We received a search warrant for a ditch association letting us know that the signer has been accused of embezzlement. As far as a SAR filing, if we did the standard 90 days, the dollar amount would be under the SAR filing threshold. But if we went back a year to when the activity started, it would be over $15K. Can we go back that far on a SAR filing?

So, you are saying that a review of your records actually provides you with a suspicion of illegal activity that could have been determined without receiving a subpoena?

The suspicion of illegal activity came with the search warrant. Without it, we would not have known it to be suspicious. The activity never flagged on our ASM.

The search warrant was purely a request for documents and records I assume. If that is the case and after your review you have nothing to base suspicious activity on, then there is no requirement to file just because you got a search warrant or subpoena.

But wouldn't it warrant a SAR that we are now aware of illegal activity (embezzlement)?

You are aware of a request for records and that is all. What illegal activity are you aware of?

Your client has not been convicted of a crime. A court of law does that. You simply have a LE request for records. Millions of these are sent out every year, many which do not lead to a conviction or a charge being filed.

I would concur with Randy in that, based on your assessment of your bank records, if you don't see anything suspicious, you don't file a SAR. The mere receipt of a LE Request should not warrant the filing of an SAR.

I'm in agreement with the others. If you did not find the activity suspicious on review of your records then you shouldn't be filing a SAR when the subpoena comes in. The point of the SAR is to alert law enforcement that you think something isn't right. You getting a subpoena means law enforcement already knows something isn't right.

This is a great question, Shaina. Receiving a subpoena should warrant a review of the related activity, not necessarily the filing of a SAR. If your review of related activity identifies suspicious activity, then you would need to consider filing a SAR.

Agreed

Everything everyone said is correct. However, we've had instances of criminal LE requests for embezzlement and when we reviewed the account, we did indeed find it. Embezzlement often happens through transaction vehicles that don't generate alerts through AML systems, but are clear when someone's looking through that lens, like a treasurer issuing themselves large, even-dollar, uncharacteristic reimbursements. Receiving of a subpoena doesn't mean someone's guilty, but if you know what they're looking for in their request you may find it and make the conclusion it's suspicious.

The OP also asked about the review period. When we conduct a review based on a subpoena, our review period is the same as the subpoena. There's no "standard 90 day" SAR review period that I know of aside from continuing activity.

Granted, if it takes a year's worth of activity to add up to $5,000, it also seems harder to me to conclude it's suspicious.

i'll take a bit of an exception to this...you getting a subpoena means LE "suspects" something isn't right, they do not "know" something isn't right. they are doing their investigation to determine if they can move the status from suspect to know.

Semantics, but you're absolutely correct Happy. However the point I was making is that there is not a need to alert law enforcement if they are already at your door.

The fact that you were contacted by law enforcement or that you know that law enforcement already knows about it, does not impact your legal obligation to file a SAR in any manner. It is plain and simple. A LE request should trigger a SAR investigation. If that leads to your own suspicion based on your records you file, if it does not, you do not.