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ACAMS Practice Questions
A bank receives an anonymous tip from an employee about another employee through its confidential hotline. Which activity warrants further review? A. A mortgage officer works with home loan applicants to resolve adverse credit issues B. An employee in bookkeeping accepts funds transfer requests from customers via telephone Most Voted C. An employee in accounting works with customers to help understand how to reduce service charges D. A teller distributes bank brochures to customers who regularly conduct cash transactions below reporting limits - โ โ B
A law enforcement official calls a bank inquiring about a customer who is currently under investigation. The law enforcement official requests information about the customer.How should the bank respond? A. Confirm the customer is either a current or former customer
B. Inform the board of directors before responding to the request C. Provide the requested information to help aid in the investigation D. Request a formal letter be submitted to verify the validity of the request - โ โ D A non-U.S. bank wants to open an account at Bank A, which is a U.S.-based bank.Which information must Bank A obtain under the USA PATRIOT Act? A. A complete client list from the non-U.S. bank B. The identity of owners and percentage of ownership of the non-U.S. bank C. The structure and identity of the management team at the non-U.S. bank D. The details of the non-U.S. bank's anti-money laundering compliance training program - โ โ C
Which method do terrorist financiers use to move funds without leaving an audit trail? A. Extortion B. Cash couriers C. Casa de cambio
D. All of the above - โ โ D
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 redeem the policy within the free look period - โ โ B, C, and D In which stage of money laundering would you classify the use of laundered funds to purchase high- value assets and luxury items? A) Integration B) Structuring C) Placement D) Construction - โ โ A The tactic in which individuals make multiple deposits in small quantities to avoid detection is called:
A) Paralleling. B) Integration. C) Investing. D) Structuring. - โ โ D What are three specific sources of funds for financing terrorism? A) Kidnapping for ransom B) Trafficking in humans and arms C) Contributions to charities D) Wiring funds internationally - โ โ A, B, and C What is the definition of a respondent bank? A) A bank for which another financial institution establishes, maintains, administers or manages a correspondent account B) A bank that provides international services to another local financial institution C) A foreign bank that does not have a permanent staff
C) A launderer can launder money by prepaying his or her credit card using funds that are already in the banking system, creating a credit balance on his account, and requesting a credit refund. D) A launderer can use illicit funds that are already in the banking system to pay his or her credit card bill for goods purchased, which is an example of placement. - โ โ C
Why is a payable through account vulnerable to money laundering? A) It can be very difficult to conduct due diligence on the foreign institution customers who are ultimately using these accounts. B) These are concentration accounts located in a domestic branch of a foreign bank. 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. - โ โ A
A new products manager wants to propose a product involving prepaid cards but the AML officer sees some problems. What would be three risks that the AML officer might raise? A) The new product would enable customers to move funds around the world quickly. B) The product can be reloaded and used anonymously. C) There might be an influx of new customers who have not been vetted seeking to use the product. D) The cards could be used as a substitute for bulk-cash smuggling. - โ โ A, B, and D When money laundering is prevalent, criminals often try to bribe government officials, lawyers, and employees of financial organizations to facilitate their criminal activities. Which of the following might be a result of this activity? A. Corruption B. Secrecy havens C. Inflation
B) To make the business appear profitable to investors C) To invest in real property D) To avoid paying taxes on legitimate business income - โ โ A
Why is it difficult for legitimate businesses to compete against front companies? A) Front companies can access substantial illicit funds. B) Front companies can access capital funds from financial markets. C) Front companies can access private banking resources. D) Front companies can access substantial investment vehicles. - โ โ A By using front companies and other investments in legitimate companies, money launders can control whole industries or sectors of the economy in certain countries. This criminal activity increases the potential of which of the following results? A) Reallocation of resources in commodity prices B) Monetary policy and microeconomic instability C) Reallocation of resources in asset prices
D) Monetary and economic instability - โ โ D
Money laundering and terrorist financing can weaken a country's financial sector and also negatively affect the stability of which sectors? A. All of these are correct B. State and local government entities C. Nonprofit and charitable organizations D. Large corporations and corporate entities - โ โ A
Which type of risk involves the potential that adverse publicity, whether accurate or not, will cause a loss of public confidence in the integrity of a financial organization? A. Reputational risk B. Operational risk C. Credit risk D. Legal risk - โ โ A Financial institutions face which of the following additional challenges as a result of relying on the proceeds of crime?
C. Legal risk D. Financial risk - โ โ C
Which type of risk involves the potential for loss resulting from too much credit or loan exposure to one borrower or group of borrowers? A. Regulatory risk B. Financial risk C. Credit risk D. Concentration risk - โ โ D Why would a bank, such as Guardian Bank, want to open US correspondent accounts? A. To provide its clients with access to the US financial system B. To provide its clients with financial services in their currency C. To provide its clients with private banking services D. To provide its clients with Fedwire account services - โ โ A
US correspondent banks that offer correspondent banking services are subject to which money laundering risk? A. The US correspondent bank does not know the customers of the respondent bank whose transactions will flow through the correspondent account. B. The US correspondent bank cannot perform a customer risk assessment on the respondent bank. C. The respondent bank does not know the customers of the US correspondent bank whose transactions will flow through the correspondent account. D. The US correspondent bank cannot perform enhanced due diligence on the respondent bank - โ โ A Guardian Bank opens a US correspondent account. What AML measures should the correspondent bank take at account opening? A. Conduct customer due diligence on Guardian Bank's customers. B. Request the USA PATRIOT Act Certificate from Guardian Bank. C. Request Guardian Bank's Egmont Group AML Questionnaire. D. Request Guardian Bank's AML/CFT program certificate. - โ โ B
C. PTAs differ from correspondent accounts whereby: Foreign bank's customers directly control funds at the correspondent bank VERSUS traditional correspondent relationship where correspondent bank takes orders from its customers and passes them on to the respondent bank. - โ โ B Which statement is true? A. Concentration accounts are internal accounts established to facilitate the processing and settlement of multiple or individual customer transactions within the bank, usually on the same day. B. Concentration accounts are also known as correspondent accounts. Frequently used to facilitate transactions for private banking, trust and custody accounts, funds transfers, and international affiliates. C. Correspondent banking is where banks open direct bank accounts for politically exposed persons located in foreign jurisdictions. D. Omnibus accounts are different from concentration accounts because they do not provide the customer direct access to the account. - โ โ A Why is a Payable Through Account vulnerable to money laundering?
A. These are master correspondent accounts established at a domestic bank by a foreign bank that allow the customers of the foreign bank to do a wide range of transactions. B. These are correspondent accounts located in a non-cooperative 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. - โ โ A 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.
A. Client risk. B. Legal, operational, and concentration risks. C. M&A risk. D. Legal, operational, concentration, and reputational risks - โ โ D What method can a bank implement to prevent the smurfing of funds into an account? A. Only accept cash deposits with proof of its origin. B. Request identification of a person making a single cash deposit into an account held in his/her name. C. Prohibit cash deposits of more than $5,000 on consecutive days. D. Request identification of a person making a cash deposit into an unrelated account located outside the geographic location where the account is located. - โ โ D
Mr. X is a narcotics distributor. He utilizes smurfs to deposit the cash sales of drug proceeds into three accounts maintained at three different banks. At each bank, Mr. X then executes a wire transfer on a weekly basis for 85% of the total
balance in the account to a private investment company called 'XYZ Trading Ltd.' located in an offshore jurisdiction. A financial investigator reviewing the account at each bank is trying to determine what stages of money laundering Mr. X is engaged in. Which of the following is true? A. Integration only. B. Placement and integration. C. Placement and layering. D. Placement, layering, and integration. - โ โ C
A financial investigator at Offshore Bank is reviewing the account of XYZ Trading Ltd. in response to weekly incoming wire transfers. The investigator notices the total of the weekly wire transfers is evenly distributed throughout the month in wire transfers to LMO Imports GmbH in Frankfurt and TRI MFG Ltd. in London. Which of the following phase(s) of money laundering is XYZ Trading using with Offshore Bank? A. Integration only. B. Placement only. C. Layering only.
