Uncovering Potential Fraud: How Far should your investigation go?

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Question:

During an investigation into possible fraud on a personal checking account, we found that our customer, who is a mortgage broker and receives payments from a mortgage financing company, also deposits personal checks in amounts from $900 to $2700 into the account 2-3 times a month. There are also periodic cash deposits. All the checks are from different persons. Assuming this is a one-time payment from each person, would there be a legitimate reason for the customer to take a fee from a mortgage client and not remit it elsewhere? Do you feel our findings warrant further investigation? How would you suggest we proceed in verifying our suspicions and should the authorities be notified?

Answer:

It sounds a if your customer, at the very least, is trying to hide income. I'd report it as suspicious activity on a SAR, even call the local IRS and provide them with a copy, but I wouldn't investigate further. We're required to report, that's all.

First published on BankersOnline.com 5/5/03