Which are red flags indicating potential engagement of a bank employee in money laundering? (Select Two.)

A lavish lifestyle that is inconsistent with an employee's known salary is a significant red flag for illicit enrichment, potentially from bribes or participation in a money laundering scheme. Similarly, an employee's reluctance to take a vacation is a classic indicator of internal fraud or misconduct. The employee may fear that their replacement will uncover the illicit activity, and therefore feels compelled to remain at work to maintain control over the accounts or transactions involved in the scheme.

C. Failure to meet business goals for more than one period: This is typically a performance management issue, not a direct indicator of money laundering.
D. Providing longer than usual services for a certain customer: This is ambiguous and could be interpreted as excellent customer service rather than a red flag.
E. Maintaining friendships with customers and going to restaurants, games, and other events: This can be a normal part of business development and relationship management, especially in private banking.

1. ACAMS CAMS6-SGS (Certified Anti-Money Laundering Specialist Study Guide), 6th Edition. Chapter 4, "Compliance Standards for Anti-Money Laundering and Combating the Financing of Terrorism," Section: "Red Flags That May Indicate an Employee is Complicit in Money Laundering." The guide explicitly lists "Employee lives a lavish lifestyle that is not supported by his or her salary" and "Employee is reluctant to take time off" as key indicators. (Specific reference: Page 278).

2. Financial Action Task Force (FATF). Money Laundering and Terrorist Financing Vulnerabilities of Legal Professionals. (June 2013). While focused on legal professionals, the principles of internal controls are universal. The report discusses the importance of staff screening and monitoring for unusual behavior, which encompasses unexplained wealth and other behavioral changes. (See Section IV, "Vulnerabilities," paragraphs 68-72).

3. Buchanan, B. (2004). Money Laundering – A Guide for Criminal Investigators, 3rd Edition. This academic and professional guide details common indicators of money laundering. Chapter 5, "The Money Laundering Process," discusses internal complicity and notes that unexplained wealth and unusual work habits (like refusing vacations) are classic signs requiring investigation.