ACAMS ACAMS Certifications CAMS-FCI Questions & Answers

• Question 41:

  A client with many personal and business deposits with the financial institution (Fl) seeks a business loan. The client wants to guarantee the loan with a trust for which they are the beneficiary.

  An investigator examines the trust. The trust has many layers, including shell companies in known tax havens. The client's ultimate beneficial ownership claim cannot be validated, and the loan is denied.

  Two months later, the Fl receives a law enforcement (LE) request on one of the client's business accounts. While reviewing the business account, the Fl receives another LE request on the same account from another agency. The requested

  information is shared.

  Three months later, a branch manager receives a request to open a business deposit account related to a complex trust. The manager forwarded the request because of the complexity. The trust was the same as the previously examined

  trust, but the request came from a different client. The second client also has many accounts with the Fl. Further inspection finds links between the second client and the Paradise Papers. The Papers state the client led illegal activities and

  committed tax evasion.

  What steps should the investigator perform in reference to the first client's existing accounts? (Select Three.)

  A. Review all client-signed documents relating to all accounts.

  B. File SARs/STRs for all accounts at the beginning of the discovery phase and amend later as necessary.

  C. Inform Fl management of all processes used to investigate the client due to LE inquiry.

  D. Perform secondary scans of the client's other owners/authorized signers

  E. Review Fl approved policies regarding the existing accounts to ensure regulatory requirements were followed.

  F. Prepare a relationship flow chart of all existing accounts to better understand the client's activities.

  Correct Answer: ADF

  The investigator should review all client-signed documents relating to all accounts (A) to check for any discrepancies or red flags. The investigator should also perform secondary scans of the client's other owners/authorized signers (D) to identify any possible connections or associations with the second client or the Paradise Papers. Additionally, the investigator should prepare a relationship flow chart of all existing accounts (F) to better understand the client's activities and patterns. These steps are consistent with the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, which states that investigators should "review all relevant documentation, including account opening documents, transaction records, and customer correspondence" (p. 23), "conduct enhanced due diligence on all parties involved in the investigation" (p. 24), and "use data visualization tools to map out complex relationships and transactions" (p. 25). References: 1: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, available at ACAMS

• Question 42:

  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:

  1.

  We are unsure about the country of incorporation of the beneficiaries.

  2.

  We are concerned about the transactional activity since the payment made towards entities (conducted on behalf of individuals) appears to be possible tax evasion.

  3.

  There appears to be an attempt to conceal the identity of individuals (senior management), which again raises concerns about the source of funds.

  4.

  Referring to the response received from ABC Bank, we are unclear about the ultimate beneficiary of funds.

  5.

  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. The suspicious accounts and transactions identified

  C. All relevant tables, spreadsheets, and other supporting documentation

  D. Personal tax records pertinent to the owners to indicate tax evasion

  Correct Answer: B

  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.

• Question 43:

  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 'care1. 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, it was determined that some of the checks were issued to a mother-in-law of a PEP and deposited into her account with the Fl. This customer was not found on the Fl's PEP list How should the investigator proceed in

  this situation"? (Select Two.)

  A. Conduct the investigation as usual, since the activity in question is not directly connected to the PEP.

  B. Reter the newly identified customers account for closure due to the high risk associated with the potential PEP.

  C. Use this case as an example to train employees to recognize potential PEPs during their investigation process.

  D. Send a referral to Sanctions/List Screening, or similar department/responsible individual, to ensure that the customer due diligence information is up to date.

  E. File a SAR/STR due to the potential involvement of a PEP.

  Correct Answer: AD

  The investigator should proceed in this situation by conducting the investigation as usual, since the activity in question is not directly connected to the PEP (A) and sending a referral to Sanctions/List Screening, or similar department/

  responsible individual, to ensure that the customer due diligence information is up to date (D). These actions are appropriate and prudent, as they allow the investigator to continue their analysis of the suspicious activity without being biased

  by the potential PEP status of the customer's relative, and they ensure that the FI has accurate and current information about its customers and their associates. According to the ACAMS Advanced Financial Crimes Investigations Certification

  Study Guide1, "the FI should conduct enhanced due diligence on all parties involved in the investigation, including checking various sources of information, such as watch lists, sanctions lists, negative news, and official registries" (p.

  24). The FI should also "update the customer profile with any new information obtained during the investigation" (p. 25).

  The other options are not correct. The investigator should not refer the newly identified customer's account for closure due to the high risk associated with the potential PEP (B), as this could be premature or disproportionate, as well as

  potentially discriminatory or illegal. The investigator should not file a SAR/STR due to the potential involvement of a PEP (E), as this could also be premature or unnecessary, as well as potentially misleading or inaccurate. The investigator

  should not use this case as an example to train employees to recognize potential PEPs during their investigation process ? as this could violate confidentiality or data protection laws, as well as compromise the investigation or alert the

  customer or their relative of the suspicion.

  References: 1: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, available at ACAMS

• Question 44:

  During transaction monitoring. Bank A learns that one of their customers. Med Supplies 123, is attempting to make a payment via wire totaling 382,500 USD to PPE Business LLC located in Mexico to purchase a large order of personal

  protective equipment. specifically surgical masks and face shields. Upon further verification. Bank A decides to escalate and refers the case to investigators.

  Bank A notes that, days prior to the above transaction, the same customer went to a Bank A location to wire 1,215,280 USD to Breath Well LTD located in Singapore. Breath Well was acting as an intermediary to purchase both 3-ply surgical

  masks and face shields from China. Bank A decided not to complete the transaction due to concerns with the involved supplier in China. Moreover, the customer is attempting to send a third wire in the amount of 350,000 USD for the

  purchase of these items, this time using a different vendor in China. The investigator must determine next steps in the investigation and what actions, if any.

  should be taken against relevant parties.

  Upon further investigation. Bank As investigator learns that both the Mexico- and Singapore-based companies are linked to the alleged suppliers in China. Which additional indicators would the investigator need to identify to determine if this

  fits a fentanyl (drug) trafficking typology? (Select Two.)

  A. Review of the invoices and transportation documents, provided by the customer, reveal significant discrepancies between the description of goods. Internet research reveals that suppliers are newly established companies with no history of sales of medical equipment.

  B. Review of the account activity reveals that wires were mainly funded by multiple cash deposits, conducted in amounts of 10.000 USD or below.

  C. Review of the Food and Drug Administration (FDA) product certifications provided by the customer reveals that documents were falsified.

  D. Review of the account activity reveals that account is inconsistent with the expected business activity as it shows multiple charges at various hotels, transportation tickets for unrelated 3rd parties, etc.

  Correct Answer: AC

• Question 45:

  A SAR/STR regarding money-mule activity prompts law enforcement action. Under U.S. law, the alleged money mules can be prosecuted:

  A. only if they were aware of their role and actively participated.

  B. in a country only if funds were transferred between accounts maintained in the same country.

  C. unless they can prove they were not aware of the origin of the funds.

  D. even if they were unaware that money was transferred.

  Correct Answer: D

  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. ?1956 and Related Federal Criminal Law, page 7

• Question 46:

  Why is a more robust supervisory approach needed by regulators when overseeing small- and medium-sized money service businesses (MSBs) compared to larger MSBs for combatting terrorist financing (TF)?

  A. Small- and medium-sized MSBs need to be targeted to ensure that competition in the industry remains constant and uniform.

  B. Small- and medium-sized MSBs need to be robustly supervised so the regulator can maintain visibility in combatting TF.

  C. Small- and medium-sized MSBs are more likely to falsify records to appear less risky in order to keep the banking relationship.

  D. Small- and medium-sized MSBs are more at risk of allowing transactions linked to TF due to the lack of skilled compliance resources.

  Correct Answer: D

  A more robust supervisory approach is needed by regulators when overseeing small- and medium-sized MSBs compared to larger MSBs for combatting TF because small- and medium-sized MSBs are more at risk of allowing transactions

  linked to TF due to the lack of skilled compliance resources. Small- and medium-sized MSBs may face challenges in implementing effective AML/CFT controls, such as conducting risk assessments, applying customer due diligence

  measures, monitoring transactions, detecting suspicious activities, and reporting to the authorities. They may also have limited access to training, guidance, and tools to enhance their compliance capabilities. Therefore, regulators need to

  provide more supervision and support to small- and medium-sized MSBs to ensure that they comply with the AML/CFT requirements and mitigate the TF risks.

  References:

  Sustainable Growth for Small and Medium-Sized Enterprises ... - MDPI Lessons on Resilience for Small and Midsize Businesses - HBR

• Question 47:

  A bank investigator notices an account receiving multiple deposits from the same employer under different employees' names. A cash withdrawal occurs one day after each deposit. The outcome of this investigation will likely uncover which crime typology?

  A. Human trafficking

  B. Environmental

  C. Trade-based money laundering

  D. Bribery and corruption

  Correct Answer: D

  The correct answer is A because this scenario describes a possible case of human trafficking, which is a crime where people are exploited for labor or sexual services against their will. Human traffickers may use bank accounts to launder their proceeds and pay their victims, and they may use fake or stolen identities to avoid detection. The other options are not likely because they do not explain why multiple deposits from the same employer under different employees' names would occur, nor why cash withdrawals would follow each deposit. References: : Human Trafficking, : Human Trafficking Red Flags

• Question 48:

  A client at a financial institution deposits large amounts of money into an account, and almost immediately, the funds are then distributed to numerous individuals' accounts. The transaction activity described in the scenario is a pattern of:

  A. geographic usage.

  B. deposit trading.

  C. safe deposit custody.

  D. account usage.

  Correct Answer: B

  Deposit trading is a pattern of suspicious activity where a client deposits large amounts of money into an account, and then transfers the funds to other accounts, often in different jurisdictions or countries. This could be an attempt to disguise the source or destination of the funds, or to avoid reporting requirements. Deposit trading is also known as layering, which is the second stage of money laundering. References: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, page 43; ACAMS Glossary, page 34.

• Question 49:

  Which scenarios are common to money laundering through online marketplaces and trade- based money laundering? (Select Two.)

  A. Over-valuation of the stated price of goods

  B. Use of fraudulent letters of credit

  C. No evidence of delivery of goods or shipping expenses

  D. Frequent conversion of foreign currency

  E. Use of multiple freight forwarding or export companies

  Correct Answer: AC

  Money laundering through online marketplaces and trade-based money laundering both involve the manipulation of the value or quantity of goods to disguise the illicit origin of funds. Over-valuation of the stated price of goods and no evidence of delivery of goods or shipping expenses are two common indicators of such schemes. The other options are not specific to these methods of money laundering. References: Advanced CAMS-FCI Study Guide, page 29-30.

• Question 50:

  The investigative department of a financial institution (Fl) receives an internal escalation notice from the remittance department for a SWIFT message requesting a refund due to potential fraud. The notice indicates that a total of three international incoming remittances were transferred to a corporate customer from Country A, in the amount of approximately 5 million EUR for each. The first two incoming remittances had been exchanged into currency B and transferred out to Country B a few days ago. The third incoming remittance has been held by the remittance department.

  As noted from the KYC profile, the corporate customer is working in the wood industry. with the last account review completed 3 months ago. Since the account's opening. there has been no history of a large amount of funds flowing through the account. The investigator conducts an Internet search and finds that the remitter is a food beverage company.

  The same morning, the investigator receives a call from a financial intelligence unit (FIU) inquiring about the same incident. The FIU states that it will issue a warrant to freeze the account on the same day.

  After further review, the decision is made that transactions appear suspicious. Which are the next steps the investigator should take? (Select Two.)

  A. Close the customer's accounts since the FIU is issuing a warrant to freeze the funds.

  B. Contact local LE and advise them of the investigation details to help speed up the investigation and prosecution.

  C. Provide additional information to the LE upon receiving a formal request.

  D. Close the investigation as the FIU is already on this matter, and they will inform LE if needed.

  E. Gather all the information that would be useful for law enforcement (LE) and recommend filing a SAR/STR

  Correct Answer: CE

  The correct answer is C and E. The investigator should provide additional information to the LE upon receiving a formal request, and gather all the information that would be useful for LE and recommend filing a SAR/STR. These steps are consistent with the best practices of conducting financial crime investigations and reporting suspicious activity. The investigator should not close the customer's accounts or the investigation, as this may interfere with the ongoing LE inquiry and violate the FI's policies and procedures. The investigator should also not contact local LE directly, as this may compromise the confidentiality of the investigation and the FIU's authority. References: Advanced CAMS-FCI Study Guide, Chapter 4: Reporting Suspicious Activity, pages 40-411 Advanced CAMS-FCI Study Guide, Chapter 5: Governance of an AFC Investigations Unit, pages 48-491 Advanced CAMS-FCI Certification | ACAMS