CAMS-FCI practice question 13 of 25

An investigator is reviewing an alert for unusual activity. System scanning detected a text string within a company customer's account transactions…

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 marijuan a. 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 are the best next steps for the investigator to take? (Select Three.)

Answer options

A: Review the customer's transaction history. Correct answer

B: Request information from the internet service provider who hosts the website.

C: Check internal KYC information. Correct answer

D: Research other customer accounts for transactions to the same website.

E: Conduct adverse media and open-source searches on the customer's background. Correct answer

F: Identify if the customer has opened accounts in an urban city area.

Correct Answer:

A. Review the customer's transaction history.; C. Check internal KYC information.; E. Conduct adverse media and open-source searches on the customer's background.

Explanation

The initial alert and review have raised significant red flags. The best next steps involve a comprehensive investigation to gather sufficient information before deciding on further action, such as filing a Suspicious Activity Report (SAR). This requires reviewing the customer's entire transaction history for patterns (A), re-examining the Know Your Customer (KYC) file to see if this activity aligns with the stated business purpose (C), and using external public sources to find any corroborating adverse information (E). These steps combine internal and external research to build a complete picture of the customer's activity and risk profile.

Why Incorrect

B. Requesting information from an ISP is an advanced step requiring legal authority (e.g., a subpoena), which a financial investigator does not have.
D. While useful for network analysis, investigating other customers is a secondary step. The immediate priority is the primary subject of the alert.
F. The customer's location in an urban area is not, by itself, an indicator of risk and is not a standard investigative step.

References

1. Financial Action Task Force (FATF). (2012-2023). International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation – The FATF Recommendations. Paris: FATF/OECD. Recommendation 10, "Customer Due Diligence," and its Interpretive Note emphasize the need for ongoing due diligence and scrutiny of transactions to ensure they are consistent with the institution's knowledge of the customer and their business.

2. U.S. Department of the Treasury, Financial Crimes Enforcement Network (FinCEN). (2007). The SAR Activity Review - Trends, Tips & Issues, Issue 13. Section 5, "Tips on SAR Review and Triage," outlines the importance of using all available information, including customer due diligence data and transaction history, during an investigation.

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