unit 11.1 anti money laundering and the bank secrecy act
Deposits received in currency for amounts over $10,000 in a day would require the firm to report the transaction in how many days on what form?
CTR within 15 days
Which of the following is not a function of the Office of Foreign Assets Control (OFAC)?
Control the assets of U.S. broker-dealers in foreign countries
Financial institutions such as broker-dealers must report when there is an event, transaction, or series of events or transactions that appear to be questionable to
FinCEN
The bureau of the Treasury Department that combats money laundering and international and domestic terrorist financing is called
FinCEN.
The USA PATRIOT Act's required Customer Identification Program is designed chiefly to prevent I. real estate fraud. II. funding of terrorist activities. III. use of insider information. IV. money laundering.
II and IV
What is the final stage of money laundering?
Integration
A customer enters several orders in complex securities without concern on the returns or losses. This suspicious activity is most likely the result of which stage of money laundering?
Layering
What government organization maintains the Specially Designated Nationals List?
OFAC
Money laundering activities are most easily caught during which phase?
Placement
Which of the following is the first stage in the money laundering process?
Placement
The Office of Foreign Asset Control maintains a list of people and organizations with whom U.S. citizens and companies are not allowed to do business. This list is called the
Specially Designated Nationals List.
Shortly after the branch opens, a customer, Martin, deposits $4,000 in cash into a business account. About midday, his spouse Cindy deposits another $4,000 in cash into the same account. Just before closing, Martin returns and makes another identical $4,000 deposit as he did that morning. What is this action called and which report should be filed?
Structuring, and both a CTR and a SAR should be filed
A bank employee has noticed that one of its customers has deposited $9,000 in his account every Monday, Wednesday and Friday for the past four weeks. Though the action could be legitimate, the customer might be trying to circumvent which of the following?
The Bank Secrecy Act
Which of the following publishes and maintains a list of known terrorists and drug traffickers and those controlled by them or acting on their behalf?
The Office of Foreign Assets Control (OFAC)
Which of the following acts deals with money laundering?
The PATRIOT Act
An officer of a financial firm has identified what might represent suspicious behavior on the part of a customer, involving more than $5,000. When must the firm file a suspicious activity report (SAR)?
Within 30 calendar days
As a part of its anti-money laundering (AML) policies, every financial institution must appoint
an AML officer.
The Bank Secrecy Act requires that all financial services firm must appoint
an anti-money laundering officer.
A broker-dealer would likely file a suspicious activity report (SAR) if the amount involved was
at least $5,000 in funds or other assets.
All of the following are stages of money laundering except A) integration. B) placement. C) layering. D) diversification.
diversification
You notice a new customer, Malcolm Wren, has a pattern of buying and selling stocks with holding periods of just a day or two. He seems unconcerned with losses. Additionally, between trades, he wires the money to and from a number of offshore accounts. After informing your supervisor, the most likely action for your company is to
file a SAR with FinCEN.
A customer wishes to deposit $20,000 in cash into her account. This requires
filing a CTR with FinCEN.
A new customer performs a series of rapid, losing trades. When asked, the customer expresses no concern about the losses. The broker-dealer should consider
filing a SAR with FinCEN.
Records relating to a Currency Transaction Report (CTR) must be retained for
five years.
All of the following are stages of money laundering except A) placement. B) initiation. C) integration. D) layering.
initiation
The final phase of money laundering, when the money moves into the legal economy, is called
integration.
The process of making money that appears to have come from legal activities when it in fact it came from illegal activities is called
money laundering.
An AML compliance officer should do all of the following except
notify customers immediately when an SAR is being filed.
Under the USA PATRIOT Act, financial firms must create and maintain records of wire transfers only
of $3,000 or more.
Those who look to hide money from government agencies and law enforcement to avoid the payment of taxes or to fund criminal enterprises often look to launder money in the following order:
placement, layering, integration.
The first stage of money laundering is
placement.
A customer who tries to disguise deposits of more than $10,000 in currency by making multiple smaller deposits in currency is guilty of
structuring
During the course of a day a customer makes six separate cash deposits at six different branches totaling over $11,000. This may be an example of
structuring, and a CTR should be filed.
The Specifically Designated Nationals (SDN) list must be checked
when opening a new account for an individual or other entity.
Which of the following would require the filing of a SAR? Any transaction alone or in aggregate involving at least
$5,000 and appears to serve no business or legal purpose.
Firms must file a SAR within how many days of becoming aware of a suspicious transaction?
30 days, and they are prohibited from notifying the customer involved that a report has been filed
Which of the following would require the filing of a suspicious activity report (SAR)?
Any transaction alone or in aggregate involving at least $5,000 and appears to serve no business or legal purpose.
If a broker-dealer suspects that a transaction involves funds derived from illegal activity, a suspicious activity report (SAR) would be triggered at what threshold?
At least $5,000 in funds or other assets
