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Better Safe Than SAR-less

WHEN FINANCIAL INSTITUTIONS file suspicious activity reports (SARs)—which they must do when they identify certain questionable transactions—they often hear nothing about them ever again. But these documents aren’t dumped into an oblivion à la the vast storehouse to which the ark of the covenant is destined in Raiders of the Lost Ark.

Instead, these reports are being used to aid FBI investigations of terrorists. “Your SARs are helping,” asserted G. Clayton Grigg, unit chief of the FBI’s Proactive Data Exploitation Unit, Terrorist Financial Operations Section, at a recent conference on money laundering.

SARS, once the exclusive domain of the U.S. Treasury’s Financial Crime Enforcement Network (FinCEN), are now being integrated into the FBI’s computer system so that suspicious financial activity can be immediately cross-referenced with other investigative data, explains Grigg. Names, account numbers, phone numbers, and other data are being electronically culled from SARs and other financial-reporting documents and run against existing FBI terrorist data, bringing up significant hits. “We’re finding bank accounts we didn’t know existed,” he says.

Griggs told attendees at the money laundering conference that his unit electronically compared 71 million SARs and Currency Transaction Reports (CTRs) with existing FBI terrorism data to get a sense of how much potential overlap exists between the data. “Our review identified over 88,000 SARs and CTRs that bore some relationship to subjects of terrorism investigations,” he said.

Of the transaction reports that were related to terrorism, 64 percent were for cash deposits of less than $20,000. Conversely, three-quarters of withdrawals were for more than $20,000.

The unit is now looking at how much of the SAR and CTR data the FBI was already aware of. For example, the FBI is looking into the types of SARs being reported versus the type of investigations they relate to. A next step is to plot these SARs on a map of the United States.

There is a massive amount of data for investigators to sift through. The number of SARs filed has been increasing steadily since they were first mandated—with about 40,000 per month being filed nowadays—according to Michael Deluca, senior specialist in the Division of Analytics at FinCEN’s Office of Regulatory Support. That figure has inexorably climbed since the introduction of SARs in 1996, during which about 6,000 were filed per month.