Acams CAMS-FCI Advanced CAMS-Financial Crimes Investigations Exam Practice Test

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Question 1

The training department is conducting awareness training for unusual customer identification scenarios. Which two indicators should be included? (Select Two.)

AThe customer opens the account in the name of a family member who begins making large deposits.

BThe customer's name and home address cannot be verified

CThe customer's internet protocol address does not match the identifying information provided during online registration.

DThe customer requests payment of proceeds to an unrelated third party.

EThe customer frequently exchanges small bills for large bills.

Answer : A, B

This information can be found in the Certified Anti-Money Laundering Specialist (CAMS) study guide, 6th edition, under the section on Unusual Customer Identification Scenarios. The guide explains that two indicators that should be included in awareness training for unusual customer identification scenarios are:

A . The customer opens the account in the name of a family member who begins making large deposits.

This is an indicator of potential structuring, where a customer may be attempting to avoid triggering reporting thresholds by depositing funds in smaller amounts over time. It is important for staff to be aware of this scenario and to monitor accounts for potential suspicious activity.

B . The customer's name and home address cannot be verified.

This is an indicator of potential identity theft or other fraudulent activity. If a customer's identifying information cannot be verified, it is important for staff to conduct additional due diligence to ensure that the customer is legitimate and that the account is not being used for illicit purposes.

Question 2

An investigator receives an alert documenting a series of transactions. A limited liability corporation (LLC) wired 59.000,000 USD to an overseas account associated with a state-run oil company. A second account associated with the state-run oil company wired 600,000,000 USD to the LLC. The LLC then wired money to other accounts, a money brokerage firm, and real estate purchases.

The investigator initiated an enhanced KYC investigation on the LLC. The financial institution opened the LLC account a couple of weeks prior to the series of transactions. The names associated with the LLC had changed multiple times since the account opened. A search of those names revealed relations with multiple LLCs. Public records about the LLCs did not show any identifiable business activities.

Open-source research identified mixed reports about the brokerage firm. The firm indicated it purchased mutual funds for its clients and dispensed returns to clients.

Media reports claimed the firm laundered money by holding for a fee before returning it to investors.

The investigator discovers that the bank has no records pertaining to ownership of the LLC. What would this mean for the bank and/or investigator?

AThe bank may not be able to file a SAR/STR without the ownership data.

BThe bank is out of compliance with beneficial ownership regulations.

CThe bank is out of compliance with CIP regulations.

DThe bank cannot respond to law enforcement requests without the ownership data.

Answer : C

The bank is out of compliance with CIP regulations because it did not obtain the minimum identifying information from the customer prior to opening the account, as required by 31 CFR 1020.220(a)(2)(i)(A). The bank should have obtained the name, date of birth, address, and identification number of the customer, as well as verified the identity of the customer to the extent reasonable and practicable. The lack of ownership data may also indicate a violation of beneficial ownership regulations, but that is not the primary issue in this case.

Question 3

SAR/STR NARRATIVE

A SAR/STR has been submitted on five transactions conducted on the correspondent banking relationship with ABC Bank.

Client Information:

Remitter information: DEF Oil Resource Ltd. is the oldest member of the DEF Group. It was founded in 1977 as a general trading business with a primary focus on exports from Africa and North Americ

a. The group has business activities that span the entire energy value chain. Their core field of endeavor is centered within the oil and gas industry and its associated sub-sectors.

Beneficiary Information:

As per the response received from ABC Bank, it was determined that the beneficiaries are related to DEF Oil Resource Ltd. These were created by DEF Oil Resource Ltd. to purchase property in a foreign country on behalf of their senior management as part of a bonus scheme. The purpose behind this payment was for the purchase of property in another country.

Payment Reference:

ABCXXXXX31PZFG2H

ABCXXXXXX51PQGEH

ABCXXXXXX214QWVG

ABCXXXXXX41PSXA2

ABCXXXXXX815QWS3

Concerns:

* We are unsure about the country of incorporation of the beneficiaries.

* We are concerned about the transactional activity since the payment made towards entities (conducted on behalf of individuals) appears to be possible tax evasion.

* There appears to be an attempt to conceal the identity of individuals (senior management), which again raises concerns about the source of funds.

* Referring to the response received from ABC Bank, we are unclear about the ultimate beneficiary of funds.

* The remitter is involved in a high-risk business, (i.e., oil and crude products trading), and the beneficiary is involved in real estate business which again poses a higher risk.

When drafting the SAR/STR narrative, the investigator notes several payment references. What additional information should the investigator include in the narrative?

AThe investigator's concerns based on their subjective opinion

BThe suspicious accounts and transactions identified

CAll relevant tables, spreadsheets, and other supporting documentation

DPersonal tax records pertinent to the owners to indicate tax evasion

Answer : B

The SAR/STR narrative should include the suspicious accounts and transactions identified, as well as the reasons why they are considered suspicious. The narrative should provide a clear and concise description of the activity, the parties involved, the dates, amounts, and frequencies of the transactions, and any other relevant information that would assist law enforcement in understanding the nature and purpose of the activity. The narrative should not include the investigator's subjective opinion, personal tax records, or supporting documentation that is not essential to explain the suspicious activity. Supporting documentation can be attached separately to the SAR/STR form or provided upon request by law enforcement.

Question 4

SAR/STR NARRATIVE

A SAR/STR has been submitted on five transactions conducted on the correspondent banking relationship with ABC Bank.

Client Information:

Remitter information: DEF Oil Resource Ltd. is the oldest member of the DEF Group. It was founded in 1977 as a general trading business with a primary focus on exports from Africa and North Americ

a. The group has business activities that span the entire energy value chain. Their core field of endeavor is centered within the oil and gas industry and its associated sub-sectors.

Beneficiary Information:

Payment Reference:

ABCXXXXX31PZFG2H

ABCXXXXXX51PQGEH

ABCXXXXXX214QWVG

ABCXXXXXX41PSXA2

ABCXXXXXX815QWS3

Concerns:

* We are unsure about the country of incorporation of the beneficiaries.

* We are concerned about the transactional activity since the payment made towards entities (conducted on behalf of individuals) appears to be possible tax evasion.

* There appears to be an attempt to conceal the identity of individuals (senior management), which again raises concerns about the source of funds.

* Referring to the response received from ABC Bank, we are unclear about the ultimate beneficiary of funds.

* The remitter is involved in a high-risk business, (i.e., oil and crude products trading), and the beneficiary is involved in real estate business which again poses a higher risk.

While reviewing the account activity, it is noted that several transfers are sent to a company located in an offshore jurisdiction. Which step should the investigator take next?

ARequest information from the company.

BFile a SAR/STR to the FIU where the company is located.

CRequest information about the beneficiaries related to the company.

DConduct an open-source search to determine the ownership and registration of the company.

Answer : C

The best step for the investigator to take next is to request information about the beneficiaries related to the company. This will help to identify the ultimate beneficial owners of the funds and the purpose of the transactions. Requesting information from the company or filing a SAR/STR to the FIU where the company is located may not be feasible or effective, as the company may not cooperate or the FIU may not have jurisdiction over the offshore entity. Conducting an open-source search may provide some information about the ownership and registration of the company, but it may not be sufficient or reliable to determine the nature and legitimacy of the transactions.

SAR Narrative Guidance Package

Best Practices for Drafting an STR or SAR

Question 5

SAR/STR NARRATIVE

A SAR/STR has been submitted on five transactions conducted on the correspondent banking relationship with ABC Bank.

Client Information:

Remitter information: DEF Oil Resource Ltd. is the oldest member of the DEF Group. It was founded in 1977 as a general trading business with a primary focus on exports from Africa and North Americ

a. The group has business activities that span the entire energy value chain. Their core field of endeavor is centered within the oil and gas industry and its associated sub-sectors.

Beneficiary Information:

Payment Reference:

ABCXXXXX31PZFG2H

ABCXXXXXX51PQGEH

ABCXXXXXX214QWVG

ABCXXXXXX41PSXA2

ABCXXXXXX815QWS3

Concerns:

* We are unsure about the country of incorporation of the beneficiaries.

* We are concerned about the transactional activity since the payment made towards entities (conducted on behalf of individuals) appears to be possible tax evasion.

* There appears to be an attempt to conceal the identity of individuals (senior management), which again raises concerns about the source of funds.

* Referring to the response received from ABC Bank, we are unclear about the ultimate beneficiary of funds.

* The remitter is involved in a high-risk business, (i.e., oil and crude products trading), and the beneficiary is involved in a real estate business which again poses a higher risk.

The monitoring system of the correspondent institution flags the transaction as suspicious activity. The correspondent bank needs to send a request for information to the respondent bank. Which elements should be included in the request? (Select Three.)

ADetails of DEF Oil Resource Ltd parent company and the name(s) of the beneficial owner(s)

BFull transaction history of the correspondent bank's customer

CThe account profile of the customer and their KYC data

DThe respondent bank's customer's senior management bonus plan

EThe contract pertaining to the purchase of property in another country

FThe last 6 months of transactional history

Answer : A, C, E

The request for information should include the following elements:

Details of DEF Oil Resource Ltd parent company and the name(s) of the beneficial owner(s) (Option A): This is necessary to verify the identity and ownership structure of the remitter and to assess the risk level of the customer and the transaction.

The account profile of the customer and their KYC data (Option C): This is necessary to understand the nature and purpose of the customer's business relationship with the respondent bank and to compare it with the observed transactional activity.

The contract pertaining to the purchase of property in another country (Option E): This is necessary to verify the legitimacy and source of funds for the transaction and to identify the ultimate beneficiary of funds.

The other options are not relevant or necessary for the request for information. The full transaction history of the correspondent bank's customer (Option B) is too broad and may not be related to suspicious activity. The respondent bank's customer's senior management bonus plan (Option D) is not relevant to the transaction and may not be available to the respondent bank. The last 6 months of transactional history (Option F) is also too broad and may not be related to the suspicious activity.

Advanced CAMS-FCI Certification Handbook, page 19

Question 6

Which scenarios are common to money laundering through online marketplaces and trade-based money laundering? (Select Two.)

AOver-valuation of the stated price of goods

BUse of fraudulent letters of credit

CNo evidence of delivery of goods or shipping expenses

DFrequent conversion of foreign currency

EUse of multiple freight forwarding or export companies

Answer : A, C

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.

Question 7

Which information is it best practice to share at the very beginning of a well-written SAR/STR narrative?

AA specific description of the involved accounts and transactions, including the origination and application of funds

BThe purpose of the SAR/STR narrative and a general description of the known or alleged violation

CInformation about any follow-up actions conducted by the financial institution on the account

DAny and all relevant facts about the parties who facilitated the suspicious activity or transactions

Answer : B

The best information to share at the very beginning of a well-written SAR/STR narrative is the purpose of the SAR/STR narrative and a general description of the known or alleged violation. This is because this information provides an overview of why the SAR/STR is being filed and what type of suspicious activity or transaction is involved. It also helps to capture the attention of the reader and set the tone for the rest of the narrative.