Top 5 Things Law Enforcement Wants in SAR Reports

One might never read about a Suspicious Activity Report (SAR) in the news. Instead, you might hear about a successful insurance businessman who turned out to be mis-reporting his company’s financials while funneling money through shell corporations to fund his lifestyle. Reading about Chinese money laundering networks moving Mexican cartel money, you might wonder, along with the author, how an investigation can go on for almost ten years and leave the suspects still at large. The source of both such cases is likely the same: one or more SARs. 

A SAR is how financial institutions report suspected money laundering, tax evasion, fraud, or terrorist financing to the government. These reports are protected information that are not discoverable in a court of law. Effectively, the SAR database acts as a tip pool that holds these financial crimes intelligence reports from all over the nation and makes them available to various law enforcement agencies. Thousands of these reports are filed monthly with the Financial Crimes Enforcement Network (FinCEN) where agents can query and use the information to obtain subpoenas, search warrants, and other tools to advance or initiate investigations. 

So, what makes a SAR get noticed? What gives law enforcement what they need to fight crime and create stories like those referenced above? Banks, fintechs, and other financial institutions employ skilled investigators to write numerous reports. It is true that case volume and human fatigue mean that many reports are written as a repetitive, required regulatory exercise rather than as actionable intelligence. Based on dozens of conversations with federal, state, and local law enforcement officials who read and use SARs to investigate money laundering, fraud & other crime, here are five things that turn a routine report into actionable intelligence that helps catch a criminal:

1. Know Your Audience

Who reads reports anyway? Each month, several regionally-based small groups of agents from the alphabet soup of various federal agencies gather to read SARs. At one time, they literally printed out report narratives in stacks and passed them around a table. One would hope they have graduated to laptops. Use plain language. Reading dozens of reports throughout a long workday is more fatiguing if one must interpret complex metaphors, bank jargon, and un-defined acronyms. 

2. Put the Bottom-line Up Front

Report writing should be eye catching. Write the most important thing, the stunning conclusion, as one of the report’s first two sentences. This concept comes from the US Army Writing Style and allows busy readers to immediately triage the document based on its level of immediacy and importance. If there is a suspected crime underlying the transactions, say so in the introduction. That allows a team reviewing SARs to quickly pass the report to the right agency that can act on the information.

3. SAR Keywords

Certain criminal offenses are designated as precursors for money laundering, such as fraud, racketeering, drug or human trafficking, and so on. FinCEN also publishes a list of key terms based on alerts and notices they have published. In both cases, it is important to know the keywords that law enforcement may use to query the database. Using key terms and official titles for offenses is important: using the word ‘fraud’ is not the same as saying ‘someone lied and tricked me into losing money’. The first one shows up in a keyword search that may result in a knock on a fraudster’s door, the second one never gets read.

4. Details, Details, Details

The most common request from law enforcement is to make sure the SAR has the details. Many cases over the years have been cracked wide open by a SAR that listed a home address, known associate, or IP address. Often such information leads investigators to parts of a criminal network that were previously unidentified or completely unknown. This is the way of actionable intelligence: details reveal hidden puzzle pieces with untold value. Be precise, and always delineate facts from opinions: analysis is important but must be identified as such. 

5. Contact Info & Follow-up

The end of every SAR should tell the reader whom to call or email for backup documentation and the file number of the report. This is not a rote exercise. Officers call these numbers, get backup documents, and initiate real cases against devious criminals. As an investigator, start creating a contact list from day one. One never knows when it might be handy to have an email address for a living, breathing FBI agent. 

SAR Takeaways

Compliance reporting for banks, fintechs, and other financial institutions is not just an exercise in keeping regulators at bay. Federal agents constantly stress the usefulness of a variety of compliance forms and reports, especially the SAR. Despite what the internet tells us, law enforcement does not have unlimited resources to watch everyone. Therefore, when it comes time to file an obligatory report, take care to provide as much complete, succinct, and actionable information as possible.