CAMS-FCI practice question 14 of 25

An investigator receives an alert documenting a series of transactions. A limited liability corporation (LLC) wired 59.000,000 USD to an overseas…

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 money for a fee before returning it to investors. Which information should the investigator review first when examining the wire transaction documentation?

Answer options

A: The sanctions screening tool to see if the transaction was stopped

B: Whether the wire transfers were initiated domestically

C: The Travel Rule requirements for recordkeeping

D: How the wire transfers were initiated (e.g., phone, online, branch visit) Correct answer

Correct Answer:

D. How the wire transfers were initiated (e.g., phone, online, branch visit)

Explanation

The investigator is dealing with a highly suspicious new LLC with opaque ownership and large, unusual transactions. Determining how the wires were initiated is a crucial first step. This information provides immediate context about the transactor's methods and potential for identification. An in-person transaction provides a physical description and potential video evidence, while an online transaction points to IP addresses and digital forensics. This initial step helps frame the entire investigation by focusing on the individuals behind the shell company, which is a primary concern given the rapid changes in associated names.

Why Incorrect

A. The transaction was processed, generating an alert. Reviewing the sanctions tool now is redundant; the investigation is the next logical step after the initial screening.
B. The scenario already establishes that the wires were international ("overseas account"), so verifying this is not the first investigative action to take.
C. The Travel Rule pertains to information that should be in the wire details. The investigator will review that data, not the rule's requirements itself.

References

1. Financial Action Task Force (FATF). (2020). Guidance on Digital Identity. FATF, Paris, France. (p. 21, Section 55 discusses how the method of transaction, non-face-to-face vs. face-to-face, is a key variable in assessing risk).

2. ACAMS. (2023). CAMS Certified Anti-Money Laundering Specialist Study Guide. (Chapter 3: "The Investigation Process" emphasizes gathering all underlying documentation, where the method of initiation is a key data point for understanding customer behavior).

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