IBA Compliance Connection

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A customer held a joint account with her mother, who was receiving Social Security benefits. The mother died one year ago, but the daughter did not notify us and continued to withdraw her mother’s benefit payments from the account, and there are no funds remaining in the account. We eventually received a reclamation letter from the Treasury demanding $10,000. What legal recourse do we have against the daughter? Should we file a police report and a SAR?

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by

admin

Your bank would be within its rights to file a police report and SAR, as the collection of benefit payments after a relative’s death is a federal crime. Also, the Social Security Administration provides a hotline for reporting Social Security fraud, and we are providing a link with the reporting information below.

We do recommend consulting with an attorney regarding possible actions you might take against the daughter, including possibly filing a claim against the mother’s estate.

For resources related to our guidance, please see:

  • OCC Suspicious Activity Report Rules, 12 CFR 21.11 (“A national bank shall file a SAR with the appropriate federal law enforcement agencies and the Department of the Treasury on the form prescribed by the OCC and in accordance with the form’s instructions. The bank shall send the completed SAR to FinCEN in the following circumstances: . . . (2) Violations aggregating $5,000 or more where a suspect can be identified. . . .”)
  • Department of Justice Press Release, Broward Resident Sentenced to Forty-One Months in Prison for Stealing Deceased Grandparents’ Social Security Funds (April 5, 2018) (Reporting that the retention of social security benefits of a relative after the relative’s death is a violation of 18 USC 641.)
  • U.S. Criminal Code, 18 USC 641 (“Whoever embezzles, steals, purloins, or knowingly converts to his use or the use of another, or without authority, sells, conveys or disposes of any record, voucher, money, or thing of value of the United States or of any department or agency thereof, or any property made or being made under contract for the United States or any department or agency thereof . . . . Shall be fined under this title or imprisoned not more than ten years, or both; . . . .”)
  • Social Security Administration, Office of the Inspector General, Submit a Report