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NEW QUESTION # 30
An investigator at a corporate bank is conducting transaction monitoring alerts clearance.
KYC profile background: An entity customer, doing business offshore in Hong Kong, established a banking business relationship with the bank since 2017 for deposit and loan purposes. It acts as an offshore investment holding company. The customer declared that the ongoing source of funds to this account comes from group-related companies.
* X is the UBO. and owns 97% shares of this entity customer;
* Y is is the authorized signatory of this entity customer. This entity customer was previously the subject of a SAR/STR.
KYC PROFILE
Customer Name: AAA International Company. Ltd
Customer ID: 123456
Account Opened: June 2017
Last KYC review date: 15 Nov 2020
Country and Year of Incorporation: The British Virgin Islands, May 2017 AML risk level: High Account opening and purpose: Deposits, Loans and Trade Finance Anticipated account activities: 1 to 5 transactions per year and around 1 million per transaction amount During the investigation, the investigator reviewed remittance transactions activities for the period from Jul
2019 to Sep 2021 and noted the following transactions pattern:
TRANSACTION JOURNAL
Review dates: from July 2019 to Sept 2021
For Hong Kong Dollars (HKD) currency:
Incoming transactions: 2 inward remittances of around 1.88 million HKD in total from different third parties Outgoing transactions: 24 outward remittances of around 9 4 million HKD in total to different third parties For United States Dollars (USD) currency:
Incoming transactions: 13 inward remittances of around 3.3 million USD in total from different third parties Outgoing transactions: 10 outward remittances of around 9.4 million USD in total to different third parties.
RFI Information and Supporting documents:
According to the RFI reply received on 26 May 2021, the customer provided the bank with the information below:
1) All incoming funds received in HKD & USD currencies were monies lent from non-customers of the bank.
Copies of loan agreements had been provided as supporting documents. All of the loan agreements were in the same format and all the lenders are engaged in trading business.
2) Some loan agreements were signed among four parties, including among lenders. borrower (the bank's customer), guarantor, and guardian with supplemental agreements, which stated that the customer, as a borrower, who failed to repay the loan After reviewing the transaction journal, request for information response, and supporting documentation, the investigator determines that additional information is needed. Which additional information should the investigator request?
- A. Adverse news screening on all names listed in the formation documents
- B. Source of the incoming funds to the group-related companies
- C. Formation document/description of the group-related companies
- D. Previously filed SARVSTR unrelated to the customer, but similar in content
Answer: B
Explanation:
Explanation
The additional information that the investigator should request is the source of the incoming funds to the group-related companies. This is because the customer declared that the ongoing source of funds to this account comes from group-related companies, but the transaction journal shows that the customer received funds from different third parties, not from group-related companies. Therefore, the investigator should verify the relationship and legitimacy of these third parties and their funds with the customer and the group-related companies. The other options are not relevant or necessary for this investigation.
References: Advanced CAMS-FCI Certification | ACAMS
NEW QUESTION # 31
A government entity established a trust to provide social welfare programs. The entity wants cash payments made to persons without supporting documentation. These persons would oversee the allocation of funds to beneficiaries without complying with internal disbursement of government funds controls. Which is the main premise for filing a SAR/STR?
- A. The entity is not implementing adequate internal controls according to what is expected, and mishandling of funds could be occurring.
- B. Trust service providers are not obliged by law to follow government internal controls.
- C. Cash disbursements are not allowed for social welfare programs.
- D. Social welfare programs are difficult to document because the beneficiaries are from the informal sector.
Answer: A
Explanation:
Explanation
The main premise for filing a SAR/STR is that the entity is not implementing adequate internal controls according to what is expected, and mishandling of funds could be occurring. This raises suspicion that the entity may be involved in corruption, fraud, or diversion of funds for illicit purposes. Trust service providers are obliged by law to follow government internal controls, as they are subject to AML/CFT regulations and supervision. Cash disbursements are allowed for social welfare programs, but they should be properly documented and verified. Social welfare programs are not necessarily difficult to document, as there are ways to identify and monitor the beneficiaries, such as biometric data or unique identifiers.
NEW QUESTION # 32
An investigator receives an alert documenting a series of transactions. A limited liability corporation (LLC) wired 59.000.000 USD to an overseas account associated with a state-run oil company. A second account associated with the state-run oil company wired 600,000,000 USD to the LLC. The LLC then wired money to other accounts, a money brokerage firm, and real estate purchases.
The investigator initiated an enhanced KYC investigation on the LLC. The financial institution opened the LLC account a couple weeks prior to the series of transactions. The names associated with the LLC had changed multiple times since the account opened. A search of those names revealed relations with multiple LLCs. Public records about the LLCs did not show any identifiable business activities.
Open-source research identified mixed reports about the brokerage firm. The firm indicated it purchased mutual funds for its clients and dispensed returns to clients. Media reports claimed the firm laundered money by holding money for a fee before returning it to investors.
What is the total suspicious transaction amount that the investigator should report?
- A. 600,000,000 USD
- B. 541.000,000 USD
- C. 59,000,000 USD
- D. 659,000,000 USD
Answer: D
Explanation:
Explanation
The total suspicious transaction amount that the investigator should report is 659,000,000 USD. This is the sum of the two transactions involving the LLC and the state-run oil company, which are 59,000,000 USD and
600,000,000 USD respectively. The other transactions that the LLC made to other accounts, a money brokerage firm, and real estate purchases are not relevant to the question, as they are not part of the series of transactions that triggered the alert.
References: Advanced CAMS-FCI Certification | ACAMS
NEW QUESTION # 33
The investigative department of a financial institution (Fl) receives an internal escalation notice from the remittance department for a SWIFT message requesting a refund due to potential fraud. The notice indicates that a total of three international incoming remittances were transferred to a corporate customer from Country A, in the amount of approximately 5 million EUR for each. The first two incoming remittances had been exchanged into currency B and transferred out to Country B a few days ago. The third incoming remittance has been held by the remittance department.
As noted from the KYC profile, the corporate customer is working in the wood industry. with the last account review completed 3 months ago. Since the account's opening. there has been no history of a large amount of funds flowing through the account. The investigator conducts an Internet search and finds that the remitter is a food beverage company.
The same morning, the investigator receives a call from a financial intelligence unit (FIU) inquiring about the same incident. The FIU states that it will issue a warrant to freeze the account on the same day.
After further review, the decision is made that transactions appear suspicious. Which are the next steps the investigator should take? (Select Two.)
- A. Close the customer's accounts since the FIU is issuing a warrant to freeze the funds.
- B. Provide additional information to the LE upon receiving a formal request.
- C. Contact local LE and advise them of the investigation details to help speed up the investigation and prosecution.
- D. Gather all the information that would be useful for law enforcement (LE) and recommend filing a SAR/STR
- E. Close the investigation as the FIU is already on this matter, and they will inform LE if needed.
Answer: B,D
Explanation:
Explanation
The correct answer is C and E.
The investigator should provide additional information to the LE upon receiving a formal request, and gather all the information that would be useful for LE and recommend filing a SAR/STR. These steps are consistent with the best practices of conducting financial crime investigations and reporting suspicious activity. The investigator should not close the customer's accounts or the investigation, as this may interfere with the ongoing LE inquiry and violate the FI's policies and procedures. The investigator should also not contact local LE directly, as this may compromise the confidentiality of the investigation and the FIU's authority. References:
Advanced CAMS-FCI Study Guide, Chapter 4: Reporting Suspicious Activity, pages 40-411 Advanced CAMS-FCI Study Guide, Chapter 5: Governance of an AFC Investigations Unit, pages
48-491
Advanced CAMS-FCI Certification | ACAMS
NEW QUESTION # 34
An AML investigator at a bank identifies an unusually high number of deposits from a few customers resulting from the encashment of multiple gambling tickets from a legitimate gambling company. It is noted that the transactions are inconsistent with the customers' profiles and that reverse (corrective) transactions did not occur. Which suspicious activity is most likely?
- A. The winning tickets are traded to criminals who. in turn, use the customers' accounts.
- B. The gambling company created fictitious transactions in an attempt to misrepresent the size of its business activity.
- C. The customers deposited fake winning tickets.
- D. The customers are attempting to evade income tax.
Answer: A
Explanation:
Explanation
The correct answer is A because this scenario describes a possible case of ticket laundering, which is a form of money laundering where criminals use gambling tickets to disguise the source of their illicit funds. The customers who deposit the tickets are either complicit or unaware of the scheme, and they receive a commission or a fee for their service. The other options are not likely because they do not explain why the customers would deposit multiple tickets from the same gambling company and withdraw cash the next day.
References: : Ticket Laundering: A Money Laundering Method
NEW QUESTION # 35
During a review, an analyst notices discrepancies between a customer's nature of business listed on the business registry and what was stated on the customers application. The analyst should:
- A. close the review as there is no adverse news in the public domain.
- B. clarify discrepancies noted in the customer's declared profile given the downstream impact on the risk assessment.
- C. review all documents for whether certified true copies are submitted.
- D. accept discrepancies in the information given the onboarding team did not flag any issue.
Answer: B
Explanation:
Explanation
The analyst should clarify discrepancies noted in the customer's declared profile given the downstream impact on the risk assessment. This is because discrepancies between the customer's nature of business and the information on the business registry may indicate that the customer is not operating a legitimate business or is trying to conceal its true activities. The analyst should verify the customer's identity, source of funds, and purpose of transactions to ensure that the customer's risk profile is accurate and consistent with the Fl's risk appetite.
References: Leading Complex Investigations Certificate, Module 2, page 9.
NEW QUESTION # 36
Law enforcement (LE) suspects human trafficking to occur during a major sporting event LE officers asked several financial institutions (FIs) to monitor financial transactions occurring before, during, and after the event.
An investigator identified a pattern linked to a business. The business' account received multiple even dollar deposits between midnight and 4:00 AM. They occurred each day for several days prior to the date of the sporting event. Also, large cash deposits, typically between 2,000 USD and 3,000 USD. made by a person to the business' account occurred in many branches in the days after the sports event.
There was little information about the company. The company did not have any history of employee payroll expenses or paying taxes. Expenses from the business account included air travel and hotel expenses. Searches about the person making cash deposits showed little. An online social media platform webpage with the individual's name showed ads for dates1' and "companionship." The Fl wants to create an automated alert for human trafficking money laundering after this investigation.
Which activity type should they target?
- A. Payments made for virtual currency
- B. Deposits made within days of major sporting events
- C. Multiple deposits between midnight and 4:00 AM
- D. Payments made to multiple hotels in the same city
Answer: C
Explanation:
Explanation
The activity type that the FI should target for creating an automated alert for human trafficking money laundering is multiple deposits between midnight and 4:00 AM (B). This is because this pattern is consistent with the indicators of human trafficking identified by the Financial Action Task Force (FATF) and the Egmont Group1, which include:
Frequent cash deposits, often in round amounts, outside of normal business hours Deposits made at different branches or ATMs in various locations Lack of information about the nature and purpose of the business Involvement in online platforms that advertise sexual services Expenses related to travel and accommodation The other options are not as relevant or specific as option B. Payments made to multiple hotels in the same city (A) could be a legitimate business expense or a sign of other types of money laundering, such as tax evasion or fraud. Deposits made within days of major sporting events could also be explained by other factors, such as increased tourism or gambling. Payments made for virtual currency (D) are not directly related to human trafficking, although they could be used to facilitate money laundering in general.
References: 1: FATF and Egmont Group, Financial Flows from Human Trafficking, July 2018, available at FATF
NEW QUESTION # 37
A client that runs a non-profit organization that aids refugees in leaving their home countries received a remittance from a money services business that was ten times the average. The client was recently detained for providing falsified passports to illegal immigrants. Which predicate offenses could be considered in the SAR/STR? (Select Two.)
- A. Terrorist financing
- B. Antiques smuggling
- C. Narcotics trafficking
- D. Tax evasion
- E. Human smuggling/trafficking
Answer: A,E
Explanation:
Explanation
The correct answer is A and B because human smuggling/trafficking and terrorist financing are both predicate offenses for money laundering that could be related to the client's activities. Option C is incorrect because there is no indication of narcotics trafficking in the scenario. Option D is incorrect because there is no indication of antiques smuggling in the scenario. Option E is incorrect because there is no indication of tax evasion in the scenario.
References: Advanced CAMS-FCI Certification Handbook, page 10; Financial Crime Typologies - Intermediate Certificate, Module 2.
NEW QUESTION # 38
As part of an internal fraud investigation, an AML officer has decided to interview an employee. Which statement is most consistent with best practices?
- A. Information on the employee can be gathered from coworkers and supervisors before the employee is interviewed.
- B. Prior to the interview, the investigator should inform the employee about the allegations.
- C. The employee should be notified that failing to cooperate can lead to loss of employment.
- D. The employee should be supplied with all information about any ongoing fraud investigations.
Answer: A
Explanation:
Explanation
As part of an internal fraud investigation, an AML officer should gather information on the employee from coworkers and supervisors before the interview, as this can help to establish a baseline of the employee's behavior, role, and responsibilities, and identify any red flags or anomalies. The other options are not consistent with best practices because they can compromise the integrity of the investigation, violate the employee's rights, or discourage cooperation.
References: Advanced CAMS-FCI Certification Handbook, page 28.
NEW QUESTION # 39
An EU bank account received 1.8 million EUR from a Swiss bank. The EU bank determines the originator was indicted by U.S. law enforcement, arrested in Switzerland, and extradited for alleged insider trading.
Which is the best reason the EU bank should file a SAR/STR?
- A. The originator was indicted by U.S. law enforcement.
- B. The Swiss bank filed a SAR/STR with the Money Laundering Reporting Office Switzerland.
- C. The events raise concerns that the payment represents proceeds from insider trading.
- D. Insider trading is a predicate offense in the U.S. and Switzerland.
Answer: C
Explanation:
Explanation
The best reason the EU bank should file a SAR/STR is that the events raise concerns that the payment represents proceeds from insider trading, which is a form of market abuse and a predicate offense for money laundering in many jurisdictions. The fact that the originator was indicted by U.S. law enforcement, arrested in Switzerland, and extradited for alleged insider trading indicates that there is a strong suspicion that the funds are derived from criminal activity. The other options are not sufficient reasons to file a SAR/STR, as they do not directly relate to the nature or source of the funds.
References: [Financial Action Task Force Report on Money Laundering and Terrorist Financing Risks and Vulnerabilities Associated with Gold], page 17 : [Leading Complex Investigations Certificate], page 12
NEW QUESTION # 40
CLIENT INFORMATION FORM Client Name: ABC Tech Corp Client ID. Number: 08125 Name: ABC Tech Corp Registered Address: Mumbai, India Work Address: Mumbai, India Cell Phone: "**"'" Alt Phone:
"*""* Email: ........"
Client Profile Information:
Sector: Financial
Engaged in business from (date): 02 Jan 2020 Sub-sector: Software-Cryptocurrency Exchange Expected Annual Transaction Amount: 125,000 USD Payment Nature: Transfer received from clients' fund Received from: Clients Received for: Sale of digital assets The client identified itself as Xryptocurrency Exchange." The client has submitted the limited liability partnership deed. However, the bank's auditing team is unable to identify the client's exact business profile as the cryptocurrency exchange specified by the client as their major business awaits clearance from the country's regulator. The client has submitted documents/communications exchanged with the regulator and has cited the lack of governing laws in the country of their operation as the reason for the delay.
During the financial crime investigation, the investigator discovers that some of the customer due diligence (CDD) documents submitted by the client were fraudulent. The investigator also finds that some of the information in the financial institution's information depository is false. What should the financial crime investigator do next?
- A. Report collusion between the cryptocurrency exchange and internal staff in the internal hotline or whistle-blowing channel.
- B. Contact the client directly and obtain the relevant notarized documents and information.
- C. Request that the relationship manager conduct a CDD refresh as it is a material trigger.
- D. Escalate to the compliance officer/money laundering reporting officer to file a SAR/STR.
Answer: D
Explanation:
Explanation
The correct answer is C. Escalate to the compliance officer/money laundering reporting officer to file a SAR/STR. This is because the financial crime investigator has found evidence of fraudulent documents and false information, which indicate a high risk of money laundering or other financial crimes. The investigator should not contact the client directly, as this may tip them off or compromise the investigation. The investigator should also not report collusion between the cryptocurrency exchange and internal staff, as this is an assumption that has not been verified. The investigator should not request a CDD refresh, as this is not sufficient to address the serious issues identified.
References:
Advanced CAMS-FCI Study Guide, page 291
Advanced CAMS-FCI Study Guide, page 311
Advanced CAMS-FCI Study Guide, page 331
1: https://www.acams.org/en/certifications/advanced-cams/advanced-financial-crimes-investigations
NEW QUESTION # 41
A financial institution (Fl) receives an urgent request for information from the financial intelligence unit (Fl country. According to FATF recommendations, which is the best action for the FI to take?
- A. Request an official court subpoena with details of the investigation.
- B. Establish a committee from different areas of the Fl to determine if the request should be answered.
- C. ling the financing of terrorism that could imply an imminenl threat in the
- D. Provide as much information as possible to the FIU immediately.
- E. Inform the public relations department to prepare for negative news.
Answer: D
Explanation:
Explanation
The correct answer is B because the FATF recommendations state that financial institutions should provide feedback to the FIU as quickly as possible, especially in cases involving the financing of terrorism that could imply an imminent threat to the country. Option A is incorrect because requesting an official court subpoena would delay the response and might not be necessary for the FIU to access the information. Option C is incorrect because establishing a committee would also delay the response and might not be in compliance with the FIU's request. Option D is incorrect because informing the public relations department is irrelevant to the question and might compromise the confidentiality of the investigation.
References: FATF Recommendations, Recommendation 29; Leading Complex Investigations Certificate, Module 4.
NEW QUESTION # 42
When crafting internal procedures on writing and submitting SARs/STRs, one should:
- A. include attachments with the SARs/STRs as all information needs to be at the disposal of the financial intelligence unit (FIU)
- B. use internal keywords and standard industry terms to better provide context within which the suspicious activity was identified.
- C. adhere to home junsdiction guidelines across the whole group when local requirements of the country of operation and home jurisdiction conflict.
- D. consider the guidelines issued by the national financial intelligence unit {FIU) and local regulator and incorporate any country-specific requirements.
Answer: D
Explanation:
Explanation
When writing and submitting SARs/STRs, one should consider the guidelines issued by the national financial intelligence unit (FIU) and local regulator and incorporate any country-specific requirements. This ensures that the reports are compliant with the relevant laws and regulations and provide useful information to the authorities. The other options are either incorrect or not best practices.
References: Advanced CAMS-FCI Study Guide, page 48-49.
NEW QUESTION # 43
Which pattern of activity most strongly indicates an individual is a foreign terrorist fighter?
- A. A large cash advance on a credit card and purchases at travel and sporting goods websites
- B. A large purchase at a gas station immediately followed by several smaller purchases at an electronics store
- C. A series of small deposits followed by a large international wire to a well-known international charity
- D. A series of small cash deposits made in rapid succession totaling just over 10,000 USD followed by a purchase at a jewelry store
Answer: A
Explanation:
Explanation
The pattern of activity that most strongly indicates an individual is a foreign terrorist fighter is a large cash advance on a credit card and purchases at travel and sporting goods websites. This is because this pattern may suggest that the individual is preparing to travel to a conflict zone and purchase equipment or supplies for terrorist activities. According to the United Nations Office on Drugs and Crime, some of the indicators of foreign terrorist fighters include1:
Sudden or increased financial activity, such as cash withdrawals, transfers, or deposits, especially in large amounts or involving foreign currency or locations.
Purchases of travel-related items, such as airline tickets, passports, visas, luggage, or clothing, especially to or from high-risk destinations or transit hubs.
Purchases of items that could be used for terrorist purposes, such as weapons, explosives, chemicals, communication devices, or survival gear.
Changes in behavior, such as expressing radical views, cutting ties with family or friends, joining extremist groups, or displaying signs of emotional distress.
References:
Foreign Terrorist Fighters - United Nations Office on Drugs and Crime
NEW QUESTION # 44
A financial institution (Fl) banks a money transmitter business (MTB) located in Miami. The MTB regularly initiates wire transfers with the ultimate beneficiary in Cuba and legally sells travel packages to Cuba. The wire transfers for money remittances comply with the country's economic sanctions policies. A Fl investigator on the sanctions team reviews each wire transfer to ensure compliance with sanctions and to monitor transfer details.
An airline located in Cuba, unrelated to the business, legally sells airline tickets in Cuba to Cuban citizens wanting to travel outside of Cuba. The airline tickets are purchased using Cuban currency (CUC).
The MTB wants 100,000 USD worth of CUC. Purchasing CUC from a Cuban bank includes a 4% fee. The MTB contacts the airline to ask if the airline will trade its CUC for USD at a lower exchange fee than the Cuban bank. The airline agrees to a 1% fee. The MTB initiates a wire transfer to the airline which appears as normal activity in the monitoring system because of the business' travel package sales.
The investigator recommends that a SAR/STR be filed. What documentation should be referenced in the SAR/STR filing? (Select Three.)
- A. All documents related to the agreement between the airline and the MTB
- B. Licensing information regarding the travel agency providing tourist sales to Cuba
- C. Cumulative dollar amount of the wire transfer activity
- D. Cumulative dollar amount for transactions listing for all the MTB account's wire activity regarding travel packages
- E. Account documentation on all related accounts maintained by the MTB
- F. Airline's ticket sales and passenger list
Answer: C
Explanation:
Explanation
The most likely reason for conducting a reverse transaction is to conceal or launder illicit funds. A reverse transaction is a transaction that reverses a previous transaction, such as a refund, a chargeback, or a cancellation. Reverse transactions can be used by money launderers to obscure the source, ownership, or destination of funds, or to create false records or invoices. For example, a money launderer may initiate a wire transfer from a high-risk jurisdiction to a low-risk jurisdiction, and then reverse the transaction after receiving confirmation of the funds. This way, the money launderer can create a paper trail that shows legitimate funds coming from a low-risk jurisdiction, while hiding the true origin of the funds.
References: Advanced CAMS-FCI Study Guide, page 40-41.
NEW QUESTION # 45
A national financial intelligence unit (FIU) is undertaking the country risk assessment for the financing of the proliferation of weapons of mass destruction (WMD). The evaluation involves determining the exposure that financial institutions (FIs) have to operations that evade sanctions. Which should be performed by the FIU to assess proliferation financing risk? (Select Two.)
- A. Analyze the domestic financial operations that are above the reporting threshold and have similar names to high-level officials of WMD proliferation sanctioned states.
- B. Evaluate a sample of the amount of false-positive and false-negative alerts that FIs have regarding proliferation sanctions evasion to determine root causes of non-detection.
- C. Prepare new regulations that increase fines for FIs that allow financial operations on behalf of WMD proliferation sanctioned states.
- D. Compare the international finance operations with national PEP lists to determine if the systems used by FIs are properly calibrated to detect WMD proliferation financing.
- E. Cross-reference the databases of international commerce/logistics transactions between the country and WMD proliferation sanctioned states with the corresponding international financial operations of those transactions.
Answer: B,E
Explanation:
Explanation
The FIU should cross-reference the databases of international commerce/logistics transactions between the country and WMD proliferation sanctioned states with the corresponding international financial operations of those transactions, as this would help identify any discrepancies or anomalies that could indicate sanctions evasion. The FIU should also evaluate a sample of the amount of false-positive and false-negative alerts that FIs have regarding proliferation sanctions evasion to determine root causes of non-detection, such as inadequate screening systems, lack of training, or human error. These actions would help the FIU assess the proliferation financing risk and provide feedback and guidance to FIs on how to improve their detection and prevention capabilities.
References: Advanced CAMS-FCI Study Guide, page 32-33; [FATF Guidance on Counter Proliferation Financing], page 15-16.
NEW QUESTION # 46
In which case should an investigator avoid escalating a suspicious event to the chief compliance officer and pursue other channels?
- A. The transaction chain is likely connected to a known member of a terrorist organization.
- B. A close family member of the chief compliance officer is the beneficiary of a cross-border transfer.
- C. An individual involved in a large sum transaction is a foreign PEP.
- D. A trade entity engages in complex trade deals involving numerous third-party intermediaries in incongruent lines of business.
Answer: B
Explanation:
Explanation
An investigator should avoid escalating a suspicious event to the chief compliance officer if there is a potential conflict of interest, such as when a close family member of the officer is involved in the transaction. In such a case, the investigator should pursue other channels, such as reporting to a higher authority or an independent committee. The other options do not present a conflict of interest and should be escalated to the chief compliance officer as part of the normal procedure.
References: Advanced CAMS-FCI Certification Handbook, page 18.
NEW QUESTION # 47
Law enforcement (LE) suspects human trafficking to occur during a major spotting event. LE officers asked several financial institutions (FIs) to monitor financial transactions occurring before, during, and after the event.
An investigator identified a pattern linked to a business. The business* account received multiple even dollar deposits between midnight and 4:00 AM. They occurred each day for several days prior to the date of the sporting event. Also, large cash deposits, typically between 2,000 USD and 3.000 USD. made by a person to the business' account occurred in many branches in the days after the sports event There was little information about the company. The company did not have any history of employee payroll expenses or paying taxes. Expenses from the business account included air travel and hotel expenses. Searches about the person making cash deposits showed little. An online social media platform webpage with the individual's name showed ads for dates" and "companionship." If the investigator uncovers evidence that foreign nationals are involved in this activity, they should also note the possible presence of:
- A. trade-based laundering.
- B. human smuggling.
- C. tax fraud.
- D. black market peso exchange.
Answer: B
Explanation:
Explanation
If the investigator uncovers evidence that foreign nationals are involved in this activity, they should also note the possible presence of human smuggling (D). This is because human smuggling is the illegal movement of people across borders, often facilitated by criminal networks that exploit vulnerable migrants. According to the FATF and Egmont Group report on Financial Flows from Human Trafficking2, "human smuggling can be closely linked to human trafficking, as smuggled migrants may become victims of trafficking along their journey or at their destination" (p. 9). The report also states that some indicators of human smuggling are similar to those of human trafficking, such as:
Frequent cash deposits or withdrawals in different locations
Use of false or fraudulent identification documents
Expenses related to travel and accommodation
Involvement in online platforms that advertise sexual services
The other options are not as relevant or specific as option D.
Tax fraud (A) is the evasion of taxes by individuals or businesses, which may or may not be related to human trafficking or smuggling. Black market peso exchange (B) is a money laundering scheme that involves exchanging illicit proceeds in one currency for another currency at a discounted rate, which is more commonly associated with drug trafficking or trade-based laundering. Trade-based laundering is the manipulation of trade transactions to disguise the origin and ownership of illicit funds, which is also more likely to be linked to drug trafficking or other types of fraud.
References: 1: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, available at ACAMS 2: FATF and Egmont Group, Financial Flows from Human Trafficking, July 2018, available at FATF
NEW QUESTION # 48
An analyst reviews an alert for high volume Automated Clearing House (ACH) activity in an account. The analyst's initial research finds the account is for a commercial daycare account that receives high volumes of large government-funded ACH transactions to support the programs. The account activity consists of checks (cheques) made payable to individual names in varying dollar amounts. One check indicates rent to another business.
An Internet search finds that the daycare company owner has previous government-issued violations for safety and classroom size needs, such as not having enough chairs and tables per enrollee. These violations were issued to a different daycare name.
Simultaneous to this investigation, another analyst sends an email about negative news articles referencing local child/adult daycare companies misusing governmental grants. This prompts the financial institution (Fl) to search all businesses for names containing daycare' or 'care1. Text searches return a number of facilities as customers at the Fl and detects that three of these businesses have a similar transaction flow of high volume government ACH funding with little to no daycare expenses.
During the investigation, it was determined that some of the checks were issued to a mother-in-law of a PEP and deposited into her account with the Fl. This customer was not found on the Fl's PEP list How should the investigator proceed in this situation"? (Select Two.)
- A. Use this case as an example to train employees to recognize potential PEPs during their investigation process.
- B. File a SAR/STR due to the potential involvement of a PEP.
- C. Send a referral to Sanctions/List Screening, or similar department/responsible individual, to ensure that the customer due diligence information is up to date.
- D. Conduct the investigation as usual, since the activity in question is not directly connected to the PEP.
- E. Reter the newly identified customers account for closure due to the high risk associated with the potential PEP.
Answer: C,D
Explanation:
Explanation
The investigator should proceed in this situation by conducting the investigation as usual, since the activity in question is not directly connected to the PEP (A) and sending a referral to Sanctions/List Screening, or similar department/responsible individual, to ensure that the customer due diligence information is up to date (D).
These actions are appropriate and prudent, as they allow the investigator to continue their analysis of the suspicious activity without being biased by the potential PEP status of the customer's relative, and they ensure that the FI has accurate and current information about its customers and their associates. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, "the FI should conduct enhanced due diligence on all parties involved in the investigation, including checking various sources of information, such as watch lists, sanctions lists, negative news, and official registries" (p. 24). The FI should also "update the customer profile with any new information obtained during the investigation" (p. 25).
The other options are not correct. The investigator should not refer the newly identified customer's account for closure due to the high risk associated with the potential PEP (B), as this could be premature or disproportionate, as well as potentially discriminatory or illegal. The investigator should not file a SAR/STR due to the potential involvement of a PEP (E), as this could also be premature or unnecessary, as well as potentially misleading or inaccurate. The investigator should not use this case as an example to train employees to recognize potential PEPs during their investigation process , as this could violate confidentiality or data protection laws, as well as compromise the investigation or alert the customer or their relative of the suspicion.
References: 1: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, available at ACAMS
NEW QUESTION # 49
Which scenarios are common to money laundering through online marketplaces and trade-based money laundering? (Select Two.)
- A. Use of fraudulent letters of credit
- B. Use of multiple freight forwarding or export companies
- C. No evidence of delivery of goods or shipping expenses
- D. Frequent conversion of foreign currency
- E. Over-valuation of the stated price of goods
Answer: C,E
Explanation:
Explanation
Money laundering through online marketplaces and trade-based money laundering both involve the manipulation of the value or quantity of goods to disguise the illicit origin of funds. Over-valuation of the stated price of goods and no evidence of delivery of goods or shipping expenses are two common indicators of such schemes. The other options are not specific to these methods of money laundering.
References: Advanced CAMS-FCI Study Guide, page 29-30.
NEW QUESTION # 50
The compliance learn is reviewing multiple data points to include in its data analytics program to detect shell or front company red flags. Which data points should the compliance team include? (Select Two.)
- A. Entities with high paid-up capital relative to monthly value of transactions
- B. Entities exhibiting transactions with declared counterparties
- C. Entities with a large number and variety of beneficiaries not declared at the time of onboarding
- D. Entities whose principal place of business is a non-residential address
- E. Entities transacting with or having relation to tax haven or high-risk countries
Answer: D,E
Explanation:
Explanation
The data points that the compliance team should include in its data analytics program to detect shell or front company red flags are entities whose principal place of business is a non-residential address and entities transacting with or having relation to tax haven or high-risk countries. These data points may indicate that the entities are not conducting legitimate business activities, but rather are used to conceal the identity or location of the true beneficiaries or owners, or to facilitate money laundering, tax evasion, or other illicit activities.
Some of the sources that support these data points as red flags are4567:
Entities whose principal place of business is a non-residential address may indicate that they have no physical presence, operations, assets, or employees. They may use addresses such as post office boxes, mail forwarding services, registered agents, or virtual offices to avoid detection or scrutiny.
Entities transacting with or having relation to tax haven or high-risk countries may indicate that they are involved in offshore financial activities that are designed to evade taxes, regulations, or sanctions. They may also be exposed to higher risks of money laundering, terrorist financing, corruption, or fraud.
References:
How to Identify a Shell Company and the Associated Red Flags
Difference between Shell, Shelf & Front Company | Sigma Ratings
Shell Companies and Money Laundering | ComplyAdvantage
General Comments Incorporation of shell companies - Singapore Police Force
NEW QUESTION # 51
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