A former bank official with the Chase Bank was convicted of disclosing the existence of a suspicious transaction report (suspicious activity report in the U.S.) to a bank customer. Frank Mendoza, who worked as a loss mitigation specialist for Chase Bank, conducted an investigation of a delinquent borrower on mortgage loans made in relation to seven properties in California. In the fall of 2008, Mendoza reported to Chase that he suspected fraud in relation to the mortgages, and a few months later, the bank filed a suspicious activity report with FinCEN. Several months later, Mendoza approached the borrower and asked for US$25,000 in exchange for Mendoza’s assistance with Chase and with a potential federal criminal investigation related to the loans. In these conversations, Mendoza disclosed the filing of the SAR and claimed that a federal criminal investigation of the borrower was imminent.
This is the first conviction under anti-money laundering legislation of a person disclosing the filing of a suspicious activity report to the person who is the subject of the report. Mendoza faces a jail term of 95 years in U.S. federal prison.
Under Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act, employees of reporting entities and the reporting entities themselves are prohibited from disclosing that a suspicious transaction report was filed with FINTRAC, or the content of those reports with the intent to prejudice a criminal investigation. An employee or reporting entity that discloses filing a suspicious transaction report or the content of such a report with the intent to prejudice a criminal investigation is liable on conviction to a prison term of up to two years.