Download ACAMS Book Questions and Answers: Anti-Money Laundering and Financial Crime and more Exams Business Statistics in PDF only on Docsity!
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- Which of the following is the most common method of laundering money through a legal money services business? A. Purchasing structured money instruments. B. Smuggling bulk-cash. C. Transferring funds through Payable Through Accounts (PTAs). D. Exchanging Colombian pesos on the black market. - ✔✔A
- In general, the three phases of money laundering are said to be: Placement: A. Structuring and manipulation. B. Layering and integration. C. Layering and smurfing. D. Integration and infiltration. - ✔✔B
- Which statement is true? A. Bust-out schemes are popular in creating large bankruptcy frauds where businesses secure increasing loans in excess of the actual value of the company or property and then run with the money, leaving the lender to foreclose and take a substantial loss. B. Cuckoo smurfing is a significant money laundering technique identified by the Financial Action Task
Force, where a form of structuring uses nested accounts with shell banks in secrecy havens. C. In its 40 Recommendations, the FATF issued a list of "designated categories of offense" that asserts crimes for a money laundering prosecution. D. E-cash is not attractive to the money launderer because it cannot be completely anonymous and does not allow for large amounts to be "transported" quickly and easily. - ✔✔A
- Which three of the following is an indication of possible money laundering in an insurance industry scenario? A. Insurance products sold through intermediaries, agents or brokers. B. Single-premium insurance bonds, redeemed at a discount. C. Policyholders who are unconcerned about penalties for early cancellation. D. Policyholders who make full use of the "free look" period. - ✔✔B C D
- Which two activities are typically associated with the black market peso exchange (BMPE) money laundering system? A. Converting illicit drug proceeds from dollars or Euros to Colombian pesos. B. Converting illicit drug proceeds from Colombian pesos to dollars or Euros. C. Facilitating purchases by Colombian importers of goods manufactured in the United States or Europe
D. Only send suspicious transaction reports to the financial intelligence unit of the country it operates in. - ✔✔C
- Which statement is true regarding the risk of Politically Exposed Persons (PEPs)? A. PEPs provide access to third parties on whom the financial institution has not conducted sufficient due diligence. B. PEPs have significantly greater exposure to the politically corrupt funds, including accepting bribes or misappropriating government funds. C. PEPs are foreign customers who inherently present additional risk as they are engaged in cross-border transactions. D. PEPs generally do not pose enhanced risks to an institution due to their political standing; rather, PEPs increase the prestige of an institution. - ✔✔B
- Dirty money, derived from criminal activities of Belgian Criminal A, is sent to a foreign bank account of Corporation B. Then in Belgium, a new investment Company C is incorporated. Criminal A is appointed as a director of Company C. Company C borrows money from the foreign Company B and buys real estate in Belgium. The real estate is rented to third parties. Director (Criminal) A also rents an apartment in the building. With the funds generated by the rent, Company C pays off the loan to Corporation B, and the salary of Director A. Criminal A now converted his dirty money in legal funds.
This laundering method is commonly referred to as what? A. Offsetting real estate transactions. B. Loan back. C. Cuckoo smurfing. D. Loan manipulation. - ✔✔B
- A new customer approaches a bank to open a commercial account. The customer provides an address for the account located across the city from the branch. When asked by the account representative if the customer requires any additional banking services, the customer responds she is also interested in opening a personal investment account. The account representative refers the customer to their broker-dealer. The customer tells the firm representative she has never had a brokerage account before and has a few questions about how an investment account works. The customer asks how deposits can be made into her account, if there are any reporting requirements, and how to go about moving balances out of the account using wire transfers. No questions are asked about fees associated with these transactions. Which three items would be considered suspicious? A. The customer asks many questions about the brokerage account, b - ✔✔A C D
- International trade in goods and services can be used as either a cover for money laundering or as the laundering mechanism itself. What is MOST important for the
- The Third EU Money Laundering Directive of 2005 applies to which of the following firms? A. Auditors, estate agents based in the EU. B. U.S. Financial institutions covered by the USA Patriot Act. C. Shell firms inside and outside the EU. D. EU based high value good dealers who deal in cash of 10,000 Euro or more. - ✔✔A
- According to the EU Directives of 2001, an independent legal professional is obligated to report suspicion of money laundering in a client relationship when: A. Representing a client in a legal matter. B. Ascertaining the legal position for a client. C. Participating in financial or corporate transactions. D. Obtaining information associated with a judicial proceeding. - ✔✔C
- Which of the following is the most difficult regulatory challenge facing a foreign financial institution with a correspondent banking relationship in the U.S.? A. USA Patriot Act. B. Basel Due Diligence Principles for Banks. C. FATF Guidance on Terrorist Financing. D. UN Security Council Resolution on Correspondent Banking. - ✔✔A
- Which were the Basel Committee's two main motivations to encourage strong Know Your Customer programs in its
paper "Customer Due Diligence for Banks?" A. A. Mirror FATF's KYC Recommendations. B. Meet European Union guidelines. C. Protect the safety and soundness of banks. D. Protect the integrity of banking systems. - ✔✔C D
- What is the definition of a predicate offense? A. Lawful or unlawful activity that involves willful blindness, and if there is an international element to the crime, can lead to a suspicious activity report. B. Unlawful activity whose proceeds, if involved in the transaction, can give rise to prosecution for the crime of money laundering. C. An interface which is the underlying segment of a suspicious transaction monitoring system. D. A specified unlawful activity that is committed through concentration accounts deceiving customers that are not directly related to the account. - ✔✔B
- What is considered a beneficial owner of an account? A person or entity: A. That has direct signatory authority over an account, and whose name appears on the account. B. That is ultimately entitled to the funds in the account, even though his name may not appear on the account. C. That is the originator and the destination of most (but not all) transactions conducted within the account, but who does not ultimately control such funds. D. That is a gatekeeper, has the legal title to the account,
jurisdiction. D. Require money laundering offenses to prove that the offender has actual knowledge of a criminal connection to the funds. - ✔✔A B C
- Which three statements are true about the 3rd EU Directive on Money Laundering of 2005? It: A. A. Was proposed in order to update European Community legislation in line with the Financial Action Task Force (FATF) 40 Recommendations. B. Largely replicates the definitions included in the Second Directive, including the definition of a politically exposed person. C. Repeats the main customer due diligence requirements of the first and second Directives, but adds more detail to the requirements by, for example, including a specific requirement to identify the beneficial owner if one exists and includes ongoing monitoring requirements. D. Requires firms to apply the customer due diligence requirements to existing customers at appropriate times on a risk sensitive basis. - ✔✔A C D
- The FATF 40 Recommendations say that countries should: A. Not allow bearer shares and legal persons that are able to issue bearer shares. B. Gather statistics on STRs; prosecutions and convictions; on property frozen, seized and confiscated; and on mutual legal assistance, but not
necessarily on other international requests for cooperation. C. Consider the feasibility of a system where banks and other financial institutions and intermediaries would report currency transactions without indicating a minimum fixed amount. D. Not approve the establishment or accept the continued operation of shell banks. - ✔✔D
- Among the Principles for Information Exchange Between Financial Intelligence Units for Money Laundering Cases, issued by the Egmont Group on June 13, 2001, we find which of the following? A. Information-sharing agreements must be drafted according to a model issued by the Egmont Group. B. Information-sharing agreements should not allow room for case-by-case solutions to specific problems in case of NCCT countries. C. Information exchanged between FIUs may be used only for the specific purpose for which the information was sought or provided. D. The requesting FIU may make use of the information shared by a disclosing FIU for administrative purposes without the prior consent of the disclosing FIU. - ✔✔C
- In which stage of money laundering would you classify depositing small amounts of cash into several related accounts? A. Integration. B. Structuring.
B. Integration. C. Investing. D. Structuring. - ✔✔D
- In which case might a Suspicious Transaction Report NOT be necessary? A. A customer who deposits money of suspicious origins and refuses to answer questions from the financial institution's staff. B. A customer who tries to move money that is suspected of being derived from criminal activity. C. A customer who owns a large supermarket and deposits large amounts of cash several times a day. D. A customer whose account is showing transaction activities which are beyond his known financial capability. - ✔✔C
- As part of their role in fighting money laundering, financial institutions should: A. Designate a compliance officer. B. Depend solely on The State's staff for combating money laundering. C. Refuse small cash deposits under the reporting threshold. D. Not open accounts for people from high risk jurisdictions. - ✔✔A
- What could happen to compliance officers if they do not comply with the anti-money laundering laws and
regulations? A. Their employers could face reputation damage, but the employee is immune from penalty. B. Loss of job, prison penalties and fines, negative reputation to their employer. C. Nothing. Only the financial institution's legal counsel will be responsible for complying with laws. D. Nothing. Only the staff directly handling transactions have to worry. - ✔✔B
- What is willful blindness defined as? A. Failing to file a Suspicious Transaction Report for dealing with companies or financial institutions from offshore tax havens. B. Not following customer identification procedures as set out in the institution's procedures. C. Deliberate avoidance of knowledge of the facts or ignoring obvious money laundering red flags. D. Deliberate avoidance of a customer based on the assumption that his or her behavior suggested a potential threat as money launderer and/or terrorist. - ✔✔C
- In anti-money laundering terminology a "red flag" is: A. A warning sign used to bring attention to potentially suspicious, risky transactions or activities. B. A general banking term used once the balance is negative / overdue. C. The standard flag of countries not cooperative in fighting money laundering and terrorist financing.
- Why is a Payable Through Account vulnerable to money laundering? A. These are master correspondent accounts that allow the customers of the foreign bank to do a wide range of transactions. B. These are correspondent accounts located in a noncooperative country or territory. C. These are nested correspondent accounts at a foreign shell bank with customers with whom the domestic bank did not exercise due diligence. D. These are master escrow accounts on which a domestic bank generally does not conduct periodic verification. - ✔✔A
- What is the reasoning behind implementing a "risk-based anti-money laundering approach"? A. It will keep the regulators focused on money laundering controls in sectors beyond banks. B. Institutions can best use their limited resources to focus on matters where the money laundering risks are highest. C. A quantitative approach will generate better results than a qualitative approach. D. It allows the institution to focus on selling products that have a better return on investment. - ✔✔B
- According to the FATF 40 Recommendations, "designated non-financial businesses and professions" include:
A. Casinos, real estate agents and dealers in precious stones. B. Money service businesses, gatekeepers, and issuers of electronic money. C. Dealers in precious metals, lawyers, commodity futures traders. D. Life insurance companies, real estate agents and notaries. - ✔✔A
- According to the FATF 40 Recommendations, the threshold for identifying occasional customers at financial institutions is: A. EURO/US$ 5,000. B. EURO/US$ 10,000. C. EURO/US$ 15,000. D. EURO/US$ 20,000. - ✔✔C
- Tom works as a compliance officer at ABC Bank. He is looking at the transactions of one of the bank's customers, Mr. Brown, the owner of a check cashing company. Over the last six months, Mr. Brown has not made withdrawals of cash against check deposits. He also deposited two checks for US$2,000 each that were issued by a casino. When checking the KYC file, Tom sees that, when opening the account, Mr. Brown had requested detailed information about fees and commission that are charged by the bank. What should arouse Tom's suspicion the most? Mr. Brown: A. Deposited checks from casinos.
activity of several customers. What would arouse her suspicion the MOST? A. A customer who owns several check cashing companies in town and rents safe deposit boxes at different branches. B. A customer who avoids taking vacations. C. A small business that provides financial statements which are not prepared by an accountant. D. A customer involved in investment management who guarantees a very high rate of return, well above what other competitors can offer. - ✔✔D
- Which of the following best describes the "alternative remittance system"? A. The transfer of values between countries, outside of the legitimate banking system. B. A non-electronic data remittance system used in several NCCT countries to report suspicious activities. C. Old-fashioned reporting requirements commonly used in non-cooperative countries and territories. D. The transfer of funds between two or more financial institutions using concentration accounts. - ✔✔A
- An AML compliance officer was reviewing customers at XYZ Bank and one of the customers (Mr. Sam Tropicana) attracted her attention. Through a period of several months, cash deposits and withdrawals were transacted through his account with amounts ranging between US $7,500 and US $17,000. In addition, Sam deposited
two checks, issued by a casino into his account for US $32,000 each. When opening the account, Sam stated that he operated an import/export company. Which of the following additional items should arouse the suspicion of an anti-money laundering compliance officer the most? A. Sam maintained a personal account as well as the business account. B. Sam's home telephone number was disconnected last month. C. Sam asked for a letter of credit to finance some imports from a new supplier. D. Sam conducted large cash transactions for his import/ export business. - ✔✔D
- Which three of the following statements are true? A. Online gambling provides an excellent method of laundering because transactions are conducted primarily through credit or debit cards and the sites are typically unregulated offshore firms. B. An institution can know when a credit card is used for online gambling transactions because the cards rely on codes that illustrate the type of transactions. C. Online gambling provides an excellent method of laundering because it lends itself to any type of cash movement and there is no face-to-face contact with the customer. D. Some banks no longer allow the use of credit cards for online gambling transactions. - ✔✔A B D
