include the following information: • Who is conducting the suspicious activity • What instruments or mechanisms are being used to facilitate the suspected transactions • When did the suspicious activity take place (list dates) • Where did the suspicious activity take place (list branches/addresses) • Amount involved (list activities) • Why does the filer think the activity is suspicious

12. Who is conducting the criminal or suspicious activity? • Who is conducting the criminal or suspicious activity? Describe additional details about the suspect(s) other than those provided earlier in the SAR form (Part I for SAR-MSB, SAR-SF & SAR-C or Part II for the depository institution SAR) : • Employer & occupation information • Relationship between the suspect & the filing institution • Length of the financial relationship 12

13. Whatinstruments or mechanisms facilitate the suspect activity/transactions? Identify & describe the transactions raising the suspicions of the financial institution. Examples include: • Cash deposits and/or withdrawals • Checks & other monetary instruments (money orders; traveler’s checks; cashiers or bank checks)

14. Whendid the criminal or suspicious activity occur? • If a one-time occurrence, identify • the date • If a pattern of activity occurred over a span of time, state when the activity first initiated and then describe the activity during the duration • Identify when the activity was detected

15. Wheredid the suspicious activity take place? • Identify the branch/department location or locations within the institution where the activity occurred (name of branch, the street address for each, where in the branch (ATM, teller, etc.) • Identify all account numbers & types • of accounts affected by the • transactions/activity • Indicate if suspect transactions involve • other domestic or international banks & • identify the banks, their locations, • account numbers, etc.

16. Why does the institution think the activity is suspicious? • First, describe the filer’s type of institution (i.e., XYZ Bank is a commercial bank with 400 branches located in 5 northeastern states; Send Money Quick is an international money transmitter with five offices in metropolitan Pretend City; We Make U Money is a securities broker, etc.)

17. Why does the institution think the activity or transaction is suspicious (cont.)? • Next, describe concisely but fully, why the institution considers the activity as suspicious • Be sure to include any relevant information about suspicious customer activity that the institution has in its files at the time the SAR is filed

18. Howdid the suspicious activity occur? • In a concise, accurate and logical manner, describe how the suspect transaction or pattern of transactions were completed • For account activity, provide as completely as possible an explanation of the cycle of funds including the source of the funds in the account & application of those funds

19. Additional Thoughts… • Remember to identify the teller or bank representative who spoke with customer • Narrate conversation with customer and response • If gave them CTR brochure, note that & maintain in file • Remember to save tape if possible • Identify transactions in narrative separately • Closure • Balance

20. 1. The Introduction • Provide a brief statement of the SAR’s purpose • Generally describe the known or suspected violation • Identify the date of any SARs previously filed on the subject & the purpose of that SAR • Indicate any internal investigative numbers used by the filing institution to maintain records of the SAR

21. 2. The Body • Provide the relevant facts about all parties facilitating the suspect activity or transactions Answers: Who? • Identify all involved accounts and transactions in chronological order by date and amount – do not use or insert tabular objects, tables, or pre-formatted spread sheets Answers: What, Where, and When?

22. 2.The Body (cont.) • Explain in detail the filer’s position that the activity or transaction is illegal or suspicious Answers: Why? • Describe the method of operation of the subject: Answers: How?

23. 3.The Conclusion Summarize the report & include: • Any planned or completed follow-up actions by the institution • Names & telephone numbers of persons with additional information about the reported activity • Location within the institution where all SAR-related records are maintained

24. Supporting Documents • Requests process • Phone call • Fax • Secured Email (preference) • Documents to include • Mandate by BSA • Specific requests • Bank statements, signature cards, videos, deposit/withdrawal slips • Electronic responses preferred

25. Downloads • SAR database • Monthly • Formatted for distribution • Volume