CrFA Money Laundering & Asset Tracing 3

Question 1

Under the Egmont Group framework, Financial Intelligence Units (FIUs) are primarily responsible for:

Accepted Answer

Receiving, analyzing, and disseminating financial intelligence to combat money laundering and terrorist financing

Answer

Prosecuting money laundering offenses in member nations

Answer

Setting international AML regulatory standards

Answer

Auditing the financial statements of multinational corporations

Question 2

In the context of money laundering investigations, 'tipping off' refers to:

Accepted Answer

Alerting a customer that they are under investigation or that a SAR has been filed

Answer

Providing anonymous tips about suspicious activity to authorities

Answer

Reporting a colleague's misconduct to a supervisor

Answer

Disclosing confidential client information during litigation

Question 3

Which of the following best describes 'cuckoo smurfing'?

Accepted Answer

Embedding illegal funds within legitimate wire transfers sent to an unsuspecting account holder

Answer

Using multiple individuals to make small deposits below reporting thresholds

Answer

Creating fraudulent invoices to disguise money transfers as trade payments

Answer

Using cryptocurrency mixers to anonymize blockchain transactions

Question 4

When a forensic accountant discovers that a subject has converted cash into casino chips and then cashed them out as 'winnings,' this technique is known as:

Accepted Answer

Casino laundering

Answer

Integration through commingling

Answer

Placement through negotiable instruments

Answer

Layering through conversion

Question 5

The FATF (Financial Action Task Force) 40 Recommendations primarily serve as:

Accepted Answer

International standards for combating money laundering, terrorist financing, and proliferation financing

Answer

Binding international law enforceable in all member states

Answer

Audit standards for forensic accountants conducting AML investigations

Answer

A ranking system for countries based on their level of corruption

Question 6

A forensic accountant is tracing funds through a series of cryptocurrency transactions. Which technique is most useful for analyzing blockchain-based money flows?

Accepted Answer

Blockchain analytics using transaction graph analysis to identify clusters and wallet addresses

Answer

Net worth analysis comparing on-chain and off-chain assets

Answer

Applying the 'first in, first out' (FIFO) cost basis method

Answer

Reviewing exchange-issued 1099 forms for all wallet holders

Question 7

Which of the following scenarios most clearly illustrates the 'integration' stage of money laundering?

Accepted Answer

A criminal uses proceeds from offshore accounts to purchase a legitimate hotel chain

Answer

A drug trafficker deposits $9,000 in cash at three different banks on the same day

Answer

A launderer wire transfers funds through five shell companies in different countries

Answer

A fraudster converts stolen funds into prepaid debit cards