Bank Secrecy Act & SAR Filing Flashcards

A financial institution discovers suspicious activity on day 1, identifies a suspect on day 15, but fails to file a SAR until day 50. Has the institution violated BSA filing requirements?

Answer: Yes, because once a suspect is identified the 30-day clock applies from initial detection

The 60-day extension only applies when no suspect has been identified; once a suspect is known, the standard 30-day deadline from initial detection applies.

Under BSA regulations, which of the following businesses is classified as a Money Services Business (MSB) and subject to BSA requirements?

Answer: A check cashing service processing over $1,000 per day

Check cashers that conduct more than $1,000 in transactions per person per day are classified as MSBs and must comply with BSA AML program requirements.

A fraud examiner is reviewing a case where a real estate agent facilitated purchases of high-value properties using shell companies with no clear source of funds. This is most indicative of which laundering stage?

Answer: Integration

Purchasing real estate with laundered funds through shell companies represents integration, the final stage where illicit funds are converted into legitimate assets.

FinCEN's Geographic Targeting Orders (GTOs) are primarily used to:

Answer: Require additional reporting in specific geographic areas or industries to combat money laundering

GTOs allow FinCEN to impose enhanced BSA requirements in specific geographic areas or sectors, such as requiring identification for all-cash real estate transactions.

A bank exempts a retail grocery chain from CTR filing under the BSA. This type of exemption is called a:

Answer: Phase I exemption

Phase I exemptions under the BSA apply to well-known businesses like banks, government entities, and listed public companies, while Phase II exemptions cover other eligible non-listed businesses.

Which of the following best describes the purpose of the Bank Secrecy Act's 'know your customer' (KYC) requirements?

Answer: To enable financial institutions to identify, assess, and mitigate money laundering and terrorist financing risks

KYC requirements under the BSA are designed to help financial institutions understand their customers' risk profiles and detect suspicious activity consistent with money laundering or terrorist financing.

A fraud examiner finds that a cryptocurrency exchange failed to register as an MSB and did not file any SARs. Under the BSA, what criminal penalty can an individual face for willfully failing to maintain a required AML program?

Answer: Up to 5 years imprisonment and $250,000 fine

Willful failure to establish a required AML program under the BSA can result in criminal penalties of up to 5 years in prison and fines up to $250,000 per violation.