Introductory BSA/AML Examiner School, Atlanta, CA

Bank of Smithville USA

Page 12

$10,322.43. Each cashier’s check was payable to the same payees. To date, each cashier’s check remains outstanding. Example 6 On June 5, 2015, a customer purchased seven cashier’s checks, totaling $156,906.86, with proceeds from a First National Bank of Georgia savings account, a CSB checking account, and the closure of four CSB certificates of deposits. Each cashier’s check was payable to the purchaser. To date, each cashier’s check remains outstanding. The manner in which the transactions were conducted appears to have no business or apparent lawful purpose. BSA Officer Marks concurred that these transactions, along with others, appeared to be conducted with no business or apparent lawful purpose. She began establishing cases for these items during the on-site portion of the examination. Failure to file SAR for transactions designed to evade BSA regulations Section 353.3(a)(4)(ii) of the FDIC Rules and Regulations requires, in part, that a covered financial institution must file a Suspicious Activity Report (Form FDIC 6710/06) for transactions aggregating $5,000 or more if the covered financial institution knows, suspects, or has reason to suspect that the transaction is designed to evade any regulations promulgated under the Bank Secrecy Act. Transaction testing during the review identified seven separate instances of customers utilizing cashier’s checks that appear to be designed to avoid the submission of CTRs. Three have been included as examples. Example 1 On March 4, 20XX, a $28,500 SunTrust Bank official check was negotiated and used to purchase three $9,500 CSB cashier’s checks. Each cashier’s check was remitted by and payable to the purchaser. To date, each cashier’s check remains outstanding. The checks appear to be issued in a manner designed to evade BSA reporting requirements. Management created a case on July 26, 20XX. Example 2 On March 24, 2014, a $20,583.55 check, remitted by an estate, was negotiated and used to purchase four $5,000 CSB cashier’s checks, each remitted by and payable to the purchaser. The remaining proceeds were used to pay $30 in fees and take $553.55 cash. To date, each cashier’s check remains outstanding. The checks appear to be issued in a manner designed to evade BSA reporting requirements. Management created a case on July 26, 20XX. Example 3 Since at least 2015, a BOS customer has been negotiating and purchasing official checks in a manner that appears be designed to evade BSA reporting requirements. On March 16, 20XX, five cashier’s checks, each in the amount of $9,500 were purchased. The checks were purchased with five $9,500 cashier’s checks drawn on CSB, and each dated April 20, 20XX. Further