Free ACAMS CAMS-FCI Practice Exam with Questions & Answers | Set: 3

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

The observations at the on-site visits that would justify writing a SAR/STR are signs of severe wear and poor maintenance at the site (A), lights turned off at the site during operational hours ©, and a full parking lot of cars with no staff at the site (F). These observations suggest that the daycare businesses are not operating legitimately or providing adequate services to their customers, and that they may be misusing governmental grants or laundering money through their accounts. These observations are consistent with some of the red flags for fraud identified by ACAMS2, such as:

• Inadequate facilities or equipment for the type of business
• Lack of visible activity or customers at the business location
• Discrepancy between reported income and expenses
• Unusual volume or frequency of transactions

The other observations are not as relevant or indicative of fraud as options A, C, and F. A site located in a commercial building (B) could be a normal or legitimate choice for a daycare business, depending on its size, location, and availability. Visible attendance with children being dropped off by parents (D) could show that the daycare business is providing genuine services to its customers, although it does not rule out possible fraud or money laundering. Visible signage indicating the purpose of building (E) could also show that the daycare business is transparent and legitimate, although it does not guarantee its quality or compliance.

References: 1: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, available at ACAMS 2: ACAMS Fraud Prevention eLearning Course Module 3: Fraud Detection Techniques

The most likely reason for conducting a reverse transaction is to conceal or launder illicit funds. A reverse transaction is a transaction that reverses a previous transaction, such as a refund, a chargeback, or a cancellation. Reverse transactions can be used by money launderers to obscure the source, ownership, or destination of funds, or to create false records or invoices. For example, a money launderer may initiate a wire transfer from a high-risk jurisdiction to a low-risk jurisdiction, and then reverse the transaction after receiving confirmation of the funds. This way, the money launderer can create a paper trail that shows legitimate funds coming from a low-risk jurisdiction, while hiding the true origin of the funds.

References: Advanced CAMS-FCI Study Guide, page 40-41.

The fact that should not be included in the SAR/STR narrative is the request by law enforcement (D). This is because the request by law enforcement is confidential and should not be disclosed to the customer or anyone else who is not authorized to know it. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, “the FI should not include any reference to the LE request in the SAR/STR narrative, as this could compromise the LE investigation or alert the customer of the suspicion” (p. 35). The FI should also not inform the customer of the LE request or delay filing the SAR/STR because of it.

The other facts should be included in the SAR/STR narrative, as they are relevant and indicative of human trafficking money laundering. The air travel and hotel expenses (A) show that the customer is involved in moving people across different locations, which could be a sign of human smuggling or trafficking. The time of the cash deposits (B) shows that the customer is receiving cash payments during unusual hours, which could be a sign of illicit activities or services. The sporting event © shows that the customer is exploiting a high-demand situation for their business, which could be a sign of opportunistic or organized crime.

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.

The initial focus of the investigation should be to review the customer due diligence documents of each entity and examine the year of incorporation and onboarding channel, as this would help identify the beneficial owners, the source of funds, and the purpose of the business relationship. This would also help determine if the entities are shell companies or have any red flags that indicate potential misuse of legal persons. Using data analytics to extract and analyze the linkages between the different entities would be a subsequent step, not the initial one. Conducting a network link analysis on all customers of the bank would be too broad and time-consuming. Finding out whether customer A has relationships with other financial institutions would be relevant, but not the initial focus. References: [Advanced CAMS-FCI Study Guide], page 44-45; [FATF Guidance on Transparency and Beneficial Ownership], page 12-13.

The total suspicious transaction amount that the investigator should report is 659,000,000 USD. This is the sum of the two transactions involving the LLC and the state-run oil company, which are 59,000,000 USD and 600,000,000 USD respectively. The other transactions that the LLC made to other accounts, a money brokerage firm, and real estate purchases are not relevant to the question, as they are not part of the series of transactions that triggered the alert.

References: Advanced CAMS-FCI Certification | ACAMS

The investigator should review how the wire transfers were initiated first, because this could indicate the level of involvement and knowledge of the LLC account holders. If the wire transfers were initiated online or by phone, it could suggest that the account holders were trying to avoid face-to-face contact with the bank staff and reduce the chances of being questioned or identified. If the wire transfers were initiated in person at a branch, it could indicate that the account holders were confident or careless about their activities, or that they had some relationship with the bank staff. The method of initiation could also affect the quality and quantity of information collected by the bank about the wire transfers, such as the purpose, source, and destination of the funds. References: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, page 65.

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.”

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