The SAR Activity Review Issue 12 - FinCEN

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Due Diligence
The frequency with which known and suspected Unregistered or Unlicensed Money
Services Businesses were identified is evidence of due diligence and awareness on
the part of the filing industry in recognizing and reporting such entities.
Law Enforcement Support
Several Other types of suspicious activity are regularly indicated and are of
enormous value to specific law enforcement agencies, such as: Tax Evasion;
Fraudulent W-2; Narcotics Trafficking; Currency Smuggling; and Employing
Illegal Aliens.
Reporting Patterns
Filers utilizing the Other fixed-field could have been more accurate and descriptive
by clearly designating a more appropriate category: Wire Transfer Fraud; BSA/
Structuring/Money Laundering; Counterfeit Instrument (Other); Mortgage Loan
Fraud; or Identity Theft.
Moreover, several explanations involved Advanced Fee Scams or the Office of
Foreign Assets Control (OFAC). FinCEN has published guidance related to
Advanced Fee Scams (commonly referred to as Nigerian or 419 Scams). To consult
these guidelines please refer to Issues 4 and 7 of the SAR Activity Review. Access
to this publication may also be obtained via the following link:
http://www.fincen.gov/sarreviewissue4.pdf and
http://www.fincen.gov/sarreviewissue7.pdf.
In December 2004, FinCEN released interpretive guidance concerning reports
filed related to the Department of the Treasury’s Office of Foreign Assets Control
(“OFAC”). Details of this guidance may be reviewed in full via:
http://www.fincen.gov/sarguidanceofac.html.
Conclusion
There can be no doubt as to the all-around usefulness of the wide reporting
discretion offered by the Other characterization box and its descriptive line.
The presented observations not only emphasize this, but also point out how the
Other field can be more accurately used, specifically in those instances where the
type of suspected violation is already offered as one of the other listed summary
characterizations. Choosing the relevant available violation will additionally
make for more accurate numeric tabulations and a better representation of those
summary characterizations.