CFE Money Laundering 3

Question 1

Which analytical technique involves tracing the flow of funds from the point of origin through all transactions to identify the ultimate destination?

Accepted Answer

Follow-the-money analysis

Answer

Net worth method

Answer

Source and application of funds method

Answer

Indirect proof method

Question 2

The term 'beneficial owner' in AML compliance refers to:

Accepted Answer

The natural person who ultimately owns or controls a legal entity or account

Answer

The registered agent of a corporation

Answer

The trustee of a legal trust arrangement

Answer

The compliance officer responsible for AML oversight

Question 3

Which of the following best describes 'trade-based money laundering' (TBML)?

Accepted Answer

Laundering money through over- or under-invoicing of goods and services in international trade

Answer

Using cryptocurrency exchanges to launder money internationally

Answer

Moving cash physically across borders in commercial freight

Answer

Using stock market trades to layer criminal proceeds

Question 4

When a fraud examiner detects a pattern where large cash deposits are made just below reporting thresholds over multiple days at different branches, the most likely violation is:

Accepted Answer

Structuring under 31 U.S.C. § 5324

Answer

Tax evasion under IRC Section 61

Answer

Wire fraud under 18 U.S.C. § 1343

Answer

Securities fraud under the Securities Exchange Act

Question 5

Real estate is often used as a money laundering vehicle because:

Accepted Answer

Large amounts of money can be absorbed, and properties can be resold to generate seemingly legitimate proceeds

Answer

Real estate transactions are always publicly disclosed to law enforcement

Answer

Real estate agents are required to report all transactions to FinCEN

Answer

Property values are highly regulated and cannot be manipulated

Question 6

Which of the following is the primary purpose of a risk-based approach (RBA) in AML compliance programs?

Accepted Answer

To allocate compliance resources proportionally to the level of money laundering risk posed by customers and products

Answer

To eliminate all risk of money laundering at a financial institution

Answer

To ensure all customers are treated identically regardless of transaction volume

Answer

To automate all AML monitoring without human review

Question 7

In a money laundering investigation, the 'net worth method' is used to:

Accepted Answer

Establish unreported income by comparing increases in net worth to known legitimate income

Answer

Calculate a suspect's estimated taxes owed to the IRS

Answer

Determine the fair market value of seized assets

Answer

Compute the total loss to victim organizations