CAMS: Conducting and supporting the investigation process Welcome to your CAMS: Conducting and supporting the investigation process 1. CAMS: Conducting and supporting the investigation process When reviewing a series of complex transactions as part of an anti-money laundering investigation, which of the following would be the MOST indicative of layering? A. Frequent large cash deposits in round numbers. B. Rapid movement of funds between multiple jurisdictions in a short time frame. C. Consistent receipt of wire transfers from a known employer. D. Regular payments to a recognized vendor for services rendered. None 2. CAMS: Conducting and supporting the investigation process In the context of an anti-money laundering investigation, what is the primary purpose of 'peeling'? A. To split large transactions into smaller ones to avoid reporting thresholds. B. To remove high-risk customers from the client base. C. To sequentially withdraw small amounts from a large deposit. D. To strip identifying information from a transaction. None 3. CAMS: Conducting and supporting the investigation process During an investigation, you notice a pattern of back-to-back loans between two entities in different countries. What kind of money laundering risk might this indicate? A. Trade-based laundering. B. Loan stacking. C. Mirror trading. D. Round-tripping. None 4. CAMS: Conducting and supporting the investigation process In the context of anti-money laundering, what is the main risk associated with nested accounts? A. They allow for rapid trading of securities to generate profits. B. They enable the mixing of funds between different clients to obscure the trail. C. They facilitate the direct transfer of funds to high-risk jurisdictions. D. They are used to pay for goods in trade-based money laundering. None 5. CAMS: Conducting and supporting the investigation process In an anti-money laundering investigation, what is the significance of identifying 'Gatekeepers'? A. They are individuals who have authority to approve high-risk transactions. B. They are financial professionals who might assist in structuring transactions or creating legal entities to hide the ownership of funds. C. They refer to regulatory bodies that set compliance standards. D. They are automated systems used to detect suspicious transactions. None 6. CAMS: Conducting and supporting the investigation process When investigating potential trade-based money laundering, which of the following discrepancies is MOST likely to raise red flags? A. Differences in shipment quantities recorded between import and export documentation. B. Consistent pricing of goods over time. C. Regular shipment routes between established trade partners. D. Agreement between declared shipment contents and actual goods received. None 7. CAMS: Conducting and supporting the investigation process Which of the following would be considered a red flag for potential shell company activity? A. The company has operations in a high-risk jurisdiction. B. The company's physical address is shared with multiple other entities. C. The company reports consistent profits year over year. D. The company engages in frequent transactions with known business partners. None 8. CAMS: Conducting and supporting the investigation process What is the primary risk associated with the use of private banking services in the context of anti-money laundering? A. Increased transparency of client activities. B. Lower thresholds for transaction reporting. C. Enhanced due diligence measures. D. The potential for closer, more confidential client relationships to facilitate money laundering. None 9. CAMS: Conducting and supporting the investigation process What is the primary concern when identifying the use of prepaid cards in money laundering? A. They are often used to pay for online purchases. B. They allow for the anonymous transfer of significant sums of money. C. They typically involve low transaction fees. D. They can only be used in the country of issuance. None 10. CAMS: Conducting and supporting the investigation process In the context of anti-money laundering investigations, what is the significance of 'smurfing'? A. It refers to the use of complex algorithms to detect suspicious transactions. B. It is the practice of making small, below-threshold deposits or purchases to avoid detection. C. It is a form of trade-based money laundering involving the import and export of goods. D. It describes the use of virtual currencies for illicit transactions. None 11. CAMS: Conducting and supporting the investigation process When conducting a financial investigation, what is the primary purpose of a 'link analysis'? A. To determine the strength of the currency in which transactions are denominated. B. To establish relationships and patterns between individuals, accounts, and entities. C. To assess the risk level of various types of financial products. D. To calculate the total amount of funds transferred in a suspicious transaction. None 12. CAMS: Conducting and supporting the investigation process In an anti-money laundering context, what is the main purpose of 'red flag indicators'? A. To automatically block suspicious transactions. B. To provide a definitive proof of illegal activity. C. To signal the need for further review or investigation. D. To categorize transactions based on their risk level. None 13. CAMS: Conducting and supporting the investigation process When investigating potential misuse of trade finance for money laundering, which of the following discrepancies should be considered highly suspicious? A. The use of round number invoicing in a series of transactions. B. Disparity between the value of goods and their market value in trade documents. C. Consistent trade activities with long-standing international partners. D. Short-term fluctuations in market prices for traded goods. None 14. CAMS: Conducting and supporting the investigation process In the context of anti-money laundering, 'structuring' is a method used to: A. Aggregate funds into larger amounts for investment. B. Distribute illicit funds into smaller amounts to avoid reporting thresholds. C. Organize corporate entities to optimize tax liabilities. D. Develop complex financial products for high-net-worth clients. None 15. CAMS: Conducting and supporting the investigation process Which of the following is a red flag for potential misuse of correspondent banking relationships for money laundering? A. Frequent, low-value payments to service providers. B. High volume of wire transfers from high-risk jurisdictions without clear economic purpose. C. Regular payroll transactions to verified employees. D. Seasonal payments corresponding to the agricultural production cycle. None 16. CAMS: Conducting and supporting the investigation process What is the primary anti-money laundering concern associated with the use of offshore financial centers? A. Lack of physical banking infrastructure. B. Higher fees for international transactions. C. Stringent regulatory reporting requirements. D. Enhanced secrecy and reduced transparency. None 17. CAMS: Conducting and supporting the investigation process In an anti-money laundering context, what is the primary concern with politically exposed persons (PEPs)? A. They are more likely to engage in high-risk investment strategies. B. Their public status may expose banks to reputational risk. C. They are at a higher risk of being targets for bribery and corruption. D. They typically require more intensive banking services. None 18. CAMS: Conducting and supporting the investigation process When conducting an investigation, what is the significance of identifying transactions that involve 'high-risk countries'? A. It indicates a stronger economic relationship between trading countries. B. It automatically triggers the filing of a Suspicious Activity Report (SAR). C. It requires the transaction to be blocked until clearance from regulators. D. It warrants enhanced due diligence and closer scrutiny of the transaction. None 19. CAMS: Conducting and supporting the investigation process In the context of anti-money laundering, 'Know Your Customer' KYC procedures are crucial because they: A. Ensure the bank offers the most suitable products to the customers. B. Help in identifying customers' preferences and investment strategies. C. Enable the identification and verification of customers to prevent and detect illicit activities. D. Guarantee higher returns on investments for the customers. None 20. CAMS: Conducting and supporting the investigation process What role does 'transaction monitoring' play in an anti-money laundering program? A. It ensures that all transactions are processed within standard time frames. B. It assists in maintaining a competitive edge in the market. C. It helps in detecting unusual patterns of activity that may indicate money laundering or terrorist financing. D. It guarantees the profitability of financial products. None 21. CAMS: Conducting and supporting the investigation process In the context of AML investigations, what is the significance of 'beneficial ownership' information? A. It provides details about the bank's ownership structure. B. It reveals the true individual(s) who ultimately own or control a customer or entity. C. It indicates the profitability of the customer's accounts. D. It determines the creditworthiness of the customer. None 22. CAMS: Conducting and supporting the investigation process The FATF Recommendations are significant in the fight against money laundering primarily because they: A. Provide a set of international standards for countries to implement effective AML/CFT measures. B. Offer financial incentives to countries to enhance their AML/CFT frameworks. C. Mandate the use of specific financial products to combat money laundering. D. Directly penalize individuals and entities involved in money laundering activities. None 23. CAMS: Conducting and supporting the investigation process What is the primary purpose of 'enhanced due diligence' EDD in high-risk situations? A. To expedite the transaction process for high-net-worth individuals. B. To provide additional investment opportunities for customers. C. To apply more rigorous and detailed checks to better understand the potential risk. D. To increase the profitability of the financial institution. None 24. CAMS: Conducting and supporting the investigation process When conducting an AML investigation, what is the significance of 'suspicious activity reports' (SARs)? A. They are used by banks to advertise their products. B. They serve as a primary tool for reporting potential tax evasion. C. They provide a mechanism for financial institutions to report suspicious transactions to the relevant authorities. D. They are confidential reports reviewed only by the board of directors of a financial institution. None 25. CAMS: Conducting and supporting the investigation process What is the primary purpose of conducting a 'source of funds' check in an anti-money laundering investigation? A. To verify the financial stability of the customer. B. To determine the investment strategy of the customer. C. To ensure that the funds are derived from legitimate sources. D. To calculate the tax liability associated with the funds. None 26. CAMS: Conducting and supporting the investigation process In an anti-money laundering context, what is the main concern with 'bearer shares'? A. They allow for dividend payments without tax deductions. B. They represent a fixed income investment with low risk. C. They enable anonymous ownership and transfer of corporate control. D. They are less liquid compared to other types of shares. None 27. CAMS: Conducting and supporting the investigation process What role does 'geographic risk' play in an anti-money laundering program? A. It identifies the countries with the highest investment returns. B. It determines the currency exchange rates for international transactions. C. It assesses the risk associated with transactions involving certain countries or regions. D. It dictates the marketing strategy for global financial products. None 28. CAMS: Conducting and supporting the investigation process In the context of anti-money laundering investigations, 'wire transfer filtering' is primarily used to: A. Ensure the fastest processing of international transactions. B. Monitor and screen electronic fund transfers for suspicious indicators. C. Reduce the operational costs associated with wire transfers. D. Determine the most profitable routing for wire transactions. None 29. CAMS: Conducting and supporting the investigation process What is the primary risk associated with the use of 'correspondent accounts' by shell banks? A. Increased operational costs for the correspondent bank. B. The potential use of the accounts for money laundering due to the lack of physical presence and transparency. C. Lowered interest rates for the correspondent bank's customers. D. Enhanced regulatory scrutiny of the correspondent bank's operations. None 30. CAMS: Conducting and supporting the investigation process During an AML investigation, 'pattern analysis' is primarily used to: A. Predict the future financial market trends. B. Identify anomalies and trends in transaction behavior that may indicate money laundering. C. Assess the profitability of the financial institution's product offerings. D. Determine the customer satisfaction level with the bank's services. None 1 out of 30 Time is Up! Time's up
