The Justice Department has recommended that bank employees snitch on customers attempting to withdraw more than $5,000.
Federal regulations already require banks to submit a “Suspicious Activity Report” (SAR) when, “Transactions conducted or attempted by, at, or through the bank (or an affiliate) and aggregating $5,000 or more…” according to the handbook for the Federal Financial Institution Examination Council.
The banks are required to fill a certain number of SAR reports every month. This forces them to file SARs for perfectly legal actions (such as withdrawing cash).
If using the banks as snitches, by having them file SARs on bank customers withdrawing over $5,000 dollars cash wasn’t intrusive enough, now the feds are advocating that bankers actually call law enforcement themselves.
The U.S. Justice Department’s criminal head said banks may need to go beyond filing suspicious activity reports when they encounter a risky customer.
“The vast majority of financial institutions file suspicious activity reports when they suspect that an account is connected to nefarious activity,” said assistant attorney general Leslie Caldwell in a speech last Monday, according to prepared remarks.
“But, in appropriate cases, we encourage those institutions to consider whether to take more action: specifically, to alert law enforcement authorities about the problem.”
The remarks indicate that banks may be expected to do more than just file SARs, a responsibility that itself can be expensive and time-consuming.
Some banks already have close relationships with law enforcement, said Kevin Rosenberg, chair of Goldberg Lowenstein & Weatherwax LLP’s government investigation and white collar litigation group. Ms. Caldwell’s remarks “speak to moving forward in a more collaborative way,” said Mr. Rosenberg.
A tip-off from a bank about a suspicious customer could lead law enforcement to seize funds or start an investigation, Ms. Caldwell said.
Don’t think for a moment that the government won’t potentially utilize this as a means of simplifying the seizure of property from innocent people with zero due process.