ACAMS ACAMS Certifications CAMS-FCI Questions & Answers

• Question 1:

  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. Take notes on the questions and comments made by the agents.

  B. Sign consent forms permitting the agents to search employees' offices.

  C. Provide agents with unlimited access to customers' personal data.

  D. Volunteer information not requested by the agents that the employees think may be useful.

  Correct Answer: A

  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

• Question 2:

  Which information is it best practice to share at the very beginning of a well-written SAR/STR narrative?

  A. A specific description of the involved accounts and transactions, including the origination and application of funds

  B. The purpose of the SAR/STR narrative and a general description of the known or alleged violation

  C. Information about any follow-up actions conducted by the financial institution on the account

  D. Any and all relevant facts about the parties who facilitated the suspicious activity or transactions

  Correct Answer: B

  The best information to share at the very beginning of a well-written SAR/STR narrative is the purpose of the SAR/STR narrative and a general description of the known or alleged violation. This is because this information provides an

  overview of why the SAR/STR is being filed and what type of suspicious activity or transaction is involved. It also helps to capture the attention of the reader and set the tone for the rest of the narrative.

  References: Reporting Suspicious Activity Certificate, Module 4, page 7.

• Question 3:

  CLIENT INFORMATION FORM Client Name: ABC Tech Corp Client ID. Number: 08125 Name: ABC Tech Corp Registered Address: Mumbai, India Work Address: Mumbai, India Cell Phone: "*?quot;"; Alt Phone:";"";* Email: .......";

  Client Profile Information:

  Sector: Financial

  Engaged in business from (date): 02 Jan 2020 Sub-sector: Software-Cryptocurrency Exchange Expected Annual Transaction Amount: 125,000 USD Payment Nature: Transfer received from clients' fund

  Received from: Clients

  Received for: Sale of digital assets

  The client identified itself as Xryptocurrency Exchange." The client has submitted the limited liability partnership deed. However, the bank's auditing team is unable to identify the client's exact business profile as the cryptocurrency exchange specified by the client as their major business awaits clearance from the country's regulator. The client has submitted documents/communications exchanged with the regulator and has cited the lack of governing laws in the country of their operation as the reason for the delay.

  During the financial crime investigation, the investigator discovers that some of the customer due diligence (CDD) documents submitted by the client were fraudulent. The investigator also finds that some of the information in the financial institution's information depository is false. What should the financial crime investigator do next?

  A. Report collusion between the cryptocurrency exchange and internal staff in the internal hotline or whistle-blowing channel.

  B. Request that the relationship manager conduct a CDD refresh as it is a material trigger.

  C. Escalate to the compliance officer/money laundering reporting officer to file a SAR/STR.

  D. Contact the client directly and obtain the relevant notarized documents and information.

  Correct Answer: C

  The correct answer is C. Escalate to the compliance officer/money laundering reporting officer to file a SAR/STR. This is because the financial crime investigator has found evidence of fraudulent documents and false information, which indicate a high risk of money laundering or other financial crimes. The investigator should not contact the client directly, as this may tip them off or compromise the investigation. The investigator should also not report collusion between the cryptocurrency exchange and internal staff, as this is an assumption that has not been verified. The investigator should not request a CDD refresh, as this is not sufficient to address the serious issues identified. References: Advanced CAMS-FCI Study Guide, page 291 Advanced CAMS-FCI Study Guide, page 311 Advanced CAMS-FCI Study Guide, page 331

  1: https://www.acams.org/en/certifications/advanced-cams/advanced-financial-crimes- investigations

• Question 4:

  Potential indicators of money laundering associated with Trust and Company Service Providers include: (Select Two.)

  A. use of legal persons in jurisdictions with strict secrecy laws.

  B. structuring cash deposits into third party accounts.

  C. multi-jurisdictional wire transfers with no legal purpose.

  D. generation of rental income to legitimize illicit funds.

  E. frequent deposits to or withdrawals from bank accounts.

  Correct Answer: AC

  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."

• Question 5:

  Sanctions screening requirements include that a financial institution should:

  A. report an individual whose name appears on a sanctions list to the police.

  B. immediately freeze the bank account of an individual that appears on a sanctions list.

  C. compare customer and transaction records against periodically updated sanctions lists provided by governmental bodies.

  D. immediately close the bank account of an entity who appears on a sanctions list.

  Correct Answer: C

  Compare customer and transaction records against periodically updated sanctions lists provided by governmental bodies. This is stated in the Certified Anti-Money Laundering Specialist (the 6th edition) manual on page 595, which states: "Sanctions screening requirements include that a financial institution should compare customer and transaction records against periodically updated sanctions lists provided by governmental bodies."

• Question 6:

  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

  Correct Answer: B

  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 7:

  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

  Correct Answer: C

  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 8:

  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

  Correct Answer: BD

  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 9:

  The investigations team of a financial institution (Fl) wants to perform enhanced due diligence measures on operations done by a foreign bank related to transactions of companies that export scrap gold and silver. What would be the next best steps for the investigations team? (Select Two.)

  A. Ask the legal department if it can proceed to rescind the contract of the correspondent banking relationship since the export of scrap gold and silver is a high-risk activity.

  B. Ask the respondent bank if it has a risk rating for the exporting companies, if the customer profiles are updated, and if so. when was the last time it was done.

  C. Ask the respondent bank if the exporting companies have obtained an official license that permits the exporting of scrap gold and silver.

  D. Ask the respondent bank if it can file a SAR/STR in its jurisdiction since the investigations team also plans to do the same in the Fl's home country.

  E. Ask the business manager who handles the relationship of the respondent bank if they can persuade the bank to close the accounts of the export companies.

  Correct Answer: BC

  The correct answers are B and C because these are the most relevant and reasonable steps for the investigations team to perform enhanced due diligence on the operations of the foreign bank and its customers. Asking for the risk rating, customer profiles, and official licenses would help the team assess the level of risk and compliance of the foreign bank and its customers, who are engaged in a high-risk activity of exporting scrap gold and silver. The other options are not appropriate because they are either premature or ineffective. Rescinding the contract, filing a SAR/STR, or closing the accounts would require more evidence and justification, and they may also damage the relationship with the foreign bank. References: : Precious Metals and Stones

• Question 10:

  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 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 dates" and "companionship."

  If the investigator uncovers evidence that foreign nationals are involved in this activity, they should also note the possible presence of:

  A. tax fraud.

  B. black market peso exchange.

  C. trade-based laundering.

  D. human smuggling.

  Correct Answer: D

  If the investigator uncovers evidence that foreign nationals are involved in this activity, they should also note the possible presence of human smuggling (D). This is because human smuggling is the illegal movement of people across borders, often facilitated by criminal networks that exploit vulnerable migrants. According to the FATF and Egmont Group report on Financial Flows from Human Trafficking2, "human smuggling can be closely linked to human trafficking, as smuggled migrants may become victims of trafficking along their journey or at their destination" (p. 9). The report also states that some indicators of human smuggling are similar to those of human trafficking, such as:

  Frequent cash deposits or withdrawals in different locations Use of false or fraudulent identification documents Expenses related to travel and accommodation Involvement in online platforms that advertise sexual services The other options are not as relevant or specific as option D. Tax fraud (A) is the evasion of taxes by individuals or businesses, which may or may not be related to human trafficking or smuggling. Black market peso exchange (B) is a money laundering scheme that involves exchanging illicit proceeds in one currency for another currency at a discounted rate, which is more commonly associated with drug trafficking or trade-based laundering. Trade-based laundering ?is the manipulation of trade transactions to disguise the origin and ownership of illicit funds, which is also more likely to be linked to drug trafficking or other types of fraud.

  References: 1: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, available at ACAMS 2: FATF and Egmont Group, Financial Flows from Human Trafficking, July 2018, available at FATF