Get Ready to Pass the CAMS-FCI exam with ACAMS Latest Practice Exam
Get Prepared for Your CAMS-FCI Exam With Actual ACAMS Study Guide!
NEW QUESTION # 16 
In a review of the account activity associated with Nadine Kien, an investigator observes a large number of small- to medium-size deposits from numerous individuals from several different global regions. The money is then transferred to a numbered company. Which is the next best course of action for the investigator?
- A. File a SAR/STR on the account activity in relation to a potential funnel account.
- B. No further action is required as the customer is already rated at high-risk and the monthly spending is within expectations.
- C. Recommend the account for exit due to frequent global transactions.
- D. Complete the monthly review and note the activity for next month's review.
Answer: A
Explanation:
Explanation
The next best course of action for the investigator is to file a SAR/STR on the account activity in relation to a potential funnel account. This is because a funnel account is a type of money laundering scheme that involves depositing funds from multiple sources into a single account, and then transferring them to another account, often in a different jurisdiction. A funnel account can be used to conceal the origin, ownership, and destination of illicit funds, and to evade currency transaction reporting requirements. The investigator should report the suspicious activity to the relevant authorities and document the findings and actions taken. The other options are incorrect because:
A: Completing the monthly review and noting the activity for next month's review is not sufficient, as it delays the reporting of a possible money laundering scheme and exposes the financial institution to regulatory and reputational risks.
C: Recommending the account for exit due to frequent global transactions is not appropriate, as it does not address the underlying issue of potential money laundering and may alert the customer of the investigation.
D: No further action is required as the customer is already rated at high-risk and the monthly spending is within expectations is not acceptable, as it ignores the red flags of a funnel account and fails to comply with the anti-money laundering obligations of the financial institution.
References:
Advanced CAMS-FCI Certification | ACAMS, Section 2: Investigating Financial Crimes, page 9 Leading Complex Investigations Certificate | ACAMS, Module 2: Identifying Red Flags, page 5
NEW QUESTION # 17
Law enforcement agents arrive at a broker-dealer's premises with a search warrant. In addition to cooperation with the warrant, which instructions should the person in charge of the broker-dealer provide to their employees?
- A. Sign consent forms permitting the agents to search employees' offices.
- B. Provide agents with unlimited access to customers' personal data.
- C. Volunteer information not requested by the agents that the employees think may be useful.
- D. Take notes on the questions and comments made by the agents.
Answer: D
Explanation:
Explanation
The instruction that the person in charge of the broker-dealer should provide to their employees is to take notes on the questions and comments made by the agents (A). This is because taking notes can help the employees to recall and document what happened during the search warrant execution, which can be useful for legal or regulatory purposes. According to ACAMS3, "the FI should instruct its staff to cooperate with LE agents during a search warrant execution, but also to take notes of what is being searched, seized, or asked by the agents" (p. 35). The FI should also "keep copies of any documents or records that are taken by LE agents" (p.
35).
The other instructions are not correct. The person in charge of the broker-dealer should not instruct their employees to sign consent forms permitting the agents to search employees' offices (B), as this is unnecessary and potentially risky, as the agents already have a valid search warrant that authorizes them to search the premises. The person in charge of the broker-dealer should not instruct their employees to provide agents with unlimited access to customers' personal data , as this could violate privacy or data protection laws, as well as compromise customer trust and confidentiality. The person in charge of the broker-dealer should not instruct their employees to volunteer information not requested by the agents that they think may be useful (D), as this could interfere with the LE investigation or expose them to legal or regulatory risks.
References:
Introduction to Transnational Organized Crime
ACAMS Law Enforcement and Financial Crimes Investigations eLearning Course Module Law Enforcement Requests and Actions
NEW QUESTION # 18
An investigator at a bank triggered a review in relation to potential misuse of legal persons and a complex network of corporate entities owned by customer A. For the investigator to provide a holistic view of the underlying risk, which action should be the initial focus of the investigation?
- A. Find out whether customer A has relationships with other financial institutions.
- B. Conduct a network link analysis on all customers of the bank.
- C. Review the customer due diligence documents of each entity and examine the year of incorporation and onboarding channel.
- D. Use data analytics to extract and analyze the linkages between the different entities.
Answer: C
Explanation:
Explanation
The initial focus of the investigation should be to review the customer due diligence documents of each entity and examine the year of incorporation and onboarding channel, as this would help identify the beneficial owners, the source of funds, and the purpose of the business relationship. This would also help determine if the entities are shell companies or have any red flags that indicate potential misuse of legal persons. Using data analytics to extract and analyze the linkages between the different entities would be a subsequent step, not the initial one. Conducting a network link analysis on all customers of the bank would be too broad and time-consuming. Finding out whether customer A has relationships with other financial institutions would be relevant, but not the initial focus. References: [Advanced CAMS-FCI Study Guide], page 44-45; [FATF Guidance on Transparency and Beneficial Ownership], page 12-13.
NEW QUESTION # 19
The training department is conducting awareness training for unusual customer identification scenarios. Which two indicators should be included? (Select Two.)
- A. The customer's internet protocol address does not match the identifying information provided during online registration.
- B. The customer's name and home address cannot be verified
- C. The customer requests payment of proceeds to an unrelated third party.
- D. The customer opens the account in the name of a family member who begins making large deposits.
- E. The customer frequently exchanges small bills for large bills.
Answer: B,D
Explanation:
Explanation
This information can be found in the Certified Anti-Money Laundering Specialist (CAMS) study guide, 6th edition, under the section on Unusual Customer Identification Scenarios. The guide explains that two indicators that should be included in awareness training for unusual customer identification scenarios are:
A: The customer opens the account in the name of a family member who begins making large deposits.
This is an indicator of potential structuring, where a customer may be attempting to avoid triggering reporting thresholds by depositing funds in smaller amounts over time. It is important for staff to be aware of this scenario and to monitor accounts for potential suspicious activity.
B: The customer's name and home address cannot be verified.
This is an indicator of potential identity theft or other fraudulent activity. If a customer's identifying information cannot be verified, it is important for staff to conduct additional due diligence to ensure that the customer is legitimate and that the account is not being used for illicit purposes.
NEW QUESTION # 20
Potential indicators of money laundering associated with Trust and Company Service Providers include:
(Select Two.)
- A. multi-jurisdictional wire transfers with no legal purpose.
- B. frequent deposits to or withdrawals from bank accounts.
- C. structuring cash deposits into third party accounts.
- D. generation of rental income to legitimize illicit funds.
- E. use of legal persons in jurisdictions with strict secrecy laws.
Answer: A,E
Explanation:
Explanation
This is stated in the Certified Anti-Money Laundering Specialist (the 6th edition) manual on page 595, which states: "Potential indicators of money laundering associated with Trust and Company Service Providers include the use of legal persons in jurisdictions with strict secrecy laws, structuring cash deposits into third party accounts, multi-jurisdictional wire transfers with no legal purpose, and frequent deposits to or withdrawals from bank accounts."
NEW QUESTION # 21
Which payment method for purchasing luxury items is a red flag for potential money laundering?
- A. Wire transfer
- B. Personal loan
- C. Credit card
- D. Cash
Answer: D
Explanation:
Explanation
According to the Financial Action Task Force (FATF), the use of large amounts of cash is a common method for money launderers to move illicit funds [1]. Purchasing luxury items with cash can indicate an attempt to convert illegal funds into tangible assets that can be easily resold or moved across borders. As a result, businesses that deal with luxury items are required to implement enhanced due diligence measures, including monitoring transactions involving large amounts of cash [1].
NEW QUESTION # 22
SAR/STR NARRATIVE
A SAR/STR has been submitted on five transactions conducted on the correspondent banking relationship with ABC Bank.
Client Information:
Remitter information: DEF Oil Resource Ltd. is the oldest member of the DEF Group. It was founded in 1977 as a general trading business with a primary focus on exports from Africa and North America. The group has business activities that span the entire energy value chain. Their core field of endeavor is centered within the oil and gas industry and its associated sub-sectors.
Beneficiary Information:
As per the response received from ABC Bank, it was determined that the beneficiaries are related to DEF Oil Resource Ltd. These were created by DEF Oil Resource Ltd. to purchase property in a foreign country on behalf of their senior management as part of a bonus scheme. The purpose behind this payment was for the purchase of property in another country.
Payment Reference:
ABCXXXXX31PZFG2H
ABCXXXXXX51PQGEH
ABCXXXXXX214QWVG
ABCXXXXXX41PSXA2
ABCXXXXXX815QWS3
Concerns:
* We are unsure about the country of incorporation of the beneficiaries.
* We are concerned about the transactional activity since the payment made towards entities (conducted on behalf of individuals) appears to be possible tax evasion.
* There appears to be an attempt to conceal the identity of individuals (senior management), which again raises concerns about the source of funds.
* Referring to the response received from ABC Bank, we are unclear about the ultimate beneficiary of funds.
* The remitter is involved in a high-risk business, (i.e., oil and crude products trading), and the beneficiary is involved in real estate business which again poses a higher risk.
When drafting the SAR/STR narrative, the investigator notes several payment references. What additional information should the investigator include in the narrative?
- A. The investigator's concerns based on their subjective opinion
- B. All relevant tables, spreadsheets, and other supporting documentation
- C. Personal tax records pertinent to the owners to indicate tax evasion
- D. The suspicious accounts and transactions identified
Answer: D
Explanation:
Explanation
The SAR/STR narrative should include the suspicious accounts and transactions identified, as well as the reasons why they are considered suspicious. The narrative should provide a clear and concise description of the activity, the parties involved, the dates, amounts, and frequencies of the transactions, and any other relevant information that would assist law enforcement in understanding the nature and purpose of the activity.
The narrative should not include the investigator's subjective opinion, personal tax records, or supporting documentation that is not essential to explain the suspicious activity. Supporting documentation can be attached separately to the SAR/STR form or provided upon request by law enforcement.
NEW QUESTION # 23
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 alter 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." Which fact should not be included in (he SAR/STR narrative?
- A. The air travel and hotel expenses
- B. The sporting event
- C. The request by law enforcement
- D. The time of the cash deposits
Answer: D
Explanation:
Explanation
The fact that should not be included in the SAR/STR narrative is the request by law enforcement (D). This is because the request by law enforcement is confidential and should not be disclosed to the customer or anyone else who is not authorized to know it. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, "the FI should not include any reference to the LE request in the SAR/STR narrative, as this could compromise the LE investigation or alert the customer of the suspicion" (p. 35). The FI should also not inform the customer of the LE request or delay filing the SAR/STR because of it.
The other facts should be included in the SAR/STR narrative, as they are relevant and indicative of human trafficking money laundering. The air travel and hotel expenses (A) show that the customer is involved in moving people across different locations, which could be a sign of human smuggling or trafficking. The time of the cash deposits (B) shows that the customer is receiving cash payments during unusual hours, which could be a sign of illicit activities or services. The sporting event shows that the customer is exploiting a high-demand situation for their business, which could be a sign of opportunistic or organized crime.
NEW QUESTION # 24
A SAR/STR regarding money-mule activity prompts law enforcement action. Under U.S. law, the alleged money mules can be prosecuted:
- A. in a country only if funds were transferred between accounts maintained in the same country.
- B. even if they were unaware that money was transferred.
- C. only if they were aware of their role and actively participated.
- D. unless they can prove they were not aware of the origin of the funds.
Answer: B
Explanation:
Explanation
According to U.S. law, money mules can be prosecuted even if they were unaware that money was transferred, as long as they acted with reckless disregard of the source of the funds or the purpose of the transaction1.
This is because money mules are considered to be aiding and abetting money laundering, which does not require proof of specific intent2.
References: 1: Money Mule Awareness Booklet, page 8 2: Money Laundering: An Overview of 18 U.S.C. ยง 1956 and Related Federal Criminal Law, page 7
NEW QUESTION # 25
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 "care*. 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, new suspicious patterns and trends related to check cashing are observed. The Fl decides to conduct a training to ensure that 1) the AML program is robust and 2) the training program is relevant and appropriate. Which parties should be trained on emerging trends and red flags? (Select Two.)
- A. Loan department
- B. The board of directors
- C. Branch personnel
- D. Financial crimes investigation unit
- E. Senior management
Answer: C,D
Explanation:
Explanation
The parties that should be trained on emerging trends and red flags are the financial crimes investigation unit (A) and the branch personnel . These parties are directly involved in detecting, investigating, and reporting suspicious activity related to check cashing or other types of fraud or money laundering. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, "the FI should provide regular and relevant training to its staff on the AML program, policies, procedures, and systems, as well as on the latest typologies, indicators, and best practices for financial crimes investigations" (p. 36). The FI should also "ensure that the training is tailored to the specific roles and responsibilities of the staff, and that it is updated and evaluated periodically" (p. 36).
The other parties are not as relevant or appropriate as options A and C. The loan department (B) is not directly related to check cashing or other types of fraud or money laundering, although it may have some exposure to credit or identity fraud. The senior management (D) is responsible for overseeing and supporting the AML program, but not for conducting or supervising financial crimes investigations. The board of directors (E) is responsible for approving and reviewing the AML program, but not for implementing or monitoring it.
References: 1: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, available at ACAMS
NEW QUESTION # 26
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 in 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 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 Based on the KYC profile and the transaction journal, the pattern of activity shows a deviation in:
- A. expected vs. actual activity.
- B. U.S. currency incoming vs. outgoing transaction rales.
- C. customer risk rating
- D. product risk rating.
Answer: A
Explanation:
Explanation
The correct answer is A because the expected account activities were 1 to 5 transactions per year and around 1 million per transaction amount, but the actual activity showed much more frequent and varied transactions in different currencies and amounts. This indicates a deviation from the customer's profile and risk level.
References: Advanced CAMS-FCI Study Guide, page 16
NEW QUESTION # 27
Which test should be included in a bank's Office of Foreign Assets Control sanctions screening audit program?
- A. Examining Human Resources processes for conducting criminal background checks on executives
- B. Looking at copies of suspicious activity reports filed with regulators to ensure completeness
- C. Reviewing wire transfer screening processes to ensure that potential name hits are investigated promptly
- D. Ensuring that all clients with foreign identification are subject to enhanced due diligence
Answer: D
Explanation:
Explanation
The OFAC sanctions screening audit program should include the requirement that all clients with foreign identification are subject to enhanced due diligence, as this provides an extra layer of protection against potential violations of OFAC sanctions.
NEW QUESTION # 28
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. Narcotics trafficking
- B. Antiques smuggling
- C. Terrorist financing
- D. Tax evasion
- E. Human smuggling/trafficking
Answer: C,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 # 29
Which are primary purposes of Financial Action Task Force {FATF)-Style Regional Bodies? (Select Two.)
- A. Acting as a prudential regulatory body for financial institutions
- B. Imposing special measures for non-cooperative jurisdictions
- C. Providing expertise and input in FATF policy-making
- D. Providing due diligence for foreign correspondent banks
- E. Promoting effective implementation of FATF recommendations
Answer: C,E
Explanation:
Explanation
The primary purposes of Financial Action Task Force (FATF)-Style Regional Bodies are to promote effective implementation of FATF recommendations and to provide expertise and input in FATF policy-making.
(CAMS Manual, 6th Edition, Page 180)
NEW QUESTION # 30
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. Deposits made within days of major sporting events
- B. Payments made for virtual currency
- 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 # 31
......
Pass Your Next CAMS-FCI Certification Exam Easily & Hassle Free: https://www.braindumpquiz.com/CAMS-FCI-exam-material.html
Free ACAMS CAMS-FCI Exam Question Practice Exams: https://drive.google.com/open?id=1-w6JNXd0E8PZVAP2_A6tVNZOufumUKzE