CAMS Money Laundering Typologies and Methods 2

Question 1

What is a 'loan-back' scheme in money laundering?

Accepted Answer

A scheme where criminals 'lend' themselves their own illicit funds and repay the loan with seemingly legitimate funds

Answer

In a loan-back scheme, the launderer deposits illicit funds offshore, then borrows against those funds, creating a paper trail that makes repayments appear to be legitimate loan obligations.

Question 2

Cuckoo smurfing is best described as:

Accepted Answer

Substituting criminal funds for legitimate funds expected in international transfers without the recipient's knowledge

Answer

In cuckoo smurfing, a criminal's funds are deposited into an account of a person expecting a legitimate international transfer, replacing those funds — the account holder is unaware their account is being used.

Question 3

Which of the following is the clearest example of the 'placement' stage of money laundering?

Accepted Answer

Depositing cash proceeds from narcotics sales at multiple bank branches below CTR thresholds

Answer

Depositing drug sales proceeds at banks constitutes placement — the first, most risky stage where cash enters the formal financial system.

Question 4

What does the 'layering' stage of money laundering primarily aim to achieve?

Accepted Answer

To obscure the audit trail and distance the funds from their criminal origin through complex transactions

Answer

Layering uses multiple, complex transactions — wire transfers, currency conversions, shell company movements — to create confusion and distance funds from their source.

Question 5

The Hawala system of value transfer is best described as:

Accepted Answer

An informal value transfer system based on trust and a network of brokers without physical movement of funds

Answer

Hawala operates through brokers (hawaladars) who settle debts through trust and offsetting credits rather than actual fund transfers, making it difficult to trace and regulate.

CAMS - Certified Anti-Money Laundering Specialist Certification Practice Test

CAMS - Certified Anti-Money Laundering Specialist Certification Practice Test

CAMS Money Laundering Typologies and Methods 2