The Branch Manager's Community Group
You are the financial crime investigations lead at a mid-sized bank. A branch manager, Priya, has been with the bank 11 years and manages the busiest branch. An internal audit review found that Priya approved 12 new accounts over 8 months for customers who all listed the same residential address - a two-bedroom apartment. The accounts received 47 incoming transfers totaling $890,000 from 9 different countries, and 44 were withdrawn in cash within 48 hours. Priya also reversed $3,400 in overdraft fees for one of the account holders. When asked, Priya said she was 'helping a community group' and did not know the customers personally. One of the account holders is her cousin. HR wants to interview Priya tomorrow. The SAR/STR for the accounts was filed last month. Priya has not been told.
1. Set out the investigation plan and the order of steps.
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Plan:
- Preserve evidence: account-opening documents, system audit logs, fee-reversal records, email and chat, branch CCTV, and Priya's access logs.
- Scope the conduct: identify all 12 accounts, the 47 transfers, the 9 countries, the common address, and any other accounts opened or approved by Priya.
- Check for collusion: did other staff process the withdrawals or override controls? Review approvals and segregation-of-duties exceptions.
- Quantify: $890,000 in, 44 cash withdrawals within 48 hours; identify remaining balances and any losses.
- Sequence: complete documentary evidence before interviewing; interview non-subject witnesses first; keep Priya's interview last.
Reasoning: The investigation must answer three questions: what happened, who knew, and what controls failed. Interviewing Priya first would risk destruction of evidence and tipping-off. The SAR on the accounts is already filed; the employee investigation is separate but related.
2. How should the interview with Priya be conducted, and what tipping-off constraints apply?
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Interview:
- Two interviewers: one from investigations, one from HR or legal; take contemporaneous notes.
- Open with the process, not the accusation: ask her to explain the account-opening process, the common address, and the fee reversal.
- Ask specific, evidence-based questions: 'Why did 12 customers at a two-bedroom apartment get accounts approved by you?' 'What is your relationship to the account holder who is your cousin?'
- Do not reveal the SAR or the full scope of the audit; do not say 'we know you are involved.'
- Allow her to explain; test the 'community group' account against documentary evidence.
Tipping-off:
- The SAR is confidential. Mentioning it, or hinting that a report has been made, may be a criminal offence.
- If she asks whether a report has been filed, do not answer; refer to policy.
- If she resigns or leaves, secure access immediately.
Reasoning: The interview is both an employment and an evidence-gathering process. Its purpose is to obtain her account, not to secure a confession, and it must not compromise the SAR.
3. What reports and notifications should follow, and how should the employment decision be handled?
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Reports:
- File an internal employee suspicious activity report or insider-threat report, separate from the customer SAR.
- Consider a further SAR/STR if the employee's conduct reveals new suspected laundering; do not assume the earlier account-level filing covers it.
- Notify the regulator if required by the bank's licence (e.g., material fraud or insider misconduct) and law enforcement if a criminal offence is suspected.
- Update the board/risk committee through the financial crime MI.
Employment:
- HR and legal decide on suspension, access removal, and disciplinary process; investigations should not recommend dismissal without legal review.
- Preserve the interview record and avoid constructive dismissal risk.
- If dismissed, ensure the reason is documented and not a pretext for the SAR.
Reasoning: The bank faces three audiences - the regulator, law enforcement, and the employment tribunal. Each needs a different record. Conflating them creates tipping-off and employment-law risk.