Which method is used to launder money in casinos?

1. A. Purchase chips with cash and play at a table
2. B. Purchase chips with cash and redeem for cash
3. C. Purchase chips with cash and redeem for a check
4. D. Purchase chips with cash and sell to another person for cash

Correct Answer: C

A politically exposed person (PEP) maintains an account at a bank. Last month a money laundering analyst filed a suspicious transaction report about unusual wire deposits originated by unknown individuals in the home country of the official. To whom should this situation be escalated?

1. A. The board of directors
2. B. The line of business executive
3. C. The bank’s anti-money laundering officer
4. D. The Financial Action Task Force’s PEP Hotline

Correct Answer: C

The vice president of the foreign correspondent banking department at a large United States bank has been notified that a foreign bank with an offshore license wants to open a correspondent account.
Which two things must the vice president acquire under the USA PATRIOT Act? (Choose two.)

1. A. A list of all the customers of the correspondent bank
2. B. A list of the types of businesses served by the correspondent bank
3. C. Information relating to the foreign bank’s anti-money laundering program
4. D. The identity of 10% owners of the correspondent bank, unless it is publicly traded

Correct Answer: CD

An automotive parts company in South America sends multiple $500,000 wire transfers per week to ABC Holdings Ltd. in Asia referencing payment for silk flower shipments. Research reveals Sunrise Holdings, Ltd is registered in the British Virgin Islands with no available ownership information.
What are two red flags that indicate how trade-based money laundering could be occurring in this instance? (Choose two.)

1. A. The transaction involves the use of front (or shell) companies
2. B. The packaging is inconsistent with the commodity or shipping method
3. C. Significant discrepancies appear between the description of the commodity on the bill of lading and the invoice
4. D. The type of commodity being shipped appears inconsistent with the exporter or importer’s regular business activities

Correct Answer: AC

A customer opens a corporate account with a broker-dealer on behalf of several beneficial owners, with a stated long-term investment goal. The customer deposits $25.5 million into the account and three days later transfers $5 million to an overseas bank. Shortly thereafter, the customer begins making numerous purchases of pesos. The compliance officer receives a query regarding the movement of funds. Within a month of account opening, the customer depletes the account.
Which two red flags should prompt the firm’s compliance officer to take action? (Choose two.)

1. A. The new account deposit is $25.5 million
2. B. A corporate account is opened on behalf of several beneficial owners
3. C. The compliance officer receives the query regarding the movement of funds
4. D. The customer’s stated investment goal is not reflective of account activity

Correct Answer: CD