While bulk cash withdrawals in and of themselves may seem unusual, there are still legitimate businesses and professions that are frequently subject to this scrutiny, but never afforded exculpatory considerations. An initial query by the AML section would have de-risked this customer saving both time and money-two commodities that are precious to law enforcement and financial institutions. The customer was not engaging in criminal conduct, but without initial examination executed by the AML investigators, the customer became falsely labelled as a risk and subject to undue scrutiny by not only the financial institution but now law enforcement. It was just an attempt to obtain the necessary funds as expeditiously as possible. This revelation affirms there was no intent to commit the suspected structuring captured by the monitoring software. The lack of funds at the first branch was the stimulus for subsequent visits to other branch locations and cash withdrawals. The customer needed more cash than could, or would be, provided by the branch. The financial institutions had a posted “cash back” limit below the CTR level. An anxious teller will agree to answer the questions and then, and only then, the investigators will learn that the circumstances behind this “activity” was actually created by the bank and not the customer. Officers will interview a teller as to any knowledge about the customer or if they recall any details with regard to the suspicious transactional activity that was the basis for the SAR in the first place. A secondary officer will then be requested to backup and respond (now without delay) to the first branch location with the lead investigator. Investigators will then invest time-to the detriment of other cases on their desk-to craft a spreadsheet reflective of the suspicious transactional data as well as produce a line of questioning for witnesses and suspects alike. From there, time will pass and when the records are produced, a bill will be attached with an expectation of swift payment. This ripple effect would likely trigger law enforcement to generate a subpoena for records and documents. Multiple SARs could attract the interest of law enforcement. Should this seemingly suspicious transactional behavior occur again, the customer relationship could be subject to termination. Each review will scrutinize the customer’s transactional activity. But what does this first SAR mean? Clearly, this customer will become subject to frequent review. A SAR would be filed on this customer, as there is an appearance of high-risk behavior. At face value, this pattern would appear to be suspicious and potentially unlawful. This pattern often consists of the customer(s) conducting cash withdrawals on the same, consecutive or closely consecutive days at either the same or multiple branches. But what are the ramifications when financial institutions become victims of their own policies that are based on default artificial intelligence rather than due diligence? What are the possible implications of a misinterpretation of otherwise legitimate customer transactional activity? False Positivesįrequently, automated transaction monitoring systems will alert AML investigators when a customer conducts cash withdrawals in a pattern indicative of possible structuring. These reports then spur a chain reaction of events that impact not only the customer, but the financial institution and law enforcement alike. SAR authors who have an overreliance on the results of anti-money laundering (AML) detection/risk assessment software dutifully draft the then required-per-policy SARs. Does overthinking artificial intelligence result in self-inflicted suspicious activity reports (SARs)? Financial institutions not only pride themselves but are obliged to document when consumer activity goes astray.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |