Picture it: the Federal Law Enforcement Training Center, circa 2005: I, a newly minted Special Agent with the Internal Revenue Service, Criminal Investigation (IRS-CI), had just successfully completed a months-long training case bringing down Fred Fraudster for money laundering. It all started with a timely submitted and well-documented Suspicious Activity Report (SAR).
It was a different reality in the field. Despite bankers’ good-faith efforts to fulfill their compliance obligations—often expending significant time and resources drafting and filing SARs—many reports were based largely on cash activity, threshold-driven transactions, or conduct that was unusual but otherwise lawful, often without the benefit of full contextual analysis tying the activity to suspected criminal conduct. As a result, filings frequently omitted critical information useful to law enforcement, and in some instances, the reported activity did not rise to a level of risk necessitating a SAR at all.
