Client A is flagged for a high volume of outgoing transfers. Further investigation reveals Client A has a potentially key role in a network linked to human trafficking. After filing a suspicious activity report, what step should the investigator take next?
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A. B. C. D.C
When investigating a client flagged for a high volume of outgoing transfers, and further investigation reveals potential involvement in criminal activity, the next step for the investigator should be to file a Suspicious Activity Report (SAR) with the appropriate regulatory authorities. The SAR must contain a detailed account of the suspicious activity, the reasons why the activity is deemed suspicious, and any relevant information that can assist law enforcement in their investigation.
After filing the SAR, the investigator should then take steps to mitigate the risks posed by the client. One option is to prepare a summary for senior management recommending client off-boarding, especially if the client's activity poses a significant risk to the financial institution or its reputation. Senior management can then decide whether to close the client's account or continue doing business with them under enhanced due diligence.
Another option is to inform other local financial institutions about the client so they can halt potential services, especially if there is a high likelihood that the client will use other financial institutions to continue their criminal activity. This action can be taken after obtaining the consent of law enforcement and ensuring that the dissemination of information is lawful and appropriate.
In some cases, it may be necessary to contact law enforcement directly, such as the Federal Bureau of Investigation (FBI), to communicate the investigation findings. This step may be necessary if the activity discovered involves serious criminal conduct that poses a significant threat to the community, and law enforcement may need to take immediate action to protect potential victims.
Finally, in some cases, it may be necessary to restrain or block the client's account(s) until law enforcement makes an arrest. This option should be used only as a last resort, and only after obtaining legal advice and ensuring that the institution's actions comply with applicable laws and regulations.
In summary, after filing a Suspicious Activity Report, the investigator should take appropriate steps to mitigate the risks posed by the client, which may include recommending client off-boarding, informing other financial institutions, contacting law enforcement, or restraining/blocking the client's account(s). The choice of action will depend on the specific circumstances of the case, the institution's risk appetite, and applicable laws and regulations.