Have you ever thought:

• I could see that happening a mile off…
• I would never do business with them…
• Why did they not check that in the first place?

The odds are you have, and more than likely it was in respect of a business transaction that has made the news or you were aware of in your own industry. So why were you suspicious and what, if anything, could you have done about it? Did you think there was a crime or just that something did not feel right?

This article will examine what suspicious activity is, who should be concerned and how to report it.

What is suspicious activity?

Unhelpfully, there is no universal definition of suspicious activity. Specific jurisdictions will each have developed their own definition of what suspicion and suspicious activity is. Equally as unhelpful is a given action might be deemed suspicious if it occurs within one place, while the same activity would be considered “normal” if it occurs in another.

Therefore, in determining whether or not an activity is suspicious you should consider whether it is contextually unusual, appears unduly complex, or, receives illogical or opaque explanations when questioned. The Isle of Man provides good guidance and suggests:

“There may be an aspect of a transaction or activity that is at odds with normal expectations and therefore raises suspicion, whether through inference, sight of documents, clients’ comments, or professional insight and experience. Typically, suspicion will arise when something unusual is identified and subsequent research or checking confirms that there are abnormal or contradictory factors.”

Who should be suspicious?

The majority of qualified professionals, or those who work in a regulated business, are required to understand and undergo training to help identify and prevent criminal activity. Even if they are not directly involved, there is a legal obligation to report any activity that is suspicious. Failure to report suspicious activity is a criminal offence in itself.

It is also available for members of the public who suspect or have knowledge of criminal activities. Guidance is available from most government websites. In the UK for example, the National Crime Agency provide extensive help on how and who to report to.

Is it just white collar crime?

No. In addition to suspicions about possible money laundering, fraud and other financial crimes, the reporting of suspicious activity has been instrumental in tracing murder suspects, identifying individuals involved in sex trafficking and sexual offences, and the uncovering of terrorist activities.

Will it do any good?

The UK alone receives more than 460,000 reports on suspicious activity a year. They provide immediate opportunities to stop crime and arrest offenders. Others help uncover potential criminality that needs to be investigated, while others provide intelligence useful in the future. The impact of reporting suspicions of criminal activity also benefits people, businesses and communities.

Many businesses underestimate the reputational damage criminal activity can have and therefore turn a blind eye to their suspicions (or actual knowledge) until it is too late. The Enron, WireCard and Theranos scandals have caused significant damage to businesses in the same industry as bad actors by tarnishing their reputations despite not doing anything wrong. There is often also a knee jerk reaction from governments to increase regulation following scandal.

How do I report a suspicion?

Any person who has a suspicion or actual knowledge of criminal activity should make a suspicious activity report (SAR). The SAR requires information regarding the suspicion of criminal activity, who is suspected and details of the relationship with the reported subject. The SAR should be submitted to your national crime agency; in most cases this can be done online.

It is also important to report suspicion even if it is not occurring in the same country you are resident or working in. Many criminal activities have international reach and SAR’s help investigators piece together all elements of the crime.

But I don’t want to be a tattletale…

Many professionals and people working in the regulated sector are under a legal obligation to report suspicious activity. Failure to do so could result in criminal penalties including jail.

Even if you are not in the regulated sector, reputational and business damage could result by implication. Reporting early and understanding the consequences if there was criminal activity are crucial.

Be aware, the act of being silent may be seen as being complicit in the activities if was reasonable you should have known or suspected what was going on.

Summary

All crime has an impact and victims. Many industries have also suffered irreparable reputational damage by the bad actions of a few. If you have any suspicions, you should report them even if you are not under a legal obligation to do so.