CAMS-FCI practice question 15 of 25

CLIENT INFORMATION FORM Client Name: ABC Tech Corp Client I.D. Number: 08125 Name: ABC Tech Corp Registered Address: Mumbai, India Work Address…

Full set: 101 questions
CLIENT INFORMATION FORM Client Name: ABC Tech Corp Client I.D. Number: 08125 Name: ABC Tech Corp Registered Address: Mumbai, India Work Address: Mumbai. India Cell Phone: *■*•"— Alt Phone: Email: *•*•*«•*• Client Profile Information: Sector: Financial Engaged in business from (date): 02 Jan 2020 Sub-sector: Software-Cryptocurrency Exchange Expected Annual Transaction Amount: 125.000 USD Payment Nature: Transfer received from client’s fund Received from: Clients Received for: Sale of digital assets The client identified themselves as "Cryptocurrency Exchange" Client has submitted the limited liability partnership deed. However, the bank's auditing team is unable to identify the client's exact business profile as the cryptocurrency exchange specified by the client as their major business awaits clearance from the country's regulator. The client has submitted documents/communications exchanged with the regulator and has cited the lack of governing laws in the country of their operation as the reason for the delay. Investigators determine the ultimate beneficial owner of ABC Tech Corp is a high-net-worth client. The client owns a real estate agency left to her when her spouse died. The spouse provided seed capital for ABC Tech Corp through a direct 1,000.000 Great British Pound (GBP) deposit. What additional information would trigger filing a SAR/STR?
Answer options
A: The client's spouse's source of wealth was a salary of 250,000 GBP per annum for the past 4 years and rental of properties of 150,000 GBP per annum for the past 6 years.
B: The client's current net asset value is 8 million GBP, of which 7.5 million GBP was derived from the inheritance.
C: An open-source search revealed that the client's spouse was a PEP.
D: The funds for the seed capital were in the form of 50 cashier's checks of 10,000 GBP each and 50 money orders of 10,000 GBP. Correct answer
Correct Answer:
D. The funds for the seed capital were in the form of 50 cashier's checks of 10,000 GBP each and 50 money orders of 10,000 GBP.
Explanation

The use of a large number of cashier's checks and money orders in uniform, round amounts (10,000 GBP) to fund a single large transaction (1,000,000 GBP) is a classic money laundering red flag known as "structuring" or "smurfing." This method is intentionally used to avoid scrutiny that a single large transaction might attract. While other options present risk factors or plausible information, the act of structuring is a direct indicator of an attempt to conceal the nature and source of funds, which would be a primary trigger for filing a SAR/STR.

Why Incorrect

A. This provides a legitimate and plausible source of wealth for the spouse, which would decrease, not increase, suspicion.
B. Inheritance is a legitimate source of funds and explains the client's high net worth, reducing suspicion.
C. A Politically Exposed Person (PEP) status increases the client's risk profile and mandates enhanced due diligence, but it is not, by itself, a trigger for a SAR.

References

1. Financial Action Task Force (FATF). (2020). Money Laundering and the Illegal Wildlife Trade. Paris: FATF/OECD. (See page 31, which describes structuring with bank drafts and money orders as a common money laundering method).

2. ACAMS. (2023). Certified Anti-Money Laundering Specialist (CAMS) Study Guide. The chapter on "Conducting and Responding to an Investigation" details structuring as a key red flag for money laundering that would warrant a SAR filing.

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