SAR Filing Scenarios: Identifying and Reporting Suspicious Activity
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Key Insights
- Master the art of Suspicious Activity Report writing through real-world scenarios — structuring, layering, trade-based ML, and crypto red flags.
When to File a SAR
Under the Bank Secrecy Act (BSA), financial institutions must file a SAR when they know, suspect, or have reason to suspect that a transaction:
- Involves funds derived from illegal activity
- Is designed to evade BSA reporting requirements (structuring)
- Lacks a lawful purpose or is unusual for the customer
- Involves use of the institution to facilitate criminal activity
Filing thresholds:
- Transactions ≥ $5,000 involving suspected criminal activity
- Any amount for certain offenses (money laundering, terrorism)
- $25,000+ if suspect is unknown
Scenario 1: Structuring
Pattern: Multiple cash deposits just below the $10,000 CTR threshold.
Red flags:
- Multiple deposits of $9,000-$9,999 within a short period
- Deposits at different branches or ATMs
- Customer appears to receive cash from multiple sources
- Customer is evasive about the source of funds
SAR narrative example: "Account holder made 7 cash deposits between [dates] totaling $67,400, with individual deposits ranging from $8,500 to $9,800. Deposits were made at 3 different branch locations. When asked about the source, customer stated 'tips from work' but employment records show monthly salary of $3,200."
Scenario 2: Layering through Shell Companies
Pattern: Rapid movement of funds through multiple corporate accounts with no apparent business purpose.
Red flags:
- Wire transfers between related entities with no clear commercial reason
- Companies registered in secrecy jurisdictions
- Nominee directors or shareholders
- Funds flowing in circles (A → B → C → A)
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Feynman Concept Cards
Master each building block: read the ELI5, explore the analogy, work the example, find your gaps, teach it back, build it.
Bank Secrecy Act is a concept in regulations. In simple terms, Bank Secrecy Act covers regulatory frameworks in Compliance. This compliance concept addresses key topics in the regulatory frameworks in compliance domain. Also known as: BSA, Currency and Foreign Tr
Analogy
Example
Find Gaps
Explain Bank Secrecy Act as if teaching a colleague who is new to regulations. Cover: what it is, how it works, and why it matters.
Create
Create a diagram that demonstrates Bank Secrecy Act in a real-world regulations scenario. Walk through your design decisions.
Show solution
A diagram for Bank Secrecy Act should include: 1. The core components of bsa 2. How they interact 3. Expected outcomes or outputs
Suspicious Activity Report is a concept in sar str. In simple terms, Suspicious Activity Report covers suspicious activity reporting in Compliance. This compliance concept addresses key topics in the suspicious activity reporting in compliance domain. Also known as: SA
Analogy
Example
Find Gaps
Explain Suspicious Activity Report as if teaching a colleague who is new to sar str. Cover: what it is, how it works, and why it matters.
Create
Create a flowchart that demonstrates Suspicious Activity Report in a real-world sar str scenario. Walk through your design decisions.
Show solution
A flowchart for Suspicious Activity Report should include: 1. The core components of sar 2. How they interact 3. Expected outcomes or outputs
Feynman Synthesis — Prove You Understand
1. The One-Pager
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2. The Gap Map
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Knowledge Check
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Hands-On Lab
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SAR Filing Simulator
AdvancedYou observe the following over 10 days on one business account: eight cash deposits of $9,000–$9,950 from different branches, immediately followed by wires to a shell-company account in a high-risk jurisdiction. Draft a Suspicious Activity Report (SAR).
Flashcards
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