The evolution of the Bank Secrecy Act and its application in the banking industry: Issues and problems in the regulatory reporting of financial crimes

Beginning with the passage of the Bank Secrecy Act (BSA) in 1970, financial institutions have been the focus of a series of regulatory efforts aimed at restricting the use of banks to disguise the proceeds of illegal activity. The most recent efforts appeared in the form of the Suspicious Activity Reporting System or SARS.; The primary goal of this paper is to assess the success of SARS in referring criminal cases to law enforcement agencies through a study of Suspicious Activity Reports completed by two financial institutions. The assessment is achieved through a review of information obtained from a sample of SARs supported by a search of related criminal records. Another goal is to provide descriptive data regarding financial crimes and their perpetrators using the same sample. This data is analyzed to identify common characteristics found in criminal cases that are successfully prosecuted in the courts.