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?
Answer(s): C
The SAR/STR should include any information that is relevant to the suspicious activity, such as the customer information, the transaction details, and any other indicators of potential money laundering or criminal activity. The fact that one of the transactors occasionally smelled of marijuana smoke is an indicator that the customer may be involved in the illicit drug trade, which is a predicate offense for money laundering. Therefore, this information should be included in the SAR/STR.
Advanced CAMS-FCI Study Guide, page 25.
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.Which investigative actions should the investigator take concerning the 100.000 USD wire transfer? (Select Three.)
Answer(s): A,E,F
The investigator should take the following investigative actions concerning the 100,000 USD wire transfer:Review the wire transfer protocols for this customer. This will help the investigator to determine if the wire transfer is consistent with the customer's normal business activity and risk profile, or if it deviates from the established patterns or thresholds.Review regulations applicable to foreign currency trading transactions. This will help the investigator to assess if the wire transfer violates any laws or regulations related to currency exchange, such as reporting requirements, licensing requirements, or sanctions compliance. Locate and review licenses, registrations, and account operating agreements associated with the MTB account. This will help the investigator to verify if the MTB has the necessary authorization and documentation to conduct currency exchange transactions and if it has disclosed this activity to the FI.
Advanced CAMS-FCI Study Guide, pages 32-33.
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.)
Answer(s): B
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.
Advanced CAMS-FCI Study Guide, page 40-41.
An investigator at a corporate bank is conducting transaction monitoring alerts clearance. KYC profile background: An entity customer, doing business offshore in Hong Kong, established a banking business relationship with the bank in 2017 for deposit and loan purposes. It acts as an offshore investment holding company. The customer declared that the ongoing source of funds to this account comes from group-related companies.· X is the UBO. and owns 97% shares of this entity customer; · Y is the authorized signatory of this entity customer. This entity customer was previously the subject of a SAR/STR.KYC PROFILECustomer Name: AAA International Company. LtdCustomer ID: 123456Account Opened: June 2017Last KYC review date: 15 Nov 2020Country and Year of Incorporation: The British Virgin Islands, May 2017 AML risk level: HighAccount opening and purpose: Deposits, Loans and Trade Finance Anticipated account activities: 1 to 5 transactions per year and around 1 million per transaction amountDuring the investigation, the investigator reviewed remittance transactions activities for the period from Jul 2019 to Sep 2021 and noted the following transactions pattern:TRANSACTION JOURNALReview dates: from July 2019 to Sept 2021For Hong Kong Dollars (HKD) currency:Incoming transactions: 2 inward remittances of around 1.88 million HKD in total from different third partiesOutgoing transactions: 24 outward remittances of around 9 4 million HKD in total to different third partiesFor United States Dollars (USD) currency:Incoming transactions: 13 inward remittances of around 3.3 million USD in total from different third partiesOutgoing transactions: 10 outward remittances of around 9.4 million USD in total to different third parties.RFI Information and Supporting documents:According to the RFI reply received on 26 May 2021, the customer provided the bank with the information below:1) All incoming funds received in HKD & USD currencies were monies lent from non-customers of the bank. Copies of loan agreements had been provided as supporting documents. All of the loan agreements were in the same format and all the lenders are engaged in trading business.2) Some loan agreements were signed among four parties, including among lenders. borrower (the bank's customer), guarantor, and guardian with supplemental agreements, which stated that the customer, as a borrower, who failed to repay the loanBased on the KYC profile and the transaction journal, the pattern of activity shows a deviation in:
Answer(s): A
The correct answer is A because the expected account activities were 1 to 5 transactions per year and around 1 million per transaction amount, but the actual activity showed much more frequent and varied transactions in different currencies and amounts. This indicates a deviation from the customer's profile and risk level.
Advanced CAMS-FCI Study Guide, page 16
An investigator at a corporate bank is conducting transaction monitoring alerts clearance. KYC profile background: An entity customer, doing business offshore in Hong Kong, established a banking business relationship with the bank since 2017 for deposit and loan purposes. It acts as an offshore investment holding company. The customer declared that the ongoing source of funds to this account comes from group-related companies.· X is the UBO. and owns 97% shares of this entity customer; · Y is is the authorized signatory of this entity customer. This entity customer was previously the subject of a SAR/STR.KYC PROFILECustomer Name: AAA International Company. LtdCustomer ID: 123456Account Opened: June 2017Last KYC review date: 15 Nov 2020Country and Year of Incorporation: The British Virgin Islands, May 2017 AML risk level: HighAccount opening and purpose: Deposits, Loans, and Trade Finance Anticipated account activities: 1 to 5 transactions per year and around 1 million per transaction amountDuring the investigation, the investigator reviewed remittance transactions activities for the period from Jul 2019 to Sep 2021 and noted the following transactions pattern:TRANSACTION JOURNALReview dates: from July 2019 to Sept 2021For Hong Kong Dollars (HKD) currency:Incoming transactions: 2 inward remittances of around 1.88 million HKD in total from different third partiesOutgoing transactions: 24 outward remittances of around 9 4 million HKD in total to different third partiesFor United States Dollars (USD) currency:Incoming transactions: 13 inward remittances of around 3.3 million USD in total from different third partiesOutgoing transactions: 10 outward remittances of around 9.4 million USD in total to different third parties.RFI Information and Supporting documents:According to the RFI reply received on 26 May 2021, the customer provided the bank with the information below:1J All incoming funds received in HKD & USD currencies were monies lent from non-customers of the bank. Copies of loan agreements had been provided as supporting documents. All of the loan agreements were in the same format and all the lenders are engaged in trading business.2) Some loan agreements were signed among four parties, including among lenders. borrower (the bank's customer), guarantor, and guardian with supplemental agreements, which stated that the customer, as a borrower, who failed to repay a loanWhich suspicious activity should the investigator identify during the review of the loan agreements?
Answer(s): D
The correct answer is D because it is a suspicious activity that Y, who is the authorized signatory of the customer, also signed on behalf of the lenders. This indicates a possible conflict of interest, collusion, or fraud. The other options are not suspicious activities based on the information given.
[Advanced CAMS-FCI Study Guide], page 17-18
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