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Question 228

Martha Whitmire, the BSA Compliance Officer for First National Bank, is responsible for monitoring the bank's daily currency activity and wire transfers, for compliance with information retention and reporting requirements. Ms. Whitmire notices during her review on March 10 that, during the previous two weeks, a transaction occurred on the same account several times during the week. The activity appeared at one branch office as cash deposits in dollar amounts under the reporting thresholds. Ms. Whitmire discusses this activity with the branch manager and determines that this same deposit activity occurred several times during the previous six weeks. She then conducts a more extensive examination of the account's activity for several months and discovers that cash deposits were made at one branch office and purchases of bank cashiers checks were made by withdrawals from the same account at a different branch office. All withdrawals and purchases of cashier's checks were for the identical amount as the cash deposits. Which statement best describes Ms. Whitmire's responsibility?

    Correct Answer: D

    Ms. Whitmire's responsibility is to report the account activity as suspicious account activity and recommend that a Suspicious Activity Report (SAR) be filed. The pattern of cash deposits below reporting thresholds followed by withdrawals and purchases of cashier's checks in identical amounts is indicative of structuring, a method commonly used to evade currency transaction reporting requirements. This activity is suspicious and potentially linked to money laundering or other illicit activities. Therefore, the appropriate action is to file a SAR in compliance with the Bank Secrecy Act regulations.

Discussion
Cam22Option: D

The correct answer is D. Report the account activity as suspicious account activity and recommend that a SAR be filed. Ms. Whitmire's discovery of structured transactions—cash deposits made under the reporting thresholds followed by withdrawals for the purchase of cashier's checks in identical amounts—suggests an effort to avoid triggering currency transaction reporting requirements, which is a common indicator of money laundering or other illicit activities. Given these circumstances and her role as the BSA Compliance Officer, Ms. Whitmire's responsibility is to recognize the activity as suspicious and recommend the filing of a Suspicious Activity Report (SAR) to document and report these findings in compliance with Bank Secrecy Act regulations.