ACAMS CAMS Online Practice Questions and Exam Preparation

ACAMS CAMS Online Questions & Answers

• Question 341:

  Money laundering red flags associated with money service businesses include: (Select Two.)

  A. cash payments on insurance policies by a third party.
  B. the same customer conducts transactions in multiple locations in a short time period.
  C. repeated receipt of funds transfers from virtual currency exchanges.
  D. an employee lives a lavish lifestyle supported by his or her salary.
  E. two or more customers use the same identification for separate and unrelated transactions.
  B. the same customer conducts transactions in multiple locations in a short time period.
  E. two or more customers use the same identification for separate and unrelated transactions.

  ---

  These two options are indicative of money laundering red flags associated with money service businesses, as they may suggest attempts to avoid reporting requirements, conceal the source or destination of funds, or use false or stolen identities. Money service businesses are vulnerable to money laundering due to the high volume and anonymity of transactions, the ease of cross-border transfers, and the lack of effective regulation and supervision in some jurisdictions12. Therefore, they should implement robust anti-money laundering policies and procedures, and monitor and report any suspicious activity.

• Question 342:

  The owner of a real estate investment company deposits multiple cashier's checks that were bought using cash over a three-month period, from the sale of two apartments. This account also receives several electronic transfers from other financial institutions for 10.000 USD each. What activity is considered suspicious of money laundering?

  A. Using cash to buy multiple cashier's checks over a period of time
  B. Using cashier's checks in the transactions with the real estate investment company's account
  C. Performing operations with real estate investment companies
  D. Receiving electronic transfers for 10.000 USD amounts from other financial institutions
  A. Using cash to buy multiple cashier's checks over a period of time

  ---

  Using cash to buy multiple cashier's checks over a period of time is considered suspicious activity of money laundering. This method is commonly known as structuring, where individuals or entities use cash to buy multiple monetary instruments such as cashier's checks in small amounts, to avoid reporting requirements. This behavior could be an attempt to evade transaction monitoring and reporting requirements by a financial institution. Additionally, the fact that the account also receives multiple electronic transfers for the same amount could be a red flag for money laundering as it is a common technique used to layer or disguise the origin of illicit funds. Certified Anti-Money Laundering Specialist (the 6th edition) Study Guide, page 100-101.

• Question 343:

  A money transmitter's nation-wide agent network remits funds to a country in Africa on behalf of an immigrant community based in the United States. A terrorist group is known to operate openly in this African country. In reviewing transaction

  records, the compliance officer detects a pattern where two customers together visit the same agent each week and remit the same amount of funds, $2,500, to the same recipient in the country in Africa.

  What should alert the compliance officer to possible money laundering or terrorist financing activity by the two customers?

  A. The customers always visit together.
  B. The customers always visit the same agent.
  C. The funds are being sent to the same recipient each week.
  D. The dollar amount of each transaction is just below the record keeping threshold.
  D. The dollar amount of each transaction is just below the record keeping threshold.

  ---

  According to the ACAMS CAMS Study Guide, one of the common methods of money laundering and terrorist financing is to structure transactions to avoid reporting or record keeping requirements. Structuring involves breaking down a large amount of cash into smaller transactions that fall below a specified threshold, or using different accounts, agents, locations, or days to conduct the transactions. Therefore, the fact that the two customers remit the same amount of funds, $2,500, each week to the same recipient in a high-risk country is a red flag for possible money laundering or terrorist financing activity, as it suggests that they are trying to evade the record keeping threshold of $3,000 for money transmitters in the United States12. References: ACAMS CAMS Study Guide, 6th Edition, page 27 FFIEC BSA/AML Appendices - Appendix F ?Money Laundering and Terrorist Financing Red Flags1 AML Red Flags ?What are the Top 10 Indicators? - ComplyAdvantage2

• Question 344:

  Which two individuals are ordinarily beneficial owners of a private banking account according to the Wolfsberg Anti-Money Laundering Principles for Private Banking? (Choose two.)

  A. Those two are authorized signers on the account
  B. Those who have legal title to a controlling share interest in the customer
  C. Those who generally have ultimate control through ownership or other means over the funds in the account
  D. Those who are the ultimate source of funds for the account and whose source of wealth should be subject to due diligence
  C. Those who generally have ultimate control through ownership or other means over the funds in the account
  D. Those who are the ultimate source of funds for the account and whose source of wealth should be subject to due diligence

  ---

  According to the Wolfsberg Anti-Money Laundering Principles for Private Banking, the beneficial owners of a private banking account are those who generally have ultimate control over the funds in the account and those who are the ultimate source of funds for the account and whose source of wealth should be subject to due diligence1. These two criteria are meant to ensure that the bank knows who is ultimately behind the account and where the funds come from, in order to prevent the use of the bank for money laundering or other criminal purposes. Authorized signers on the account or those who have legal title to a controlling share interest in the customer are not necessarily the beneficial owners, as they may act on behalf of others or have limited influence over the account. References: 1: Wolfsberg Anti-Money Laundering Principles for Private Banking (2012), Section 1.3.1 and 1.3.2, 1 Reference: https://www.wolfsberg-principles.com/sites/default/files/wb/pdfs/wolfsberg-standards/10.% 20Wolfsberg-Private-Banking-Prinicples-May-2012.pdf (2)

• Question 345:

  Why do government entities around the world believe that a risk-based approach to AML/CFT compliance is a preferable prescriptive measure?

  A. It is easier for examiners to make subjective criticisms
  B. It is more flexible, effective and proportionate
  C. It allows institutions to focus their attention on only high risk customers
  D. It allows the creation of hard and fast rules that must be followed
  B. It is more flexible, effective and proportionate

• Question 346:

  Which is the main objective when a financial institution (FI) conducts an investigation?

  A. Keep policies and procedures updated
  B. Keep all the documentation
  C. Know the customer
  D. Track the movement of the money
  D. Track the movement of the money

  ---

  The main objective when a financial institution (FI) conducts an investigation is to track the movement of the money. Money laundering is a process of disguising the proceeds of criminal activity to make them appear legitimate. The movement of money is an essential element in the process of money laundering. Therefore, tracking the movement of funds is a crucial step in identifying and preventing money laundering. A financial institution must be able to recognize suspicious transactions and report them to the relevant authorities. An investigation is conducted to gather evidence and establish a clear understanding of the transaction flow, the parties involved, and the nature of the activity. This information is used to determine if the transaction is suspicious and if it violates any laws or regulations. While keeping policies and procedures updated, keeping documentation, and knowing the customer are essential components of a comprehensive anti-money laundering (AML) program, these activities are not the primary objective of an investigation. Policies and procedures need to be updated to reflect changes in regulatory requirements and emerging money laundering risks. Documentation must be retained to provide evidence of the investigation process and outcomes. Knowing the customer is essential to identify and verify the customer's identity and assess the risk associated with the relationship.

• Question 347:

  What are some of the methods for sharing information and cooperating on an international basis? Choose 3 answers

  A. Mutual Assistance Legal Treaties
  B. International Money Laundering Information Network
  C. Regulatory sharing through Supervisory Channels
  D. Issuant subpoenas
  A. Mutual Assistance Legal Treaties
  B. International Money Laundering Information Network
  C. Regulatory sharing through Supervisory Channels

• Question 348:

  A company service provider in Country A sets up a corporate structure for a client from Country B, which is known for corruption. The corporate structure includes a holding company in Country A with a bank account in one of the international

  banks located there.

  During on-boarding, the client's wealth was estimated at $7 million. Shortly thereafter, the client's father became president of Country B. During a routine client review two years later, it was identified that client's wealth had grown to $510

  million.

  What are two red flags that indicate money laundering or financial terrorism? (Choose two.)

  A. The client is from a country known for corruption.
  B. The substantial growth in wealth during a short period of time.
  C. The client is a family member of a PEP from a country known for corruption.
  D. The holding company is in Country A with a bank account in one of the international banks.
  A. The client is from a country known for corruption.
  C. The client is a family member of a PEP from a country known for corruption.

  ---

  High-risk: The risks here are significant, but are not necessarily prohibited. To mitigate the heightened risk presented, the financial institution should apply more stringent controls to reduce the ML/FT risk, such as conducting enhanced due diligence and more rigorous transaction monitoring. Countries that maintain a reputation for corruption or drug trafficking are generally considered high-risk. High-risk customers may include politically exposed persons (PEPs) or certain types of money services businesses or cash-intensive businesses; high-risk products and services may include correspondent banking and private banking.

• Question 349:

  Which is a goal of Financial Action Task Force Regional-Style Bodies?

  A. Executing sound AML processes in response to recommendations
  B. Enforcing local AML laws and regulations
  C. Analyzing new or developing methods in which criminals or terrorists abuse the financial system in their region
  D. Setting standards to assess whether members have an adequate AML regime
  C. Analyzing new or developing methods in which criminals or terrorists abuse the financial system in their region

• Question 350:

  Which scenario best justifies why a customer's account might be closed by a financial institution?

  A. The account has transactions that triggered multiple suspicious activity reports.
  B. The customer uses a shipping company dealing with specially designated nationals.
  C. The customer is the object of a civil subpoena.
  D. The account shows periodic fixed amount remittances for tuition fees.
  A. The account has transactions that triggered multiple suspicious activity reports.

  ---

  Financial institutions closely monitor customer accounts for suspicious activity related to money laundering, terrorist financing, or other illicit activities. If an account consistently triggers multiple suspicious activity reports (SARs), it raises red flags. These reports indicate unusual or potentially illegal transactions, such as large cash deposits, frequent transfers to high-risk jurisdictions, or patterns inconsistent with the customer's profile. To mitigate risk and comply with anti-money laundering (AML) regulations, the financial institution may decide to close the account. Regular SAR filings are essential for maintaining the integrity of the financial system and preventing illicit financial flows.