Money Laundering, Terrorism & Financial Institutions
Published by Civic Research Institute, civicresearchinstitute.com
 
USA PATRIOT ACT MONITOR NEWS RELEASES

USA PATRIOT Act Monitor News Release: SAR Activity Review and IG Report
3/3/2003 6:22:47 PM Eastern Standard Time

The fifth installment in FinCEN's series, The SAR Activity Review: Trends, Tips & Issues, appeared on the agency's website, www.fincen.gov , on February 27.   In addition to updating the usual statistics, this Review has an extended discussion of terrorist financing.  The number of SAR filings for 2002 has not been tallied, since statistics are missing for November and December, but as of October the total was 224,232, already more than all of 2001, where the total was 203,538.  The total for 2002 can be expected to be close to 275,000.  Some states--Arizona, Illinois, Indiana, Kansas, Maryland, Nebraska--showed significant increases, though others showed slight decreases.  California, New York, Florida, Texas, and Illinois, in that order, had the most filings, with California accounting for almost a quarter of the filings in the country.  Over 70,000 SARs were sent to federal law enforcement agencies in the first ten months of 2002, about half of them to the FBI, but nearly 14,000 to the IRS and over 11,000 to the Secret Service.  Referrals were also made to state and local police departments and prosecutors.  Most SARs identified suspects as customers of reporting financial institutions, but some institutions reported on accountants, attorneys, and appraisers.  Over 10,000 reports concerned employees, officers, and shareholders. The value of the Review's statistics is somewhat called into question by a report released in December by Treasury's Office of Inspector General, FinCEN: Reliability of Suspicious Activity Reports (OIG-03-035, December 18, 2002).  The IG's report details frequent failings in SAR filings, as well as problems in processing by independent keying contractors and the IRS Detroit Computing Center.  The IG and FinCEN disagree on whether failings in the SAR System might merit designation as a material weakness under the Federal Manager's Financial Integrity Act.  These developments will be discussed in detail in the March issue of the USA PATRIOT Act Monitor.


 

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