Complete Certified Anti-Money Laundering Specialist (CAMS) Exam with Updated CAMS Exam Dumps

1. An institution has made the decision to exit a client relationship due to anti-money laundering concerns. Prior to starting the close out process, the institution receives a written request from a law enforcement agency to keep the account open. The client is the subject of an ongoing investigation and law enforcement wants the institution to continue to monitor the account and report any suspicious activity.

What is primary consideration the institution should keep in mind when deciding whether to agree to this request?

2. What are two requirements of United States financial institutions when conducting business with an international institution as a result of the USA PATRIOT Act? (Choose two.)

3. Which three criteria does a shell bank meet according to the Wolfsberg Principles on Correspondent Banking? Choose 3 answers.

4. Which of the following is the best action to take regarding a particular account once suspicious activity is reported by the institution?

5. An independent audit function to test the program.

6. A customer comes into a financial institution and deposits a large amount of cash. He has never done that before. When asked about the deposit, he indicates he recently sold a used car and received cash. He does not trust forms of payment and is wary of counterfeit money orders.

What should the bank do?

7. What is true regarding disclosure to a law enforcement agency by a financial institution of the supporting documentation for a suspicious transaction report?

8. A bank employee reviews wire transactions looking for indications of wire stripping.

Which two actions should the employee take to complete appropriate bank procedures? (Choose two.)

9. An automotive parts company in South America sends multiple $500,000 wire transfers per week to ABC Holdings Ltd. in Asia referencing payment for silk flower shipments. Research reveals Sunrise Holdings, Ltd is registered in the British Virgin Islands with no available ownership information.

What are two red flags that indicate how trade-based money laundering could be occurring in this instance? (Choose two.)

10. Which method is used to launder money in casinos?

11. A politically exposed person (PEP) maintains an account at a bank. Last month a money laundering analyst filed a suspicious transaction report about unusual wire deposits originated by unknown individuals in the home country of the official.

To whom should this situation be escalated?

12. A bank customer operates a fuel station as a sole proprietorship. The customer places deposits and other credits in a business account. The customer routinely transfers money from the business account to a brokerage account where he invests in money market securities. The customer also routinely makes monthly transfers to a credit card and line of credit to pay off balances. The volume of activity flowing through the business account has doubled in the past 3 months. An internal investigator reviews business account statements and credit card activity for the past 3 months, scans media articles about the customer, and interviews the account officer about the customer and account activity. This internal investigation did not provide an explanation for the increased activity1.

Which of the following should the anti-money laundering specialist recommend to the internal investigator?

13. A customer has held an account at a bank and has lived locally for over 25 years.

Historically he has come into the bank monthly to deposit a $1,500 retirement check from the company where he worked. He is well known at the bank and often brings the staff cookies. Over the past four months, he has come into the bank every Monday, Wednesday, and Thursday to make $3,000 cash deposits into his account. A review of his account shows that an $8,500 check made out to cash clears his account each week. The bank has decided to file a suspicious transaction report (STR).

What is the important fact to include in the STR?

14. What is an example of the integration stage of money laundering involving a bank or another deposit-taking institution?

15. How does the Financial Acton Task Force (FATF) communicate its findings regarding jurisdictions with strategic anti-money laundering / Counter Financing of Terrorism deficiencies?

16. A compliance officer at an insurance company has been reviewing the transaction activity of several clients.

Which transaction is considered a red flag for potential money laundering?

17. A bank maintains a relationship with a customer who owns a small bakery business.

Which customer action indicates potential money laundering?

18. A U.K. real estate agent has three foreign clients interested in purchasing an apartment building, valued at £30 million, in the outskirts of London as an investment property. The clients are not willing to have their names provided to the bank. The clients want to purchase to be made in the names of three private companies for privacy reasons. The plan is to wire the funds into an account held in the name of another private company at a bank in London.

Which red flag should stop the agent from discussing this potential purchase further?

19. A client is a wholesale auto business that operates as a used car lot. The client regularly ships vehicles internationally. In a four-month period, the client received wires totaling $ 1,250,000 from a dealer in Benin in West AfricA. All wires originated from Benin and were in increments of $50,000.

Account debits made to the account were payable to various transport companies. All incoming checks reference various vehicles purchased. Dock shipping receipts produced by the client to support account

activity identify the vehicles but cannot easily be tied to the wires receives.

What is the suspicious behavior?

20. According to the Financial Action Task Force 40 Recommendations, Designated Non-Financial Businesses and Professionals include which entities?

21. What is a major economic consequence of money laundering through the use of front companies?

22. What do Financial Action Task Force (FATF)-style regional bodies do for their members to help combat money laundering and terrorist financing?

23. Which event occurs most frequently in money laundering in the insurance industry?

24. In the summer, an institution identifies anti-money laundering concerns regarding a customer’s account activity. The customer, an ice cream, has deposited a lot of checks drawn on banks in foreign countries, sent large number of high dollar international wires to different countries, made cash deposits of a few hundred

dollars every few days and written multiple checks for a few hundred dollars to the same dozen payees every two weeks.

Which two transaction types warrant investigation? (Choose two.)

25. Send the deposit documents referenced in the suspicious transaction report.

26. A United States (U.S.) bank was recently alerted by law enforcement of an increase in sale of large denomination U.S. bank notes to casas de cambio. They suspect that a Mexican syndicate is operating a money laundering scheme in the bank’s jurisdiction.

Which two steps should be taken to trace funds through the bank to assist law enforcement in their investigation? (Choose two.)

27. On who does the ultimate responsibility for an institution’s anti-money laundering program rest?

28. Why are Money Services Business (MSBs) frequently accused of being high risk for money laundering?

29. In many jurisdictions, financial institutions are prohibited from hiring a person who has been convicted of what type of offense?

30. According to the Financial Action Task Force 40 Recommendations, Designated Non-Financial Businesses and Professions include

31. Which of the following customer transactions with a securities dealer would indicate the highest suspicion of money laundering?

32. Respondent's location, in particular the existence of a real physical presence.

33. A customer comes into the bank and appears to be ill-at-ease waiting in the teller line. When the customer gets to the teller, he become exceedingly nervous and asks for a large cashier’s check to be cashed and disbursed to him in $100 bills.

What should the teller do after completing the transaction?

34. What are two sources for maintaining up-to-date sanctions information? (Choose two.)

35. The branch manager notices that a number of customers come in weekly and always use the same teller to process their deposits. The manager notices that the customers and the teller, who are from the same ethnic group, are speaking in a foreign language and every once in a while the customers from local ethnic restaurants will bring the teller lunch. The commercial customers that visit the teller generally deposit the same amount of cash each time they come in.

How should the branch manager respond to this activity?

36. All security trading activities for that individual since 2004.

37. 1.What does designing a country as being of “prime money laundering concern” allow the U.S. government to do?

38. Bank A is located in Country A. A wire transfer from Bank B located in Country B is processes by Bank A, where the funds are being moved to a customer at Bank C located in Country C. The wire transfer is deemed suspicious by Bank A.

39. Upon a routine account review a money laundering investigator identified a number of large round dollar wire transfer deposits into a business account owned by a local auto repair shop. The wire transfers all originated from a country that is a known financial secrecy haven with poor anti-money laundering controls. The investigator concludes there appears to be no legitimate business purpose for the wire transfers and files a suspicious transaction report. The owner of the auto repair shop is popular in the community and is a wellknown philanthropist.

To whom should the investigator escalate these concerns?

40. A bank located in Arizona is considering a loan application for a new client. The collateral for the loan is a property in Florida.

The loan will be in the name of a limited company (LLC) whose ownership is not disclosed to the bank. The LLC was established by a New York-based attorney.

The loan will be repaid by the LLC in monthly wire transfers of $9,000 which is more than the required monthly payment.

Which aspect indicates potential for money laundering?

41. The Wolfsberg Anti-Money Laundering Principles for Private Banking require new clients to be approved by whom?

42. What is an essential element of Know Your Customer (KYC) standards according to the Basel Committee’s Customer Due Diligence for Banks paper?

43. A recent anti-money laundering audit revealed several regulatory reporting violations and lapses with the organization’s anti-money laundering policy. As a result, the compliance officer has created a follow-up matrix to document progress in correcting the identified deficiencies.

To whom should the compliance officer provide regular updates of corrective action to help ensure the appropriate oversight?

44. Which of the following customers require the most enhanced due diligence?

45. An offshore company is owned by four equal partners that reside in separate jurisdictions. One partner presents an authenticated power of attorney apparently executed by the remaining three partners in his favor and requests that a bank account be opened on behalf of all partners. He needs this done quickly because there is a large deposit pending. The account-opening officer contacts the bank's anti-money laundering officer for advice.

Which of the following should the anti-money laundering officer advise as an initial step?

46. One key aspect of the Office of Foreign Assets Control’s extraterritorial reach includes the blocking of certain non-United States initiated transactions for or through the United States (U.S.) for benefit of a restricted person or entity.

Under which three circumstances are U.S. banks required to block transactions? (Choose three.)

47. A client opens a bank account for a multi-level marketing company. The debits and credits of the account are numerous and very involved. Further, there are a lot of international transactions. Also, funds are being tunneled from the company to the client’s personal account in another jurisdiction.

Which two steps should law enforcement take in investigating this matter? (Choose two.)

48. Which method to launder money through deposit-taking institutions is closely associated with international trade?

49. Which scenario is closest to the definition of money laundering the United Nations Convention against Transnational Organized Crime and Other Protocols provided?

50. Which three methods are commonly used by an accountant to launder money? (Choose three.)

51. An employee hears a colleague on the telephone with a customer giving advice on how to ensure that a suspicious transaction report will not be filed as a result of a future transaction.

What action should the employee take?

52. Which action should countries take related to the financing of terrorist acts in accordance with the Financial Action Task Force 40 Recommendations?

53. What are two requirements for monitoring and reporting suspicious activity for correspondent banking according to the Wolfsberg Principles? (Choose two.)

54. Which two aspects of precious metals pose the highest risk of money laundering? (Choose two.)

55. A bank is preparing for its anti-money laundering independent review, which is performed every two years under the direction of the compliance officer. The bank’s corporate audit department will conduct the review.

The compliance officer will review the final report before it is released to the Board of Directors.

What is the issue with this situation?

56. The compliance officer for a private bank has been tasked with writing a policy on how the bank will deal with intermediaries.

Which two aspects should be included in the policy in respect of intermediaries to align it with the Wolfsberg Anti-Money Laundering Principles for Private Banking? (Choose two.)

57. What are two requirements with respect to supporting documentation that is used to identify potentially

suspicious activity, according to Financial Action Task Force? (Choose two.)

58. What is the currency threshold under the European Union Fourth Anti-Money Laundering Directive?

59. A branch manager for a small community bank has a new customer who deposits for EUR 50,000 checks into one account. Shortly thereafter, the customer goes to another branch and asks to transfer all but EUR 1,500 to three accounts in different foreign jurisdictions.

Which suspicious activity should be the focus of the suspicious transaction report?

60. A suspicious transaction report filed on a car dealer structuring deposits initiates a criminal investigation. The dealer changes branches and begins placing transactions with a frontline

employee to whom the dealer has given numerous gifts.

This employee handles all of the dealer's structured deposits and does not report the suspicious activity internally.

The competent authority has advised the anti-money laundering specialist to avoid tipping off the employee until the investigation is finalized.

What action should the specialist take next?

61. What are two reasons physical certificates present a money laundering risk to broker-dealers? (Choose two.)

62. According to the European Union Money Laundering Directives, "knowledge, intent or purpose"' required as an element for money laundering may be inferred from

63. A businessman requests a European private bank to open a numbered or alternate name account.

According to the Basel Committee on Banking Supervision principles, which of the following is the most important question the banker should ask?

64. A compliance officer learns from an Information Technology (IT) source of a potential new financial service being discussed by the new product approval committee.

What is the correct next course of action?

65. An audit completed the previous week revealed that a private banking customer submitted incomplete documents when establishing an account earlier in the year. The customer received weekly electronic fund transfers from a narcotic-producing jurisdiction.

While the Relationship Manager who opened the account is on leave for 5 weeks, the customer requests that the institution remit a substantial sum to a country that represents a high risk of money laundering.

The Relationship Manager is a friend of the anti-money laundering specialist.

Which of the following should the anti-money laundering officer do first?

66. A compliance officer provides an overview of the bank’s anti-money laundering program to a group of new tellers during employee orientation.

Which training element should be delivered to this audience?

67. When an institution receives a document request from law enforcement with regard to an STR that the institution has filed, what should institution do?

68. A customer brings $15,000 worth of chips into a casino and plays various games. The customer redeems all the remaining chips and requests a wire transfer of the proceeds to an unrelated third party.

What are two red flags that indicate money laundering? (Choose two.)

69. What is the goal of the Egmont Group in providing a forum for Financial Intelligence Units (FIUs) around the world?

70. What is a key objective of the Egmont Group?

71. Which two channels can be utilized during a cross-border money laundering investigation to assist in gathering information according to Financial Action Task Force? (Choose two.)

72. How can a financial institution verify the nature and purpose of a business and its legitimacy?

73. What are the regulatory risks to a bank employee who willfully violates anti-money laundering laws?

74. The compliance officer for a bank is reviewing on-boarding documents for a new business account for a domestic corporation. The officer is unable to verify the identity of the beneficial owners of the company. Only information on the nominee owners was provided, and none of the listed addresses are local. The purpose of the business and future expected activity were disclosed to include cash letters, money orders and international remittance transfers.

Which red flag identifies a heightened money laundering risk?

75. An anti-money laundering specialist is concerned that several suspicious transaction reports will discuss potential illegal activity of bank employees. In this situation, which of the following is the immediate concern for the institution?

76. Under which two circumstances may law enforcement be given access to a financial institution customer’s

financial records? (Choose two.)

77. What must be materially true regarding transactions for United States (U.S.) sanctions laws to have jurisdiction?

78. A compliance officer at a small community bank has been asked to review existing customer onboarding policies and procedures to ensure they adequately address anti-money laundering risks.

How should customer due diligence be implemented?

79. An internal investigation log is primarily intended to:

80. Which of the following is the financial stage of money laundering?

81. The USA PATRIOT Act requires United States (U.S.) financial institutions to collect certain information from non-U.S. banks that hold a correspondent account.

Which two pieces of information must a non-U.S. bank provide to its U.S. correspondent to enable them to comply with this requirement? (Choose two.)

82. A popular restaurant in town has begun depositing less cash than it has in prior years. In a review of the customer’s accounts, you notice that credit card receipts have increased with no.

The account officer discovers that the restaurant has installed a privately-owned automated teller machine (ATM) onsite and has begun construction on a patio dining area.

Which red flag should trigger additional investigation?

83. Which three procedures should a compliance officer looking to revise an institution’s CTF efforts include in accordance with the Wolfsberg Group’s Statement on the Suppression of the Financing of Terrorism?

84. According to Basel Committee on Banking Supervision's Customer Due Diligence for Banks, which of the following should provide an evaluation of a bank's policies and procedures independent from its management?

85. In general, what is an element that a financial institution or business does not have to specifically address in an anti-money laundering program?

86. Which requirement is included in the Fourth European Union Directive on money laundering?

87. The Wolfsberg Principles

88. A bank’s anti-money laundering section receives an anonymous tip that a customer might be engaging in possible money laundering.

Which two facts should be considered during the course of an investigation into this matter? (Choose two.)

89. A European Union (EU) bank has a correspondent banking relationship with a U.S. bank. Under USA PATRIOT Act Section 311, the U.S. government has enacted special measures against a designated entity that has a payable-through account with the EU bank.

Which of the following actions might the U.S. bank be required to take regarding the EU bank's services for the designated entity?

90. A bank compliance officer has implemented enhanced monitoring rules that have identified some unusual activity that may be indicative of human trafficking.

Which red flag should prompt additional transactional review?

91. Transfers of money over the last 6 months to a corporation in a jurisdiction with strict secrecy laws triggered an alert.

Which of the following should cause the most suspicion of money laundering?

92. Which three stages of money laundering are on-line banking vulnerable to?

93. Which aspect of the USA PATRIOT Act impacts foreign financial institutions?

94. A bank account is established for a new business customer. The business was established five years ago with an address in another state. The business website contains few details other than stating it is a real estate business.

One principal has an international telephone number and appears to be living in another country. The other principal works out of a recreational vehicle.

What warrants enhanced due diligence in this scenario?

95. Frequent wire transfers into an account immediately followed by checks (cheques) or other payment instruments drawn on the account.

96. Which action indicates possible Penza scheme activity?

97. When should the anti-money laundering risk assessment be updated?

98. The anti-money laundering specialist of a small bank has identified suspicious activity at a branch located in an area of town where drug dealers are known to operate. An investigation of this activity discloses that the suspicious transactions occurred within the last 3 months and were processed by the same teller (cashier). The teller (cashier) did not file an internal report of unusual activity on these transactions. When checking personnel files, the specialist finds that the teller (cashier) has been a trusted employee for over 15 years, has an impeccable work record, and has participated in several anti-money laundering training sessions. The specialist recently became aware that the employee's daughter has contracted a rare disease and is undergoing a very expensive treatment program. Regarding the teller's (cashier's) failure to report the unusual activity to the institution, the specialist should recommend

99. When a bank performs a risk assessment, what areas should an institution focus on?

100. Findings from a regulatory examination report states that the job descriptions of personnel outside of the compliance department do not include references to anti-money laundering responsibilities.

Which action should the firm take?