Acams Advanced CAMS-Financial Crimes Investigations CAMS-FCI Exam Practice Test

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Total 101 questions
Question 1

An investigator is reviewing an alert for unusual activity. System scanning detected a text string within a company customer's account transactions that indicates the account may have been used for a drug or drug paraphernalia purchase Based on the KYC profile, the investigator determines the customer's company name and business type are marketed as a gardening supplies company. The investigator reviews the account activity and notes an online purchase transaction that leads the investigator to a website that sells various strains of marijuan

a. Additional account review detects cash deposits into the account at the branch teller lines, so the investigator reaches out to the teller staff regarding the transactions. The teller staff member reports that the business customers have frequently deposited cash in lower amounts. The teller, without prompting, adds that one of the transactors would occasionally smell of a distinct scent of marijuana smoke.

Which are the best next steps for the investigator to take? (Select Three.)



Answer : A, C, E

The best next steps for the investigator to take are:

A . Review the customer's transaction history. This can help the investigator identify any patterns or anomalies in the customer's account activity, such as changes in transaction volume, frequency, amount, source, destination, purpose, etc. The investigator can also compare the customer's transaction history with their KYC profile and risk rating to assess if there are any discrepancies or inconsistencies.

C . Check internal KYC information. This can help the investigator verify the customer's identity, business nature, ownership structure, expected activity, source of funds, etc. The investigator can also update or enhance the customer's KYC information based on any new or relevant information obtained from other sources.

E Conduct adverse media and open-source searches on the customer's background. This can help the investigator find out if there is any negative or adverse information about the customer in public data sources, such as news articles, social media posts, blogs, forums, etc. Adverse media and open-source searches can also provide additional context and insight into the customer's reputation, behavior, associations, etc. The other options are incorrect because:

B . Request information from the internet service provider who hosts the website is not feasible, as it may require a legal process or a court order to obtain such information. Moreover, the internet service provider may not have or disclose any useful information about the website or its owner.

D . Research other customer accounts for transactions to the same website is not relevant, as it may not provide any meaningful information about the customer under investigation. Furthermore, it may violate the privacy and confidentiality of other customers who are not related to the investigation.

F . Identify if the customer has opened accounts in an urban city area is not helpful, as it may not have any bearing on the customer's involvement in a drug or drug paraphernalia purchase. Additionally, it may not be possible to access or verify such information without the customer's consent or authorization.


Advanced CAMS-FCI Certification | ACAMS, Section 2: Investigating Financial Crimes, page 11

Leading Complex Investigations Certificate | ACAMS, Module 3: Conducting Research and Analysis, page 6

Adverse Media Screening - Using AI to Mitigate Risk

Legal requirements for adverse media screening - Thomson Reuters

Electronic client due diligence | Ethics helpsheets | ICAEW

6AMLD & FATF: Where Adverse Media Screening Fits In

Free Adverse Media Check | NameScan

Question 2

Due to an ever-diversifying business model and multi-jurisdictional footprint, a casino has decided to outsource the source of funds and wealth checks to a third-party provider. Why is it important for the casino to maintain control of the output from the provider?



Answer : C

The reason why it is important for the casino to maintain control of the output from the provider is that the casino maintains ultimate responsibility for this activity and should maintain control to avoid non-compliance . This is because the casino is accountable for its own AML/CFT obligations and cannot delegate or outsource them to a third-party provider. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, ''the FI should ensure that it has adequate oversight and control over any third-party providers that it engages for AML/CFT purposes, such as conducting due diligence, verifying information, or monitoring transactions'' (p. 25). The FI should also ''review and evaluate the performance and quality of the third-party providers on a regular basis, and address any issues or gaps that may arise'' (p. 25).

The other options are not as relevant or accurate as option C. The clients of the casino prefer to know that the casino is keeping their information secure when being held by a third-party (A) is not a reason why the casino should maintain control of the output from the provider, but rather a customer expectation or preference. As with all third-party relationships, proper control must be maintained to ensure profitability (B) is not a reason why the casino should maintain control of the output from the provider, but rather a general business principle or objective. Other casinos are frequently looking to reduce costs and share ideas, so if this relationship is successful, the model can be used by other businesses (D) is not a reason why the casino should maintain control of the output from the provider, but rather a potential benefit or outcome.


Question 3

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 for a fee before returning it to investors.

The investigator discovers that the bank has no records pertaining to ownership of the LLC. What would this mean for the bank and/or investigator?



Answer : C

The bank is out of compliance with CIP regulations because it did not obtain the minimum identifying information from the customer prior to opening the account, as required by 31 CFR 1020.220(a)(2)(i)(A). The bank should have obtained the name, date of birth, address, and identification number of the customer, as well as verified the identity of the customer to the extent reasonable and practicable. The lack of ownership data may also indicate a violation of beneficial ownership regulations, but that is not the primary issue in this case.


Question 4

An investigator at a corporate bank is conducting transaction monitoring alerts clearance.

KYC profile background: An entity customer, doing business offshore in Hong Kong, established a banking business relationship with the bank in 2017 for deposit and loan purposes. It acts as an offshore investment holding company. The customer declared that the ongoing source of funds to this account comes from group-related companies.

* X is the UBO. and owns 97% shares of this entity customer;

* Y is the authorized signatory of this entity customer. This entity customer was previously the subject of a SAR/STR.

KYC PROFILE

Customer Name: AAA International Company. Ltd

Customer ID: 123456

Account Opened: June 2017

Last KYC review date: 15 Nov 2020

Country and Year of Incorporation: The British Virgin Islands, May 2017

AML risk level: High

Account opening and purpose: Deposits, Loans and Trade Finance

Anticipated account activities: 1 to 5 transactions per year and around 1 million per

transaction amount

During the investigation, the investigator reviewed remittance transactions activities for the period from Jul 2019 to Sep 2021 and noted the following transactions pattern:

TRANSACTION JOURNAL

Review dates: from July 2019 to Sept 2021

For Hong Kong Dollars (HKD) currency:

Incoming transactions: 2 inward remittances of around 1.88 million HKD in total from

different third parties

Outgoing transactions: 24 outward remittances of around 9 4 million HKD in total to

different third parties

For United States Dollars (USD) currency:

Incoming transactions: 13 inward remittances of around 3.3 million USD in total from

different third parties

Outgoing transactions: 10 outward remittances of around 9.4 million USD in total to

different third parties.

RFI Information and Supporting documents:

According to the RFI reply received on 26 May 2021, the customer provided the bank

with the information below:

1) All incoming funds received in HKD & USD currencies were monies lent from non-customers of the bank. Copies of loan agreements had been provided as supporting documents. All of the loan agreements were in the same format and all the lenders are engaged in trading business.

2) Some loan agreements were signed among four parties, including among lenders. borrower (the bank's customer), guarantor, and guardian with supplemental agreements, which stated that the customer, as a borrower, who failed to repay the loan

Based on the KYC profile and the transaction journal, the pattern of activity shows a deviation in:



Answer : A

The correct answer is A because the expected account activities were 1 to 5 transactions per year and around 1 million per transaction amount, but the actual activity showed much more frequent and varied transactions in different currencies and amounts. This indicates a deviation from the customer's profile and risk level.


Question 5

Which pattern of activity most strongly indicates an individual is a foreign terrorist fighter?



Answer : B

The pattern of activity that most strongly indicates an individual is a foreign terrorist fighter is a large cash advance on a credit card and purchases at travel and sporting goods websites. This is because this pattern may suggest that the individual is preparing to travel to a conflict zone and purchase equipment or supplies for terrorist activities. According to the United Nations Office on Drugs and Crime, some of the indicators of foreign terrorist fighters include1:

Sudden or increased financial activity, such as cash withdrawals, transfers, or deposits, especially in large amounts or involving foreign currency or locations.

Purchases of travel-related items, such as airline tickets, passports, visas, luggage, or clothing, especially to or from high-risk destinations or transit hubs.

Purchases of items that could be used for terrorist purposes, such as weapons, explosives, chemicals, communication devices, or survival gear.

Changes in behavior, such as expressing radical views, cutting ties with family or friends, joining extremist groups, or displaying signs of emotional distress.


Foreign Terrorist Fighters - United Nations Office on Drugs and Crime

Question 6

An analyst reviews an alert for high volume Automated Clearing House (ACH) activity in an account. The analyst's initial research finds the account is for a commercial daycare account that receives high volumes of large government-funded ACH transactions to support the programs. The account activity consists of checks (cheques) made payable to individual names in varying dollar amounts. One check indicates rent to another business.

An Internet search finds that the daycare company owner has previous government-issued violations for safety and classroom size needs, such as not having enough chairs and tables per enrollee. These violations were issued to a different daycare name.

Simultaneous to this investigation, another analyst sends an email about negative news articles referencing local child/adult daycare companies misusing governmental grants. This prompts the financial institution (Fl) to search all businesses for names containing daycare' or care*. Text searches return a number of facilities as customers at the Fl and detects that three of these businesses have a similar transaction flow of high volume government ACH funding with little to no daycare expenses.

The analyst determines that site visits should be conducted for the three daycare businesses. Which observations at the on-site visits would justify writing a SAR/STR? (Select Three.)



Answer : A, C, F

The observations at the on-site visits that would justify writing a SAR/STR are signs of severe wear and poor maintenance at the site (A), lights turned off at the site during operational hours , and a full parking lot of cars with no staff at the site (F). These observations suggest that the daycare businesses are not operating legitimately or providing adequate services to their customers, and that they may be misusing governmental grants or laundering money through their accounts. These observations are consistent with some of the red flags for fraud identified by ACAMS2, such as:

Inadequate facilities or equipment for the type of business

Lack of visible activity or customers at the business location

Discrepancy between reported income and expenses

Unusual volume or frequency of transactions

The other observations are not as relevant or indicative of fraud as options A, C, and F. A site located in a commercial building (B) could be a normal or legitimate choice for a daycare business, depending on its size, location, and availability. Visible attendance with children being dropped off by parents (D) could show that the daycare business is providing genuine services to its customers, although it does not rule out possible fraud or money laundering. Visible signage indicating the purpose of building (E) could also show that the daycare business is transparent and legitimate, although it does not guarantee its quality or compliance.


Question 7

A financial regulator is evaluating the effectiveness of a financial institution's (Fl) anti-financial crime program. Which condition should be met to satisfy the regulator?



Answer : D

The condition that should be met to satisfy the regulator is that the program is drafted using a risk-based approach to avoid the FI being used as a conduit for criminal activities. A risk-based approach means that the FI identifies, assesses, and understands its exposure to financial crime risks and applies appropriate measures to mitigate them. This is consistent with the international standards and best practices for anti-financial crime compliance. The program being aligned with the financial industry's anti-financial crime priorities, meeting the minimum requirements of anti-financial crime standards published by a financial industry association, or having no high-severity issues in internal auditing results are not sufficient to satisfy the regulator, as they do not necessarily reflect the specific risks faced by the FI or demonstrate its effectiveness in preventing and detecting financial crimes.


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Total 101 questions