A bank compliance officer discovers cash deposit activity inconsistent with the expected and historical cash activity within the personal accounts of the chairman of the board. The cash activity appears structured to avoid the local legal filing requirements for large cash transactions, and a suspicious transaction report (STR) was filed.
How should the compliance officer report the filing of the STR to the board of directors without revealing the existence of the filing to the subject?

1. A. Inform the legal counsel of the bank
2. B. Follow the financial institution’s established STR reporting policy
3. C. Notify the financial institution’s regulator to disclose the activity
4. D. The compliance officer and the chief executive officer should jointly interview the chairman

Correct Answer: A

Which two individuals are ordinarily beneficial owners of a private banking account according to the Wolfsberg Anti-Money Laundering Principles for Private Banking? (Choose two.)

1. A. Those two are authorized signers on the account
2. B. Those who have legal title to a controlling share interest in the customer
3. C. Those who generally have ultimate control through ownership or other means over the funds in the account
4. D. Those who are the ultimate source of funds for the account and whose source of wealth should be subject to due diligence

Correct Answer: CD

A client opens a bank account for a multi-level marketing company. The debits and credits of the account are numerous and very involved. Further, there are a lot of international transactions. Also, funds are being tunneled from the company to the client’s personal account in another jurisdiction.
Which two steps should law enforcement take in investigating this matter? (Choose two.)

1. A. Determine who are the signatories on the account
2. B. Ask the bank for the history of this multi-level marketing company
3. C. Examine the flow of money from the company to the individual in an effort to determine if it is legitimate
4. D. Examine possible Suspicious Activity Report information received from the local Financial Intelligence Units

Correct Answer: AC

A customer has held an account at a bank and has lived locally for over 25 years. Historically he has come into the bank monthly to deposit a $1,500 retirement check from the company where he worked. He is well known at the bank and often brings the staff cookies. Over the past four months, he has come into the bank every Monday, Wednesday, and Thursday to make $3,000 cash deposits into his account. A review of his account shows that an $8,500 check made out to cash clears his account each week. The bank has decided to file a suspicious transaction report (STR).
What is the important fact to include in the STR?

1. A. The recent change in the timing of deposits and withdrawals in the account
2. B. The customer’s work history and the amount of his monthly retirement check
3. C. The fact that the account holder is well known to the bank staff
4. D. The fact that the customer has lived in the area and has banked at this bank for 25 years

Correct Answer: B

A bank located in Arizona is considering a loan application for a new client. The collateral for the loan is a property in Florida.
The loan will be in the name of a limited company (LLC) whose ownership is not disclosed to the bank. The LLC was established by a New York-based attorney. The loan will be repaid by the LLC in monthly wire transfers of $9,000 which is more than the required monthly payment.
Which aspect indicates potential for money laundering?

1. A. The LLC’s ownership is not disclosed to the bank
2. B. The collateral, a property in Florida, is not located in Arizona
3. C. The repayment in the amount of $9,000 indicates potential structuring
4. D. The attorney associated with the account is outside the bank’s lending area

Correct Answer: AC