Structured Wires and a High-Risk Freight Forwarder
A newly opened corporate account for Sunrise Auto Spa LLC lists a car wash as its business. In six weeks it receives 14 incoming wires totaling $412,000 from five unrelated individuals, each wire between $9,200 and $9,800, and sends $390,000 by wire to a freight forwarder in a jurisdiction on the firm's high-risk list. The beneficial owner is 24 years old with no documented car-wash experience. The relationship manager wants to "keep monitoring" because no single transaction exceeds $10,000 and the customer has been cooperative. The firm's AML officer must decide whether to file a SAR and whether to retain the account.
1. Does the activity require a SAR, and what is the timing?
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Yes. The pattern is suspicious even though no single transaction exceeds $10,000: multiple wires just below the reporting threshold, unrelated third-party senders, rapid outbound movement to a high-risk jurisdiction, and a nominal owner with no apparent connection to the stated business. The SAR threshold for suspicion is $5,000, not $10,000. The firm should complete its investigation and file within 30 calendar days of initial detection, or within 60 days if no suspect is identified. The analysis and decision should be documented.
2. May the firm keep the account open, and what governance should apply?
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Keeping the account open is not automatically prohibited, but it requires senior management review and enhanced due diligence, not passive monitoring. The AML officer should consider whether the activity can be explained, check OFAC and any 314(a) requests, and document the rationale. The firm may also decide to close the account. If it closes, it must do so without tipping off the customer and should consult counsel on how to return funds.
3. What may the firm tell the customer about the review?
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Nothing about a SAR. SAR confidentiality prohibits disclosing that a SAR was filed or that one is being considered. The firm may ask routine customer due diligence questions, but it cannot reveal the suspicion or tip off the customer. Any request by the customer to "not report" the wires should be documented and does not override the filing obligation.