WASHINGTON — An increase in suspected mortgage fraud at banks and thrifts helped push suspicious activity report filings by financial institutions to a record last year, the Financial Crimes Enforcement Network said Tuesday.
Mortgage fraud filings jumped 23%, to 64,816 in 2008, and helped boost overall SAR filings by 13%, to 732,563. Fincen attributed half of the yearly total increase to fraud filings, including mortgage fraud, credit card fraud and commercial loan fraud. "SAR data continue to provide an overview of our financial fraud climate," Fincen Director Jim Freis said.
Some of the increase was likely because of several types of fraud being conducted by the same suspects, and may have been filed in association with other suspected crimes.
"While increases in reporting of suspected fraudulent activity could mean that there is an increase in fraud, it also reflects an increase in awareness within financial institutions detecting such activity," Freis said. "For example, institutions that file SARs are more aware today of the types of mortgage fraud being perpetrated, and are more likely to file a SAR."
Check fraud was the largest category of fraud filings, with 83,988 reports, up 17% from 2007. Reports of check kiting jumped 25% during 2008.
Filings on suspected credit card fraud jumped 22%, to 39,711, while filings on commercial loan fraud were up 34%, to 23,805.
Wire transfer fraud also appears on the rise. Since April 1996, 53,590 SARs have been filed identifying wire transfer fraud. Nearly half of those filings came in the past two years.
Suspected violations of the Bank Secrecy Act, structuring and money laundering filings are still the largest group of filings by far with 382,338 reports, 44% of the activity reported in 2008.
As the industry focuses more on fraud reports, filings of suspected terrorist activity continued a downward trend since 2004, with a decrease of 26%, to 506 in 2008.
By far, California institutions filed the most reports, 147,171, down from 149,990 in 2007. Florida followed with 49,868 reports in 2008, and Texas with 43,310 reports.
Most of the filers, 342,706, identified the Office of the Comptroller of the Currency as their primary regulator. But the reports by institutions regulated by the Office of Thrift Supervision have increased every year since 1996. Approximately 40% of filings by OTS-regulated thrifts were made in 2007 and 2008. SARs identifying the Federal Reserve Board as their primary regulator had previously increased every year since 1997, but dropped 21% in 2008.