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ACAMS CAMS-FCI Advanced CAMS-Financial Crimes Investigations Exam Practice Test

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Total 101 questions

Advanced CAMS-Financial Crimes Investigations Questions and Answers

Question 1

A compliance analyst is reviewing the account activity of a customer that they suspect may be indicative of money laundering activity. Which is difficult to determine solely from the customer's account activity and KYC file?

Options:

A.

If the activity is materially different from related businesses

B.

If the account has multiple transfers to the same, related businesses

C.

If there is negative media associated with counterparties

D.

If the account is mostly dormant or has little activity

Question 2

A bank’s transaction surveillance system triggers an alert for a deposit of 250.000 USO into a client's account. According to the bank's KYC information, the client works for a financial advisory firm, and earns approximately 100,000 USD per year. Which actions should be taken? (Select Three.)

File the suspicious transaction immediately to the financial intelligence unit.

Options:

A.

Discard the alert as a false positive hit

B.

Request information and documentation from the client on the background of the transaction.

C.

Contact the client advisor to learn if he has any insight on the transaction background.

D.

Review the alert if the deposit is made in cash.

E.

Review the transaction background in the bank's transaction platform.

Question 3

A financial institution (Fl) receives an urgent request for information from the financial intelligence unit (Fl country. According to FATF recommendations, which is the best action for the FI to take?

Options:

A.

Request an official court subpoena with details of the investigation.

B.

Provide as much information as possible to the FIU immediately.

C.

Establish a committee from different areas of the Fl to determine if the request should be answered.

D.

Inform the public relations department to prepare for negative news.

E.

ling the financing of terrorism that could imply an imminenl threat in the

Question 4

Online payments from a customer's account to three foreign entities trigger an investigation. The investigator knows the funds originated from family real estate after an investment company approached the customer online. Funds were remitted for pre-lPO shares. Which should now occur in the investigation?

Options:

A.

Seek evidence for the customer's source of wealth.

B.

Have the relationship manager contact the customer to understand the nature of the transaction.

C.

Review the structure of the transactions to the three entities.

D.

Inspect electronic banking login records.

Question 5

A government entity established a trust to provide social welfare programs. The entity wants cash payments made to persons without supporting documentation. These persons would oversee the allocation of funds to beneficiaries without complying with internal disbursement of government funds controls. Which is the main premise for filing a SAR/STR?

Options:

A.

Trust service providers are not obliged by law to follow government internal controls.

B.

Cash disbursements are not allowed for social welfare programs.

C.

Social welfare programs are difficult to document because the beneficiaries are from the informal sector.

D.

The entity is not implementing adequate internal controls according to what is expected, and mishandling of funds could be occurring.

Question 6

Law enforcement (LE) suspects human trafficking to occur during a major sporting 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."

The Fl receives a keep open' letter from LE for the identified account and agrees to keep the account open. What is the Fl required to do?

Options:

A.

Contact the client for information relating to the account.

B.

Stop filing SAR/STR reports on the account and/or customer.

C.

Ensure that the request includes an end date.

D.

Notify LE immediately after new transactions.

Question 7

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:

Options:

A.

geographic usage.

B.

deposit trading.

C.

safe deposit custody.

D.

account usage.

Question 8

In the past 6 months, a small financial institution (Fl) has received regular remittances that are increasing in value from a country with high piracy activity. The Fl's AML officer (AMLO) has also noted that piracy in this country has increased in the same time frame. Which recommendation should the AMLO make?

Options:

A.

Request the operations department to return inbound remittances when the sender of funds is from this country.

B.

Upgrade the transaction monitoring system of the Fl to include more fields so that more in-depth information is collected about the inward remittances.

C.

File a SAR/STR to the appropriate AML authority immediately.

D.

Conduct an in-depth investigation into accumulated remittance information in the past year to find the trend of such transactions.

Question 9

An unusual spike in activity has occurred for a customer who is a supplier of aviation parts to a military force. The customer's current line of business is consistent with the banks records, and no adverse media hits have occurred. Which is the best reason for an investigator to continue an investigation?

Options:

A.

The end-user is a military force.

B.

There are no adverse media hits.

C.

The customer is a supplier of aviation parts.

D.

The current line of business is consistent with the bank's records.

Question 10

Which might suggest misuse of crowdfunding resources by a terrorist?

Options:

A.

A small charge at a gas station followed by a large charge at an electronics store

B.

A large deposit followed by multiple charges at a sporting goods store

C.

Multiple small deposits followed by a wire transfer to a large well-known international charity

D.

Multiple small deposits followed by the purchase of airplane tickets >

Question 11

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?

Options:

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

Question 12

While each is potentially important, which allows an investigations analyst to better write a SAR/STR narrative that is useful to law enforcement? (Select Two.)

Options:

A.

Including an explanation of the internal process that brought the transaction to the attention of the analyst

B.

Including information about the general activity trends in the area where the suspicious transactions were conducted

C.

Including contact information for individuals at other institutions with whom correspondence has occurred

D.

Including a detailed description of the known or suspected criminal violation or suspicious activity

E.

Ensuring all information in the SAR/STR is complete and accurate based on what the institution knows

Question 13

An investigator at a bank triggered a review in relation to potential misuse of legal persons and a complex network of corporate entities owned by customer A. For the investigator to provide a holistic view of the underlying risk, which action should be the initial focus of the investigation?

Options:

A.

Use data analytics to extract and analyze the linkages between the different entities.

B.

Conduct a network link analysis on all customers of the bank.

C.

Find out whether customer A has relationships with other financial institutions.

D.

Review the customer due diligence documents of each entity and examine the year of incorporation and onboarding channel.

Question 14

What action does the USA PATRIOT Act allow the US government to take regarding financial institutions (FIs) that are based outside of the US?

Options:

A.

Sanction a country when an individual Fl does not comply with US law.

B.

Subpoena documents from FIs that have no presence in the US.

C.

Revoke the banking licenses of non-US FIs in countries outside the US.

D.

Allow all US regulators to place a non-US Fl on the Specially Designated Nationals and Blocked Persons List.

Question 15

The intended benefits of section 314(b) of the USA PATRIOT Act include: (Select Three.)

Options:

A.

sharing the existence and content of SARs/STRs with other participating FIs.

B.

participating FIs sharing information about suspicious activity by customers that may have otherwise gone unnoticed.

C.

providing mandatory results to law enforcement agencies so that they can more easily obtain useful information.

D.

expediting the filing of SARs/STRs due to the information sharing facilitated by 314(b).

E.

detecting money laundering and TF approaches and schemes across multiple financial institutions (FIs).

F.

obtaining additional information on customers or transactions regarding potential money laundering or terrorist financing (TF).

Question 16

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 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 money for a fee before returning it to investors.

What is the total suspicious transaction amount that the investigator should report?

Options:

A.

600,000,000 USD

B.

59,000,000 USD

C.

541.000,000 USD

D.

659,000,000 USD

Question 17

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:

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

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

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

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

• 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?

Options:

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

Question 18

A financial institution (Fl) banks a money transmitter business (MTB) located in Miami. The MTB regularly initiates wire transfers with the ultimate beneficiary in Cuba and legally sells travel packages to Cuba. The wire transfers for money remittances comply with the country's economic sanctions policies. A Fl investigator on the sanctions team reviews each wire transfer to ensure compliance with sanctions and to monitor transfer details.

An airline located in Cuba, unrelated to the business, legally sells airline tickets in Cuba to Cuban citizens wanting to travel outside of Cuba. The airline tickets are purchased using Cuban currency (CUC).

The MTB wants 100,000 USD worth of CUC. Purchasing CUC from a Cuban bank includes a 4% fee. The MTB contacts the airline to ask if the airline will trade its CUC for USD at a lower exchange fee than the Cuban bank. The airline agrees to a 1% fee. The MTB initiates a wire transfer to the airline which appears as normal activity in the monitoring system because of the business' travel package sales.

The investigator recommends that a SAR/STR be filed. What documentation should be referenced in the SAR/STR filing? (Select Three.)

Options:

A.

All documents related to the agreement between the airline and the MTB

B.

Cumulative dollar amount of the wire transfer activity

C.

Airline's ticket sales and passenger list

D.

Cumulative dollar amount for transactions listing for all the MTB account's wire activity regarding travel packages

E.

Licensing information regarding the travel agency providing tourist sales to Cuba

F.

Account documentation on all related accounts maintained by the MTB

Question 19

Which test should be included in a bank's Office of Foreign Assets Control sanctions screening audit program?

Options:

A.

Reviewing wire transfer screening processes to ensure that potential name hits are investigated promptly

B.

Looking at copies of suspicious activity reports filed with regulators to ensure completeness

C.

Ensuring that all clients with foreign identification are subject to enhanced due diligence

D.

Examining Human Resources processes for conducting criminal background checks on executives

Question 20

A KYC specialist from the first line of defense at a bank initiates an internal escalation based on a letter of credit received by the bank.

MEMO

To: Jane Doe. Compliance Manager, Bank B From: Jack Brown, KYC Specialist, Bank B RE: Concerning letter of credit

A letter of credit (LC) was received from a correspondent bank. Bank A. in Country A. in Asia with strict capital controls, providing guarantee of payment to Bank B's client for the export of 10 luxury cars located in Country B. located in Europe. Bank A's customer is a general in the army where Bank A is headquartered.

The information contained in the LC is as follows:

• Advising amount per unit 30.000.00 EU •10 units of BMW

• Model IX3

• Year of registration: 2020

Upon checks on Bank B's client, the exporter mentioned that the transactions were particularly important, and a fast process would be much appreciated in order to avoid reputational damage to the firm and the banks involved in the trade finance process. The exporter has a longstanding relationship with Bank B and was clearly a good income generator. The exporter indicated that, as a general, the importer was trustworthy.

The relationship manager

Feedback from the RM:

The RM contacted the exporter for a client courtesy visit, but it was rearranged four times as the exporter kept cancelling the appointments. When the exporter was finally pinned down for an interview, employees were reluctant to provide clear answers about the basis of the transaction. The employees were evasive when asked about the wider business and trade activity in the country.

Findings from the investigation from various internal and external sources of information:

• There were no negative news or sanctions hits on the exporter company, directors, and shareholders.

• The registered address of the exporting business was a residential address.

• The price of the cats was checked and confirmed to be significantly below the market price of approximately 70,000 EU, based on manufacturer's new price guide.

• The key controllers behind the exporting company, that is the directors and

During the investigation, the investigator determines that a nephew of the general (Bank A's customer) is a customer at Bank B. Which step should the investigator take next?

Options:

A.

File a SAR/STR in relation to corruption involving the nephew and the general.

B.

Determine whether there is a business relationship between the nephew and the general.

C.

Seek senior management approval to continue the relationship with the nephew.

D.

Flag the nephew as a PEP by association.

Question 21

Question # 21

In a review of the account activity associated with Nadine Kien, an investigator observes a large number of small- to medium-size deposits from numerous individuals from several different global regions. The money is then transferred to a numbered company. Which is the next best course of action for the investigator?

Options:

A.

Complete the monthly review and note the activity for next month's review.

B.

File a SAR/STR on the account activity in relation to a potential funnel account.

C.

Recommend the account for exit due to frequent global transactions.

D.

No further action is required as the customer is already rated at high-risk and the monthly spending is within expectations.

Question 22

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

Options:

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

Question 23

Which action is part of the enhanced due diligence process?

Options:

A.

Collecting beneficial ownership details regarding the client's account

B.

Using standard monitoring procedures to monitor transactions and account activity

C.

Verifying the source of wealth for entities and natural person clients

D.

Applying higher ownership percentage requirement for beneficial ownership collection

Question 24

CLIENT INFORMATION FORM Client Name: ABC Tech Corp Client I.D. Number: 08125 Name: ABC Tech Corp Registered Address: Mumbai, India Work Address: Mumbai. India Cell Phone: *■*•"— 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 client’s fund

Received from: Clients

Received for: Sale of digital assets

The client identified themselves as "Cryptocurrency Exchange" 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.

Investigators determine the ultimate beneficial owner of ABC Tech Corp is a high-net-worth client. The client owns a real estate agency left to her when her spouse died. The spouse provided seed capital for ABC Tech Corp through a direct 1,000.000 Great British Pound (GBP) deposit.

What additional information would trigger filing a SAR/STR?

Options:

A.

The client's spouse's source of wealth was a salary of 250,000 GBP per annum for the past 4 years and rental of properties of 150,000 GBP per annum for the past 6 years.

B.

The client's current net asset value is 8 million GBP, of which 7.5 million GBP was derived from the inheritance.

C.

An open-source search revealed that the client's spouse was a PEP.

D.

The funds for the seed capital were in the form of 50 cashier's checks of 10,000 GBP each and 50 money orders of 10,000 GBP.

Question 25

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.

During the investigation, Bank A receives a USA PATRIOT Act Section 314(a) request related to Med Supplies 123. Which steps should the investigator take when fulfilling the request? (Select Three.)

Options:

A.

Exit the relationship with the business since it appears that customer is under investigation.

B.

Do not respond to Financial Crimes Enforcement Network (FinCEN) if the requested information is not present in the financial institution's system of records.

C.

Review the account(s) activity and proactively file a SAR/STR using the 314(a) request as the basis for the filing.

D.

Report to Financial Crimes Enforcement Network (FinCEN) that a match was found without revealing any other details.

E.

Report back to the Financial Crimes Enforcement Network (FinCEN) within 15 days of receipt of the request via a secure internet website.

F.

Search its records expeditiously to determine whether it maintains(ed) any accounts for the subject(s) listed in the request.

Question 26

A U.S. financial institution (Fl) receives a grand jury subpoena for a corporate client's account. The Fl should:

Options:

A.

request the client's consent for the disclosure of account information.

B.

review the corporate account's activity and transactions.

C.

file a SAR/STR.

D.

provide the client with a copy of the subpoena.

Question 27

A country that does not have strong predicate offenses and is lax in prosecuting AML cases could suffer which social/economic consequence?

Options:

A.

US sanctions

B.

Increased organized crime and corruption

C.

Reputation risk for the port

D.

Loss of tax revenue

Question 28

A national financial intelligence unit (FIU) is undertaking the country risk assessment for the financing of the proliferation of weapons of mass destruction (WMD). The evaluation involves determining the exposure that financial institutions (FIs) have to operations that evade sanctions. Which should be performed by the FIU to assess proliferation financing risk? (Select Two.)

Options:

A.

Compare the international finance operations with national PEP lists to determine if the systems used by FIs are properly calibrated to detect WMD proliferation financing.

B.

Cross-reference the databases of international commerce/logistics transactions between the country and WMD proliferation sanctioned states with the corresponding international financial operations of those transactions.

C.

Prepare new regulations that increase fines for FIs that allow financial operations on behalf of WMD proliferation sanctioned states.

D.

Evaluate a sample of the amount of false-positive and false-negative alerts that FIs have regarding proliferation sanctions evasion to determine root causes of non-detection.

E.

Analyze the domestic financial operations that are above the reporting threshold and have similar names to high-level officials of WMD proliferation sanctioned states.

Question 29

In which case should an investigator avoid escalating a suspicious event to the chief compliance officer and pursue other channels?

Options:

A.

The transaction chain is likely connected to a known member of a terrorist organization.

B.

A close family member of the chief compliance officer is the beneficiary of a cross-border transfer.

C.

A trade entity engages in complex trade deals involving numerous third-party intermediaries in incongruent lines of business.

D.

An individual involved in a large sum transaction is a foreign PEP.

Question 30

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?

Options:

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.

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Total 101 questions