Suspicious Activity Reporting Flashcards
6 cards from real CAMS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Suspicious Activity Reporting flashcards as text
What is 'structuring' as defined under the Bank Secrecy Act?
Answer: Breaking up transactions specifically to evade the $10,000 CTR reporting threshold, which is itself a federal crime
Structuring (or 'smurfing') involves deliberately breaking cash transactions into smaller amounts — typically below $10,000 — to avoid triggering a Currency Transaction Report, and is itself a federal crime under 31 U.S.C. § 5324.
What is a 'continuing SAR' and when is it appropriate?
Answer: A SAR filed at 90-day intervals while suspicious activity by the same subject continues, after the initial SAR has been filed
After an initial SAR is filed, if the suspicious activity continues, institutions should file continuing SARs every 90 days until the activity ceases, maintaining the law enforcement alert.
Which of the following would NOT typically be included in the narrative of a well-written SAR?
Answer: The institution's opinion on whether the subject is guilty of money laundering
SAR narratives should document facts (who, what, when, where, how) and explain why activity is suspicious, but should avoid legal conclusions or opinions about guilt, as that determination is for law enforcement.
What is 'layering' in the three stages of money laundering?
Answer: The process of conducting complex transactions to distance funds from their criminal origin
Layering is the second stage of money laundering, involving complex financial transactions designed to obscure the audit trail and distance the funds from their criminal source — often through wire transfers, currency conversions, or shell companies.
When is a financial institution NOT required to file a SAR even if it suspects illegal activity?
Answer: When the transaction is below $5,000 and involves an unknown customer
For most financial institutions, SAR filing is only required when transactions meet or exceed minimum dollar thresholds ($5,000 for banks), so transactions below this threshold involving unknown suspects may not trigger a mandatory filing obligation.
What is meant by 'integration' in the context of money laundering?
Answer: The final stage where laundered funds re-enter the legitimate economy appearing as lawful income or assets
Integration is the third and final stage of money laundering, where criminals reintroduce the now-disguised funds into the legitimate economy through investments, real estate purchases, or business operations.