We believe it would be appropriate to record this activity under both category 34 (Fraud) and category 38 (Other Suspicious Activity), since FinCEN’s SAR Electronic Filing Requirements User Guide states that filers should “use the suspicious activity category Items 32 through 41 to record the type(s) of suspicious activity” and “check all boxes that apply to the suspicious activity.”

Based on the activity described, we believe it would be appropriate to check box d (Check) under category 34 (Fraud), since the suspicious activity relates to check endorsements. The User Guide indicates that the “Other” box should be used “if a category applies but none of the options apply.” Here, we believe box d (Check) would apply, so you would not need to check box z (Other). We believe it would also be appropriate to check box f (Forgeries) under category 38 (Other suspicious activities), since it appears that the endorsement of one of the payees may have been forged.

Additionally, you may provide more detail about the suspicious activity in the narrative section of the SAR form (Part V).

For resources related to our guidance, please see:

• FinCEN SAR Electronic Filing Requirements User Guide, page 153 (“Items 32 – 41 Types of suspicious activity: Use the suspicious activity category Items 32 through 41 to record the type(s) of suspicious activity being reported. Check all boxes that apply to the suspicious activity. If a category applies but none of the options apply, check the category’s box ‘z Other’ and briefly describe the type of suspicious activity in the associated text field. If necessary, explain the type of suspicious activity in more detail in Part V. Note: Items 32-41 are considered critical. At least one item in 32 to 41 must be checked.”)

• FinCEN SAR Electronic Filing Requirements User Guide, page 167 (“Part V Suspicious Activity Information – Narrative . . . The narrative section of the report is critical to understanding the nature and circumstances of the suspicious activity. The care with which the narrative is completed may determine whether the described activity and its possible criminal nature are clearly understood by investigators. Filers must provide a clear, complete, and concise description of the activity, including what was unusual or irregular that caused suspicion. This description should encompass the data provided in Parts I through III, but should include any other information necessary to explain the nature and circumstances of the suspicious activity. Filers should provide any information the filers believe necessary to better enable investigators to understand the reported suspicious activity.”)