ACAMS CAMS-FCI Online Practice Questions and Exam Preparation

ACAMS CAMS-FCI Online Questions & Answers

• Question 51:

  An investigator is reviewing an alert for unusual activity. System scanning detected a text string within a company customer's account transactions that indicates the account may have been used for a drug or drug paraphernalia purchase. Based on the KYC profile, the investigator determines the customer's company name and business type are marketed as a gardening supplies company. The investigator reviews the account activity and notes an online purchase transaction that leads the investigator to a website that sells various strains of marijuana. Additional account review detects cash deposits into the account at the branch teller lines, so the investigator reaches out to the teller staff regarding the transactions. The teller staff member reports that the business customers have frequently deposited cash in lower amounts. The teller, without prompting, adds that one of the transactors would occasionally smell of a distinct scent of marijuana smoke.

  Which information should be included in the SAR/STR?

  A. The customer information, including KYC background
  B. A transaction that is commensurate with the customer's background
  C. The fact that one of the transactors occasionally smelled of marijuana smoke
  D. Details of the transactor's social media accounts
  C. The fact that one of the transactors occasionally smelled of marijuana smoke

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  Explanation/Reference:

  The SAR/STR should include any information that is relevant to the suspicious activity, such as the customer information, the transaction details, and any other indicators of potential money laundering or criminal activity. The fact that one of the transactors occasionally smelled of marijuana smoke is an indicator that the customer may be involved in the illicit drug trade, which is a predicate offense for money laundering. Therefore, this information should be included in the SAR/ STR. References: Advanced CAMS-FCI Study Guide, page 25.

• Question 52:

  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. Insider trading is a predicate offense in the U.S. and Switzerland.
  C. The events raise concerns that the payment represents proceeds from insider trading.
  D. 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.

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  Explanation/Reference:

  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

• Question 53:

  Due to an ever-diversifying business model and multi-jurisdictional footprint, a casino has decided to outsource the source of funds and wealth checks to a third-party provider. Why is it important for the casino to maintain control of the output from the provider?

  A. Clients of the casino prefer to know that the casino is keeping their information secure when being held by a third-party.
  B. As with all third-party relationships, proper control must be maintained to ensure profitability.
  C. The casino maintains ultimate responsibility for this activity and should maintain control to avoid non-compliance.
  D. Other casinos are frequently looking to reduce costs and share ideas, so if this relationship is successful, the model can be used by other businesses.
  C. The casino maintains ultimate responsibility for this activity and should maintain control to avoid non-compliance.

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  Explanation/Reference:

  The reason why it is important for the casino to maintain control of the output from the provider is that the casino maintains ultimate responsibility for this activity and should maintain control to avoid non-compliance ? This is because the casino is accountable for its own AML/CFT obligations and cannot delegate or outsource them to a third-party provider. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, "the FI should ensure that it has adequate oversight and control over any third-party providers that it engages for AML/CFT purposes, such as conducting due diligence, verifying information, or monitoring transactions" (p. 25). The FI should also "review and evaluate the performance and quality of the third-party providers on a regular basis, and address any issues or gaps that may arise" (p. 25).

  The other options are not as relevant or accurate as option C. The clients of the casino prefer to know that the casino is keeping their information secure when being held by a third-party (A) is not a reason why the casino should maintain control of the output from the provider, but rather a customer expectation or preference. As with all third-party relationships, proper control must be maintained to ensure profitability (B) is not a reason why the casino should maintain control of the output from the provider, but rather a general business principle or objective. Other casinos are frequently looking to reduce costs and share ideas, so if this relationship is successful, the model can be used by other businesses (D) is not a reason why the casino should maintain control of the output from the provider, but rather a potential benefit or outcome.

• Question 54:

  Which are some of the negative impacts from illegal wildlife trade and environmental crimes? (Select Two.)

  A. Barriers to banking by low income population
  B. Loss of potential tax proceeds
  C. Public health consequences
  D. Threats to biodiversity
  E. Threats to a country's political stability
  B. Loss of potential tax proceeds
  D. Threats to biodiversity

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  Explanation/Reference:

  Some of the negative impacts of illegal wildlife trade and environmental crimes are loss of potential tax proceeds and threats to biodiversity. Loss of potential tax proceeds occurs when illegal wildlife trade and environmental crimes evade taxation and customs duties, depriving governments of revenues that could be used for public services and development. Threats to biodiversity occur when illegal wildlife trade and environmental crimes endanger species, habitats, and ecosystems, reducing their resilience and ability to provide essential services for human well-being. Public health consequences and threats to a country's political stability are not directly related to illegal wildlife trade and environmental crimes, but rather to other types of financial crimes such as money laundering, terrorism financing, or corruption. References: [Advanced CAMS-FCI Study Guide], page 68-69; [FATF Report on Money Laundering from Environmental Crime], page 9-10.

• Question 55:

  An investigator at a corporate bank is conducting transaction monitoring alerts clearance.

  1.

  YC 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.

  2.

  X is the UBO. and owns 97% shares of this entity customer;

  3.

  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 and 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. Previously filed SARVSTR unrelated to the customer, but similar in content
  B. Formation document/description of the group-related companies
  C. Source of the incoming funds to the group-related companies
  D. Adverse news screening on all names listed in the formation documents
  C. Source of the incoming funds to the group-related companies

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  Explanation/Reference:

  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

• Question 56:

  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 穋are'. 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.

  Which red flags would be an indicator that activity is connected to a corruption/bribery typology? (Select Two.)

  A. Large checks issued to various individuals with the memos noting "gift", "thank you", "favor"
  B. Negative news found on the customer related to government-issued violations for safety
  C. Checks issued to an unrelated entity referencing "rent" and "utilities" in the memos
  D. Multiple daycare locations with no active business operations or related account activity
  E. The same beneficial owner owning several daycare centers in different locations
  A. Large checks issued to various individuals with the memos noting "gift", "thank you", "favor"
  B. Negative news found on the customer related to government-issued violations for safety

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  Explanation/Reference:

  The red flags that would be an indicator that activity is connected to a corruption/bribery typology are large checks issued to various individuals with the memos noting "gift", "thank you", "favor" (A) and negative news found on the customer related to government-issued violations for safety (B). These red flags suggest that the customer is involved in paying or receiving bribes or kickbacks to or from government officials or other parties in exchange for favorable treatment or contracts. These red flags are consistent with some of the indicators of corruption/bribery identified by ACAMS1, such as:

  Payments made to or from third parties that are not directly related to the business Payments made to or from high-risk jurisdictions or sectors Payments made with vague or incomplete descriptions or justifications Negative news or reputation of the customer or its associates The other options are not as relevant or indicative of corruption/bribery as options A and B. Checks issued to an unrelated entity referencing "rent" and "utilities" in the memos ?could be a legitimate business expense or a sign of other types of fraud or money laundering, such as tax evasion or shell company schemes. Multiple daycare locations with no active business operations or related account activity (D) could also be a sign of other types of fraud or money laundering, such as embezzlement or front company schemes. The same beneficial owner owning several daycare centers in different locations (E) could be a normal or legitimate business practice, depending on the size, location, and profitability of the centers.

• Question 57:

  A financial institution might use which option as intelligence to file a SAR/STR?

  A. A customer makes several deposits in one month that appear to exceed their expected monthly income.
  B. A customer receives a large, one-time wire from a law firm.
  C. The Fl is unable to obtain evidence of required licensing or registration despite suspicion of money transmitting.
  D. The Fl discovers a large number of securities transactions that appear to be related to day trading.
  C. The Fl is unable to obtain evidence of required licensing or registration despite suspicion of money transmitting.

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  Explanation/Reference:

  The correct answer is C because the FI is unable to obtain evidence of required licensing or registration despite suspicion of money transmitting, which is a red flag for money laundering and a violation of federal and state laws. Option A is incorrect because making several deposits in one month that appear to exceed their expected monthly income might not be indicative of suspicious activity, depending on the customer's profile and source of funds. Option B is incorrect because receiving a large, one-time wire from a law firm might not be indicative of suspicious activity, depending on the customer's relationship with the law firm and the purpose of the wire. Option D is incorrect because discovering a large number of securities transactions that appear to be related to day trading might not be indicative of suspicious activity, depending on the customer's investment strategy and risk tolerance. References: Money transmitter - Wikipedia; The Quick Guide To Money Transmitter Licenses - Surety Bond Insider; Financial Crime Typologies - Intermediate Certificate, Module 3.

• Question 58:

  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 of 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 for a fee before returning it to investors.

  The investigator discovers that the bank has no records pertaining to ownership of the LLC. What would this mean for the bank and/or investigator?

  A. The bank may not be able to file a SAR/STR without the ownership data.
  B. The bank is out of compliance with beneficial ownership regulations.
  C. The bank is out of compliance with CIP regulations.
  D. The bank cannot respond to law enforcement requests without the ownership data.
  C. The bank is out of compliance with CIP regulations.

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  Explanation/Reference:

  The bank is out of compliance with CIP regulations because it did not obtain the minimum identifying information from the customer prior to opening the account, as required by 31 CFR ?1020.220(a)(2)(i)(A). The bank should have obtained the name, date of birth, address, and identification number of the customer, as well as verified the identity of the customer to the extent reasonable and practicable. The lack of ownership data may also indicate a violation of beneficial ownership regulations, but that is not the primary issue in this case.

• Question 59:

  Which pattern of activity most strongly indicates an individual is a foreign terrorist fighter?

  A. A large purchase at a gas station immediately followed by several smaller purchases at an electronics store
  B. A large cash advance on a credit card and purchases at travel and sporting goods websites
  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
  B. A large cash advance on a credit card and purchases at travel and sporting goods websites

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  Explanation/Reference:

  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

• Question 60:

  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.

  The analyst determines that site visits should be conducted for the three daycare businesses. Which observations at the on-site visits would justify writing a SAR/STR? (Select Three.)

  A. Signs of severe wear and poor maintenance at the site
  B. A site located in a commercial building
  C. Lights turned off at the site during operational hours
  D. Visible attendance with children being dropped off by parents
  E. Visible signage indicating the purpose of the building
  F. A full parking lot of cars with no staff at the site
  A. Signs of severe wear and poor maintenance at the site
  C. Lights turned off at the site during operational hours
  F. A full parking lot of cars with no staff at the site

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  Explanation/Reference:

  The observations at the on-site visits that would justify writing a SAR/STR are signs of severe wear and poor maintenance at the site (A), lights turned off at the site during operational hours ? and a full parking lot of cars with no staff at the site (F). These observations suggest that the daycare businesses are not operating legitimately or providing adequate services to their customers, and that they may be misusing governmental grants or laundering money through their accounts. These observations are consistent with some of the red flags for fraud identified by ACAMS2, such as:

  Inadequate facilities or equipment for the type of business Lack of visible activity or customers at the business location Discrepancy between reported income and expenses Unusual volume or frequency of transactions The other observations are not as relevant or indicative of fraud as options A, C, and F. A site located in a commercial building (B) could be a normal or legitimate choice for a daycare business, depending on its size, location, and availability. Visible attendance with children being dropped off by parents (D) could show that the daycare business is providing genuine services to its customers, although it does not rule out possible fraud or money laundering. Visible signage indicating the purpose of building (E) could also show that the daycare business is transparent and legitimate, although it does not guarantee its quality or compliance.

  References: 1: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, available at ACAMS 2: ACAMS Fraud Prevention eLearning Course Module 3: Fraud Detection Techniques