Alert February 02, 2010

FinCEN Issues Report Showing Increase in Financial Institution SAR Reporting of Check Fraud and Other Types of Criminal Activity

The Financial Crimes Enforcement Network (“FinCEN”) issued a report, The SAR Activity Review-Issue 13 (the “Review”), in which it stated that filings of suspicious activity reports (“SARs”) during the first six months of 2009 for check fraud by all categories of financial institutions required to file SARs increased over the number of filings for check fraud during the same period in 2008.  For example, the Review stated that depository institutions’ SAR filings for check fraud increased 19% over the prior period and depository institutions’ SARs for instances of suspected counterfeit checks increased by 36% over the comparable period.  The Review noted, however, that depository institutions’ SARs filed with respect to mortgage fraud increased only 1% over the first six months of 2008.  Depository institution SAR filings reporting computer intrusion increased by 75% over the comparable six-month period in 2008.  Furthermore, FinCEN reported that the total number of SARs filed by all reporting entities during the first six months of 2009 increased by 9% over the total number of SARs filed during the first six months of 2008.  The Review provides additional SAR reporting data for securities firms and other types of financial institutions.