CHCP Wire Transfer & Fraud Prevention 4

Question 1

Under federal law, a Suspicious Activity Report (SAR) filed with FinCEN must remain confidential. What is the consequence of disclosing that a SAR has been filed?

Accepted Answer

Criminal penalties including fines and imprisonment under the Bank Secrecy Act

Answer

Disclosing the existence or contents of a SAR ('tipping off') is a federal crime under the BSA, punishable by significant fines and up to five years in prison.

Question 2

A closing professional notices a cash buyer is using multiple cashier's checks in amounts just below $10,000 to fund a purchase. This pattern is known as:

Accepted Answer

Structuring (smurfing)

Answer

Structuring, also called smurfing, involves deliberately breaking transactions into sub-$10,000 amounts to avoid the federal Currency Transaction Report (CTR) filing requirement.

Question 3

What is a 'dual control' procedure in the context of wire transfer security?

Accepted Answer

Requiring two separate authorized individuals to initiate and approve a wire transfer

Answer

Dual control requires one person to initiate a wire and a second authorized person to approve it, reducing the risk of unauthorized or fraudulent transfers.

Question 4

FIRPTA withholding in a real estate closing is primarily designed to prevent which type of financial crime or tax issue?

Accepted Answer

Tax evasion by foreign sellers failing to report U.S. capital gains

Answer

FIRPTA requires buyers to withhold a percentage of the sale price from foreign sellers and remit it to the IRS to ensure U.S. capital gains taxes on the sale are collected.

Question 5

Which element is NOT typically required in a valid domestic wire transfer instruction set provided to a buyer?

Accepted Answer

SWIFT/BIC code

Answer

SWIFT/BIC codes are required for international wire transfers but are not needed for domestic U.S. wire transfers, which use ABA routing numbers instead.

(CHCP) Certified Home Closing Professional Practice Test

(CHCP) Certified Home Closing Professional Practice Test

CHCP Wire Transfer & Fraud Prevention 4