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Bank Account Search Investigations by son15023

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                                                                          Obtaining and Interpreting Bank Records


Methods to Obtain Records
As noted in the introduction, the three primary ways to obtain bank records are through subpoena,
search warrant, or previous agreement of the individual whose records are of interest.

A subpoena is a legal document that is signed by a judge and may be part of a grand jury investigation.
It gives the financial institution the authority to provide the records to the investigating agency without
placing itself in violation of federal financial record secrecy laws (see Appendix A). The subpoena
would include a listing, sometimes referred to as a “Schedule A,” that would ask for the specific records
needed. A sample of a Schedule A is seen in Figure II. 1.

                  Figure II. 1: Sample Bank Record Subpoena Schedule A

     All bank records of any and all accounts under signature authority of any of the named parties or entities, including
but not limited to account number(s) ___________ _____________ from ___________ to _____________

         A. All open or closed checking, savings, and money market accounts:
                1. Account opening documents including signature cards, copies of identification documents provided ,
                and, if business account, copy of corporate resolution to open account and other business documents
                provided which may include articles of incorporation for the business.
                2. Bank statements.
                3. Cancelled checks (both sides).
                4. Deposit tickets and items (both sides of items, including ATM and direct deposits).
                5. ATM withdrawals and point of sale debits.
                6. Credit and debit memos.
                7. Telephonic transfer slips.
                8. Wire transfer records.
                9. Forms 1099 or back-up withholding statements.

         B. Retained copies of all open or closed bank loan or mortgage documents:
                1. Loan applications.
                2. Loan ledger sheets.
                3. Copy of loan disbursement documents.
                4. Copy of loan repayment documents.

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Obtaining and Interpreting Bank Records

                 5. Loan correspondence files.
                 6. Collateral agreements.
                 7. Credit reports.
                 8. Copies of notes or other instruments reflecting the obligation to pay.
                 9. Copies of real estate mortgages, chattel mortgages, or other security for bank loans.
                 10. Copies of annual interest paid statements.
                 11. Copies of loan amortization statements.

        C. Certificates of deposit (purchased or redeemed):
               1. Copies of the certificates.
               2. Records pertaining to interest earned, withdrawn, or reinvested.
               3. Form 1099 or back up withholding statements.

        D. Open or closed investment or security custodian accounts:
              1. Documents reflecting purchase of security.
              2. Documents reflecting negotiation of the security.
              3. Safekeeping records and logs.
              4. Receipts for receipt or delivery of securities.
              5. Copies of annual interest paid statements.

        E. All open or closed IRA/Keogh, and other retirement accounts:
               1. Account statements.
               2. Investment, transfer, and redemption confirmation slips.
               3. Documents reflecting the purchase of an investment.
               4. Documents reflecting the redemption of an investment.
               5. Copies of annual interest earned statements.

        F. Safe deposit box information:
               1. Deposit box rental information, including signature cards.
               2. Logs of dates and times of entries to and exits from box.

        G. All cashier’s, bank, or traveler’s checks, and money orders purchased:
               1. Copies of documents used to purchase checks or money orders.
               2. Copies of documents reflecting negotiation of the checks/money orders.
               3. Retained copy of application for negotiable instrument.
               4. Retained copy of the check/money order.

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                                                                            Obtaining and Interpreting Bank Records

         H. Wire transfer files:
               1. Request for authorization to wire funds by target.
               2. Fedwire, SWIFT, or other documents reflecting the transfer of funds to, from, or on behalf of the
                    person which show the beneficiary entity, destination bank, and account number.

                  3. Documents reflecting the source of funds for a wire out.

                  4. Notes, memoranda, or other writings pertaining to the sending or receipt of wire transfers.

                  5. Documents that reflect the disposition of a wire transfer.

                  6. Currency Transaction Reports and Suspicious Activity Reports
                        a. Copies of Currency Transaction Reports (Form 104) by individual.
                        b. Copies of CTR Exempt List and justification of exemption documents (Form 110) if
                             entity under investigation is on the exemption list.
                        c. Suspicious Transaction Reports filed on the entity and any supporting documentation for
                             those reports.

         I. Customer correspondence files for each of the named parties and entities.

Special Note: If you need to obtain bank records from a bank outside of the country, you may need to either access them
through the U.S. Department of Justice Office of International Affairs (if you are in U.S. law enforcement) or through
resources in the country where the bank is located.

Because banks are required to notify account holders if anyone has asked for copies of their account
records (12, U.S.C., 35, § 3412; see Appendix A), law enforcement may ask for a judicial order for the
bank to not inform them of the disclosure (12, U.S.C., 35, § 3409). To receive one of these orders, an
“Affidavit for Non-Disclosure” must be submitted to, and approved by, a judge. A sample of this is
shown in Figure II. 2.


                               Figure II. 2: Sample Affidavit for Non-Disclosure

         1. There is presently an investigation being conducted by the agency into alleged criminal acts of targeted entity.
The said alleged acts being criminal offenses contrary to the laws of the jurisdiction (enumerate statutes).

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        2. The writer is an (investigator/analyst) with the agency investigating, assigned to the (bureau/unit/section). In
my capacity in the (bureau/unit/section), I am empowered to conduct investigations of and/or make arrests for violations
of (enumerate crimes).

          3. I am responsible for the investigation that gives rise to this application for an order prohibiting (name of Bank)
from disclosing to any person, except company employees directly involved in complying with the name of subpoena dated(
), returnable before date, the fact that the bank was served with said subpoena, or the nature of the documents which
production is commanded under the terms of this subpoena, or the fact that documents have been produced pursuant to the
subpoena, or of the existence of this order, for a ninety (90) day period commencing upon the signing of this order. A copy
of the subpoena which will be served upon the Custodian of Records of (name of Bank), if and when the order is signed, is

          4. The facts to establish grounds for this application are as follows;
              A. I have been an (investigator/analyst) for the agency name since (date). I have completed a (#) week
basic training course conducted by the (name of training provider) for (name of agency). Since date, I have been assigned to
the (name of section, unit, bureau). I have been assigned to over (#) investigations in the (name of section/unit/bureau)
etc. I am familiar with methods of criminal acts committed by targets.

             B. For approximately the past (duration) I have conducted an investigation into (nature of investigation). I
have determined that this criminal activity is committed by( state overview of general facts of case).

              C. ( State more relevant facts of the case.)

              D. I believe that the subpoenaed bank records will establish evidence of and show the connection between
(target name) and type of criminal activity. I further believe the records may identify other actors who may be involved in
the above described scheme and other persons who may be witnesses to these events.

              E. Pursuant to federal statues, representatives of each bank that maintains these accounts will notify the
account holders that records pertaining to each account have been subpoenaed unless this court issues an order prohibiting the
bank from doing so (12, U.S.C., Section 3404).

               F. A non-disclosure order is sought because there is reason to believe that if any of the above-mentioned
parties are made aware of the agency’s investigation, this may result in a serious risk of flight from prosecution and
destruction of/tampering with evidence. At this time, the investigation is ongoing and these records need to be reviewed to
search for further witnesses and/or evidence. To the best of my knowledge, the parties involved are presently unaware of this

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                                                                            Obtaining and Interpreting Bank Records

          Wherefore, I respectfully request that an order be issued prohibiting the (name of Bank), its officers, employees, or
agents from disclosing to any person, other than company employees necessary to comply with the subpoena, the existence or
services of or compliance with ( ) Subpoena Duces Tecum dated (               ), returnable before date for documents
pertaining to accounts to which name is signatory, or the existence of this application and order for a ninety (90) day period
commencing upon the signing of the attached order.

These non-disclosure agreements expire in 90 days but may be renewed.

Search Warrant
Search warrants require more evidential basis than subpoenas and are granted by a judge for stated
locations and evidence. The application for a financial search warrant includes the applicant’s (affiant’s)
experience, a detailed account of the criminal activity under investigation, the financial evidence held and
needed, what items are to be seized, and what the affiant’s expertise indicates relative to conclusions
about the criminal activity and potential evidence to be seized.

•   Make sure the criminal activity exceeds the probable cause test.
•   Make sure the criminal activity has been well-corroborated.
•   All evidence listed in the items to be seized in the search warrant must be discussed in the Affiant’s
    expertise section of the affidavit.
•   Carefully guard against going beyond the scope of the warrant.
•   There must be a basis for the seizure of each document.
•   Avoid preparing general/exploratory search warrants (“fishing expeditions”).

Prior Consent
A third way in which financial records may be obtained is through prior consent of the person under
investigation. In these cases, the person has signed releases indicating that this information may be
shared with a particular agency, usually in relation to a stated purpose, such as compliance with a
financial disclosure requirement for employment or compliance with some court order.

Some administrative agencies can access records through administrative subpoenas or interrogatories.
Some agencies working overseas are able to access overseas records through written or verbal requests
of bank officials. In countries with strict bank secrecy laws, accessing records can be very difficult.

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Obtaining and Interpreting Bank Records

What Records to Look For
Account Opening Documents
For a personal account, account opening documents would include a signature card that would have the
person’s name, address, telephone number, identification number such as Social Security number,
amount of opening deposit (possibly source of opening deposit) and the security data (such as mother’s
maiden name). Also in the account opening file, there might be a copy of a driver’s license or other
identification provided to the bank.

For a corporate account, the above listed information would be present along with a copy of the
corporate resolution authorizing the opening of a bank account on its behalf and possibly the Articles of
Incorporation for the corporation. These documents would indicate who the corporate officers of the
company were and might say when it was incorporated.

If the company was not incorporated, there might be a “doing business as” registration, a fictitious name
registration, or a business registration certificate, depending on state laws.

                                   Figure II. 3: Business Signature Card

        Title of Account:                                                Account Number:
        Customer No:                                     CHK             CORP      TN
                                                         SAV             PARTN     UNINC
        Soc. Sec. #                                      No. Sign:
        Fed. Tax ID:                                     Required
        Authorized Signers (Name, Title)

        Business Phone                                   Type Business
        ID Verified by
                                                Opened                   MGR
        Branch Name                             by                       Date
        Opened                         Amount

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                                                                  Obtaining and Interpreting Bank Records

Bank Statements
Bank statements are provided for all types of bank accounts, including checking accounts, money
market accounts, savings accounts, CAP accounts (used by those who deal in securities transactions
often) and others.

Bank statements are helpful in that they summarize the financial activity of the account holder for a
specific period (usually a month). If a credit card is tied to the account, the statement also reflects credit
card balances, but generally not specific transactions.

Today, bank statements are mailed to account holders or are accessible on-line. Some banks still return
original checks along with the bank statements to the account holder; others provide pages with smaller
facsimiles of the checks front and back. A sample of a mailed statement is seen in Figure II. 4.

                               Figure II. 4: Mailed Bank Statement Fragment

                                   BANK OF THE UNITED STATES
                               Consolidated Statement 12/16/06 thru 1/16/07
                                                                                          Account Holder Name
                                                                                                 Town, State Zip
                                                                               Account Number:   XXXXXX5038
        Account Summary
        Opening Balance: $4,597.23
        Closing Balance:   $5,231.19

        Credit and Loans
        Act. #             Account       Balance       As of     Credit Line
        XXXXXXXX           VISA          $7,085.32     1/16      $14,000

        Deposits and Other Credits
        Date               Amount        Description
        12/18              $ 653.53      Deposit
        12/22              $2,225.07     Automated Credit (Source) ID #
        1/06               $2,236.02     Automated Credit (Source) ID#
        1/16                     1.03    Interest
        Total        $5,097.65

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         Number        Amount        Date      Number        Amount       Date
         137      $130.00            12/19     136           $279.00      12/20
         135      $ 10.00            12/18     138           $ 48.75      12/21
         139      $350.77            12/19     132           $ 24.00      12/25
         Total         $4,897.70

         Automated Checks
         Number        Amount        Date      Description
         163           $20.42        12/19     AUTOMATED CHECK AMERICAN EXPRESS
                                               CHECK PYMT CO ID ####################
         178           $62.79        1/05      AUTOMATED CHECK STRAWBRIDGES ACCT
                                               PYMT CO ID ############
         Total              $83.21

         Other Withdrawals and Service Fees
         Date     Amount         Description
         12/18    $148.33        PURCHASE BED, BATH & BEYO 4/16
                                 SPRINGFIELD, VA
         12/18    $157.51        PURCHASE GIANT FOODS 4/16
                                 VIENNA, VA
         12/20    $88.98         PURCHASE GIANT FOODS 4/19
                                 VIENNA, VA
         12/26    $101.50        WITHDRAWAL PANCHOVIA BANK 4/25
                                 ALEXANDRIA, VA
         1/16     $101.36        PURCHASE SOU USPS ###############
                                 ARLINGTON, VA
         5/16     $115.88        AUTOMATED DEBIT ROCK INSURANCE INS PREM
                                 CO ID ###################
         Total: $1,593.85

In the above consolidated bank statement, financial activity in the account is shown along with a tied credit card balance.
Checks are listed by number, while checks that have been converted to electronic instruments are shown under “automated
checks.” ATM and point of sale activity, along with automatic debits, are shown in the “other withdrawals and service
fees” section.

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                                                                    Obtaining and Interpreting Bank Records

An on-line bank statement shows transactions as they are charged against the account, including the
varied types of transactions (checks, electronic checks, electronic funds transfers, etc.). A sample on-line
statement is seen in Figure II. 5.

                              Figure II. 5: On-Line Statement Fragment
                                              On-Line Statement

                                        ALL TRANSACTIONS

                                          Account: XXXXXX1431
                                        Available Balance: $2,235.35
                                          Check Card Holds: View Details
                                  Date Range: 11/20/06 to 1/4/07 Go
                               Transactions available from 10/10/06 to today.

Date            Action      Description                        Withdrawals       Deposits   Balance

1/2/07          View        Check 268                          $774.00                      $2,235.35
12/31/06                    AUTOMATED DEBIT                    $400.00                      $3,009.35
                            BONY EPAY
12/30/06                    TRANSFER TO PANCHOVIA              $100.00                      $3,409.35
                            BANK N.A. #1341 12/28
12/27/06        View        Check 267                          $100.00                      $3,509.35
12/27/06                    WITHDRAWAL
                            NEW YORK 12/27                     $100.00                      $3,609.35
12/27/06                    DEPOSIT
                            NEW YORK 12/27 `                                 $1,819.12      $3,709.35
12/25/06        View        Check 264                          $145.00                      $1,890.23
12/23/06        N/A         AUTOMATED CHECK EXXON $ 52.41                                   $2.035.23
                            MOBIL CHECKPAYMT
12/18/06                    INTEREST FROM 12/16/05
                            THROUGH 12/18/06                                   $ 0.14       $2.087.64
12/13/06                    AUTOMATED CREDIT
                            CXXXX OPS PR PAYMNT                              $1,191.92      $2,087.50
12/12/06        View        Check 256                          $235.47                      $ 895.58

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Obtaining and Interpreting Bank Records

In the on-line statement shown, six forms of banking are seen, including four examples of electronic
banking. The 12/31 transaction of an electronic payment from “Panchovia” to the Bank of New York
is one established by the account holder and the Bank of New York, relative to a particular credit card to
which the account holder wants to make an electronic payment of $400. The 12/30 transaction is a
transfer of $100 from this account to another account at Panchovia, presumably done through an
automated teller machine transaction.

The 12/23 transaction was a check written by the account holder to ExxonMobil for $52.41, but the
column where a check would normally be viewed and printed out states “N/A.” Further information
provided says that the company converted the check to an electronic payment and destroyed the check,
thus only the information in the electronic payment is now available. This conversion to “electronic
check” is governed by the Electronic Funds Transfer Act and the paper checks are not required to be
sent to the bank or returned to the customer. However, the consumer is supposed to be given notice
that this will occur so they know that they will not be receiving the check back. This type of conversion
to an electronic check may also be done at a point of sale. In this case, the check is run through
processing and handed back to the customer and the check is then voided, with the following
information, or something similar, printed on the back:

        “I authorize conversion of my check to draft or Electronic Funds Transfer (“EFT”) and the debiting of my
        account for payment of the sale amount. I expressly confirm that I have seen and read the return check fee point-
        of-sale signage. If the draft or EFT returns unpaid, I agree to pay my check plus all applicable fees as stated on
        point of sale signage or the maximum fee allowed by state law by EFT(s) or debit(s) to my account.”

These electronic checks should not be confused with “substitute checks,” which will be discussed under
Check 21.

Finally, on 12/13 there was an automated credit of $1,919.92. This is from a direct deposit of a
paycheck. Direct deposits of funds from payroll and government stipends are some of the most
common forms of electronic payments.

Another form of electronic banking not seen on this statement is on-line bill paying. In some instances,
this translates into the bank writing a check to a company on your behalf (e.g., utilities, car loans, etc.).
In others, it may result in an electronic payment. These would also be shown and identified as such on a
statement. Along with on-line bill paying, one can also arrange for electronic billing. The customer then
receives electronic bills from repeat service providers, such as utilities, mortgage, loans, or rent.

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                                                                Obtaining and Interpreting Bank Records

Checks written on funds in bank accounts have represented the bulk of withdrawals from these
accounts in the past, but, to some degree, electronic payments are taking the place of checks. Payees,
dates, amounts, and other data on these checks provide investigators with leads and help to identify an
individual’s assets. Checks are the basic documents in a bank record analysis.

                                   Figure II. 6: Bank Check Front
   Robert and Susan Wood
   731 First Street                                                           April 20, 2006
   Southport, FL 33211

   ORDER OF         XYZ Corporation

                  Eight thousand eight hundred ninety and 00/100           DOLLARS

   Third State National Bank

   Memo       #2 Green Road                                                Robert K. Wood
              0312 0073                3048576456                   3487                       889000

The front of a bank check tells investigators the name of the account holder (upper left corner), the date
the check was written, the bank on which it was written, the entity it was written to, the amount of the
check, the signatory, and some reference on the memo line. A check also designates the account
number (bottom line, center), the American Banking Association number of the bank (bottom left and
top center). The check number is shown in the upper right hand corner and is repeated on the bottom,
right of center in this case. The lower right hand corner number is the amount of the check, added by
the transacting bank when it is transacted.

It is important to ask for all deposit items and review them, unless this information is available from
another source. Deposit slips are helpful because they break the deposit down into the specific checks
and cash deposited. The bank statement only shows the total of the deposit for that transaction. Cash
deposits are shown on a separate line on the slip. It may also register as a cash deposit if someone has
deposited only part of a check received and taken some cash back. The original amount of the check
will appear on the deposited item.

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Obtaining and Interpreting Bank Records

                                     Figure II. 7: Bank Check Back

                                                                                 Account# 390000715841

                                                                                                         XYZ Corporation

                                                                                                                           Prior Endorsement Guaranteed
           02100000000000000000060 FRB-
           ENT=2136 TRC=2136 PK=27
                                           COLLECTING BANK 2045
                                           SVC-821 02232006 01PK

The back of a check can include many items of interest to the person analyzing the records. A deposited
check may show the name of the entity to whose account the money has been deposited, sometimes
with an account number (as Figure II. 7 shows). The different stampings on the back are put there by
the financial institutions through which the check has traveled. In the above instance, the check crossed
Federal Reserve Bank districts before returning to the making bank. This is indicated by the stamping in
the upper left corner, along with a date and transaction number. The stamping in the middle is that of
the bank where XYZ’s account is located. The date is on line three.

Stampings on the back of checks can be faint, on top of one another, and difficult to read. The check in
this sample would have at least four stampings. You will see that they have been reduced for reading

On October 28, 2004, a new law went into effect that impacted all individuals who use checking
accounts. It is called the Check Clearing Act for the 21st Century, or “Check 21” for short.

Check 21 was passed to take advantage of new check imaging technology available and to cut down on
the paper load being exchanged as a result of the 40 billion check transactions per year in the U.S. Due
to this mass influx of paper, it was determined that standardization of electronic check exchanges was

Check 21 allows banks to use a paperless technique to exchange information found on checks; however,
this law does not require them to do so. It authorizes a new negotiable instrument called a “substitute
check,” which is a paper reproduction of the original check that contains an image of the front and back
of the original.

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                                                                Obtaining and Interpreting Bank Records

These substitute checks must:
• Contain the same MICR line as in the original;
• Accurately represent all information on the front and back of the check including endorsements,
   payment, and identification information;
• Bear the legend: “This is a legal copy of your check. You can use it the same way you would use the
• Include the name of the bank that has created the “reconverted” check;
• Preserve all previous information; and
• Include the name of the bank that “truncated” the check.

One reason the electronic information must be able to “reconstruct” all the information on the original
check is because some banks in the clearing process may not accept electronic checks and thus will need
a “substitute” for the original. The Check Clearing Act does not require that all banks use this ability to
create check images in place of actual checks. It does not mandate check “truncation” (i.e., the
destruction of paper checks). Individual banks have the ability to decide if they will accept electronic

An important impact of electronic processing of checks is the cutting of the “float” time for checks that
have been written from days to minutes or hours. However, electronic processing does not shorten the
time a bank may impose on the crediting of incoming checks, which still allows the banks some “float”
time on how quickly they credit money received from incoming checks. If a bank decides to use Check
21 provisions, they notify one, in writing, of this fact and explain how the checks in the account are to
be handled. Some banks give customers the opportunity to choose if they wish to continue receiving
their cancelled checks back or if they are willing to accept access to the information on-line or in a
printed statement with small images of the check.

Check 21 provides that a properly prepared substitute check is the legal equivalent of the original check,
and any check is eligible to become a substitute check. It also requires banks to accept legally equivalent
substitute checks.

It is important to note that not only banks are allowed to convert the check to an electronic image.
Through a practice known as “distributed capture,” electronic information may be scanned from a
check at a point of sale (such as a supermarket, hardware supply chain store, or other location), and
forwarded to banks from there. Thus, a check made out for groceries may be handed back to the
customer by the cashier – the information on it then taking on a life of its own.

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