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Question 229

Bob Jones, president of ACME bank, has had a banking relationship with Linda O'Reilly, a local real estate agent for several years. Ms. O'Reilly keeps most of her deposit accounts with ACME and also has had several personal loans there. Over a three-month time period, Ms. O'Reilly consistently (two or three times a week) brings to the bank a series of money orders in amounts ranging from $7,000 to $15,000, made payable to her in denominations of $1,000, and asks the teller to take them and issue one cashier's check payable to her. After this activity has continued for three months, Mr. Jones notices the frequency of cashier's checks issued to Ms. O'Reilly on a management report. It catches his attention because he does not know why Ms. O'Reilly would need this number of cashier's checks.

On inquiry, the head teller explains the weekly transactions. Which of the following statements best describes Mr. Jones's responsibility?

    Correct Answer: C

    Mr. Jones should ask Ms. O'Reilly why she is conducting these transactions and then determine whether to file a SAR. It is important to investigate and understand the reason behind these frequent transactions to assess whether they are suspicious. Directly filing a SAR or CTR without gathering more information could be premature. Thus, inquiring first provides a balanced and reasonable approach to addressing potential issues of money laundering or other suspicious activities.

Discussion
Cam22Option: C

This option acknowledges the need for Mr. Jones to investigate the unusual activity while also giving him the opportunity to gather more information before deciding whether to file a Suspicious Activity Report (SAR). It demonstrates a balanced approach to addressing the situation.