CAMS Exam 2023 Questions and Answers Complete
What is money laundering?
taking CRIMINAL proceeds and disguising their illegal sources to USE the funds for LEGAL or ILLEGAL acts.
Give an example of the SECOND stage of money laundering.
Layering - Electronically moving funds between countries; ...
CAMS Exam 2023 Questions and Answers Complete
What is money laundering?
taking CRIMINAL proceeds and disguising their illegal sources to USE the funds for
LEGAL or ILLEGAL acts.
Give an example of the SECOND stage of money laundering.
Layering - Electronically moving funds between countries; moving funds between
financial institutions; and converting cash placed into the system into monetary
instruments.
Give an example of the THIRD stage of money laundering.
Integration - Purchasing luxury assets; and investing in business enterprises.
Give an example of the FIRST stage of money laundering.
Placement - Co-mingling ILLEGITIMATE and LEGITIMATE funds; foreign exchange
transactions with illegal funds; and depositing small amounts of cash into multiple
accounts.
What does the (Sally Yates - Then-Deputy Attorney General of the Department of
Justice) Yates memo say?
It reminds prosecutors that criminal and civil corporate misconduct investigations should
also focus on the individuals who perpetrated the wrongdoing.
What are some indicators of money laundering using electronic funds transfers?
Funds transfers to or from a financial secrecy haven; large, incoming fund transfers
from a foreign client with little or no explanation or apparent reason; and fund transfers
that have no apparent link to legitimate business.
What is REMOTE DEPOSIT CAPTURE and what risk is associated with it?
A product offered by banks that allows customers to SCAN A CHECK AND TRANSMIT
an electronic image to the bank FOR DEPOSIT. Associated risks include ENABLING a
money launderer to deposit checks without visiting the bank thus avoiding detection.
What are some of the money laundering RISKS pertaining to the use of Payable
Through Accounts (PTAs)?
Where foreign institutions licensed in offshore centers, each bank having its own
supervision; where the respondent bank (the foreign bank) fails to conduct adequate
customer due diligence; and where the sub-account
holders have currency deposit and withdrawal privileges.
What is a money laundering RISK pertaining to the use of CONCENTRATION
ACCOUNTS?
The fact that CUSTOMER IDENTIFYING INFORMATION MAY NOT BE INCLUDED,
making the audit trail difficult or impossible to follow.
What is a PEP or Politically Exposed Person, and what is the PRIMARY RISK in
dealing with a PEP?
A person who has or has had a prominent government or quasi-public position in a
country. The PRIMARY RISK is that THEIR SOURCE OF FUNDS MAY BE FROM
CORRUPTION.
What is structuring?
Taking a large cash deposit and breaking it into smaller amounts deposited into
separate banks, accounts or on separate days to avoid currency transaction reports.
,When are CREDIT CARDS most likely used for money laundering and give an
example of money laundering using credit cards?
NOT likely INITIAL PLACEMENT. More LIKELY in LAYERING or INTEGRATION. For
EXAMPLE, OVERPAYING on the BALANCE and THEN ASKING FOR A REFUND.
Receiving a check from a reputable company makes the funds appear legitimate.
What are some of the risks posed by Third-Party Payment Processors (TPPPs)?
Multiple financial institution relationships whereby their suspicious ACTIVITY CANNOT
BE Entirely SEEN by one institution; engaging in ACH transactions from overseas
whereby the suspicious TRANSACTIONS GET HIDDEN by the large number of other
transactions they engage in; and the possibility of higher than average return rates
stemming from unauthorized transactions.
What are some ways MONEY SERVICES BUSINESSES can be used for money
laundering?
Cashing checks without obtaining adequate proof of identity; failing to file Currency
Transaction Reports when required; and transmitting funds overseas without sufficient
due diligence.
What are some of the money laundering risks associated with securities broker-
dealers?
Its international nature, speed of transactions, ease of converting holdings into cash
without significant loss of principal; large volume of wires; competitive, commission-
driven environment; practice of maintaining securities accounts in the name of
nominees or trusts; and weak AML programs.
What are some red flags associated with casinos and gambling?
Paying off associated debts in cash just under the reporting requirements; purchasing
chips, but engaging in minimal gambling and then cashing the chips back in; using the
gambling house for banking-like financial services, including wiring funds overseas;
betting on both "red" and "black" spaces in roulette; and purchasing chips with cash just
under the reporting requirements.
What were FATF's KEY findings its report on "Money Laundering/Terrorist
Financing Risks and Vulnerabilities Associated With Gold," issued in July, 2015?
It IS RELATIVELY COMPACT AND EASY TO TRANSPORT; it is LUCRATIVE AND
HOLDS ITS VALUE regardless of form.
List ways in which a TRAVEL AGENCY could be used to launder money.
Making expensive purchases and then ASKING FOR A REFUND; purchases made with
multiple wires just UNDER THE REPORTING THRESHOLD; and CREATING FALSE
BOOKINGS through tour operator networks to justify significant payments from foreign
travel groups.
Name various ways that a GATEKEEPER - an attorney, notary, accountant or
auditor could assist in a money laundering scheme.
CREATING and MANAGING corporate vehicles or other COMPLEX LEGAL
ARRANGEMENTS; buying or selling property as a COVER for transfers of illegal funds;
PERFORMING financial TRANSACTIONS, including making deposits, withdrawing
funds, engaging in foreign exchange operations, buying or selling stock and sending
international wires; and SETTING UP or MANAGING a charity.
What is the primary concern with regard to the use of GATEKEEPERS?
, Attorneys, notaries, accountants and auditors CAN BE USED TO ENHANCE
SECRECY and keep the beneficial account owner or transaction hidden.
List reasons why REAL ESTATE can be an attractive method of money
laundering, according to the 2015 report by the Australian Transaction Reports
and Analysis Centre (AUSTRAC).
It can be purchased with CASH; the owner can be DISGUISED; it is a relatively
STABLE AND RELIABLE investment; and VALUE CAN BE INCREASED through
renovations and improvements.
What are TWO of the most COMMON money laundering techniques involved
with Trade-Based Money Laundering (TBML)?
Over and under invoicing
In summary form, how does the Black Market Peso Exchange (BMPE) work in
laundering money?
A trafficker SELLS DRUGS FOR DOLLARS in the US and - to avoid smuggling dollars
back to Mexico - the trafficker GIVES THE PROCEEDS TO A "PESO BROKER." The
broker finds businesses in Mexico that want to buy goods in the US. Then the broker
buys the US goods with US dollars and has them shipped to Mexico. The Mexcican
business pays the broker in Mexico in pesos and the broker gives the pesos - minus a
fee - to the traffickers.
What are some of the money laundering risks of pre-paid BANK CARDS?
ANONYMOUS holders and funding; HIGH value limits; GLOBAL access to cash
through ATMs; LAXED offshore jurisdictions issuing the cards; and they are a
SUBSTITUTE for bulk-cash smuggling.
What are some of the risks listed by FATF in its 2010 report titled "Guidance For
A Risk-Based Approach to Prepaid Cards, Mobile Payments And Internet-Based
Payment Services"?
ANONYMITY; GEOGRAPHIC reach; ALTERNATIVE to physical cross-transportation;
EASY access to CASH; several entities are required to issue prepaid cards - the
program manager, issuer, acquirer, payment network, distributor and agents - which
may be hard to supervise or monitor.
What is one of the PRIMARY concerns with regard to the use of VIRTUAL
CURRENCIES?
Beneficial OWNERSHIP INFORMATION may be difficult to obtain (ANONYMITY).
What are some EMERGING risks for Terrorist Financing?
SELF-FUNDING through SOCIAL MEDIA; NEW PAYMENT PRODUCTS and services;
and EXPLOITATION OF NATURAL RESOURCES
What is the concept of willful blindness?
The "DELIBERATE AVOIDANCE OF KNOWLEDGE OF THE FACTS" OR
"PURPOSEFUL INDIFFERENCE," and is the equivalent of actual knowledge.
What are the MAIN reasons correspondent banking is vulnerable to money
laundering?
Indirect relationships; one financial institution carries out transactions for customers of
another institution, making it difficult to identify the parties involved; LARGE VOLUMES
of transactions for customers of customers making it difficult to identify suspicious or
unusual transactions.
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