by investigators in the same way as any other potential 1. The Target's Checks An original or microfilm reproduction of most demand deposit or savings account records must be retained by banks for five years. The required records include: (1) signature cards; (2) statements, ledger cards or other records showing complete activity; and (3) all checks, drafts, or money orders drawn on the bank or issued and payable by it. Reproductions must show the face and reverse of all checks except those on which the reverse is blank. It should be noted that the above requirement is waived in most instances for all checks drawn for $100.00 or less. However, experience has shown that most banks microfilm all checks, both front and back, regardless of the amount of the checks, since they have found that it is cheaper to do so rather than incur the expense of sorting out those that have to be microfilmed under the regulation. Therefore, there is, in most instances, a microfilm record of all checks written by potential white-collar crime targets, and said checks can and must be produced to criminal investigators, under appropriate authority. The importance of this provision of the law, where whitecollar crimes are concerned, can be illustrated by typical commercial bribery or kickback situations. The recipient of a direct or indirect bribe or kickback will obviously make no record of his receipt of the money, and the person who wrote a business check, a surprisingly common practice, will take great pains to see that his books conceal the nature of the payment, and that, after cancellation, his check is destroyed. Therefore, the existence of the bank's microfilm copy of the check may constitute the only way that the prosecution can establish the existence of a relationship or pattern of conduct which may be essential to make its case. 2. The Target's Deposits In addition to the requirements concerning the target's checks, banks must retain for a two-year period all records needed to trace a check in excess of $100.00 deposited in a demand deposit account or to supply a description of a deposited check in excess of $100.00. This requirement includes the retention of originals or copies of all records prepared or received that would be needed for tracing said checks, unless the checks were microfilmed while they were still associated with the customer's deposit ticket. The above records required to be retained by these regulations must be filed or sorted in such a way as to be accessible within a reasonable period of time, taking into consideration the nature of the record and the amount of time expired since it was made. 3. Analyzing the Target's Deposits and Expenditures The importance of the above regulations to criminal investigators cannot be over emphasized. Among other things, with proper authority, criminal investigators involved in the investigation of white-collar crime cases can analyze targets' bank accounts, and, where appropriate, identify the maker of specific pertinent checks deposited by a target to his bank accounts, as well as determine the nature of his expenditures, when appropriate. This type of information can be used to assist in establishing hidden ownership of businesses and other assets as well as to furnish criminal investigators with names of possible associates of targets engaged in white-collar crime activities. For example, a monthly pattern of deposits of unidentified checks to a subject's commercial account, in similar amounts, would warrant an effort to "trace" one of the checks through the bank's records in order to identify the "maker" of the check. Such a technique could lead to the identification of an individual making loan payments to the subject. This technique may not only lead to an expenditure of substantial funds (e.g., a large loan), from the proceeds of the subject's illegal activities, but may as well identify another associate of the subject, who may possess additional information about his illegal activities. Therefore, once a decision has been made that an investigation warrants the expenditure of the necessary time, copies of all of the target's bank statements, for the years of interest to the investigator, should be obtained if a proper legal basis can be established. Further preliminary investigation to lay such a groundwork will frequently pay off. At this point it is usually advisable to look into the legal requirements for obtaining a warrant or a grand jury subpoena. Only those deposits and withdrawals that appear to be of interest to the investigator should be listed on separate schedules. An attempt should then be made to associate the deposits and withdrawals with other known financial transactions, thereby isolating those that cannot be identified. It is those isolated deposits and withdrawals, that, if traced through the bank's records, may well lead to the discovery of hidden business interests or other undisclosed assets. The above technique is not complex. To be successful, legal access to the bank's records must be obtained, and the investigator must take the necessary time to make a careful analysis of the deposits and withdrawals appearing on the monthly bank statements. a prerequisite. A background in accounting is not Sample "Questionable Deposits" and "Questionable Withdrawals" schedules are contained on the following two pages. Returned from Las Vegas on prior day. Returned from New York on prior day. SCHEDULE OF QUESTIONABLE WITHDRAWALS Date Amount of Remarks Similar withdrawal each month. Entered safe deposit box same day. Purchased traveler's checks at ABC bank same date. (Get copies of cancelled traveler's checks from issuing company to determine (1) dates and locations of travel, (2) nature of expenditures, and (3) names of endorsers. May be annual homeowner's insurance policy. (Purchased residence in June, three years earlier.) Similar check withdrawals in June of both prior years. May lead to identification of insurance broker, which could open up new leads. Purchased Cashier's Check same date. Observed by surveillance team same date entering ABC Nursing Home. Get copy of Cashier's Check. Check the endorsement. May prove to be hidden investment in Nursing Home. |