FBI Financial Crimes and Money Laundering Flashcards

What is asset forfeiture in the context of federal financial crime investigations?

Answer: The legal process by which the government seizes and takes ownership of assets connected to criminal activity

Asset forfeiture is the legal process through which the government seizes property connected to criminal activity; it deprives criminals of the proceeds of their crimes and tools used to commit them.

What is the key legal distinction between civil asset forfeiture and criminal asset forfeiture?

Answer: Civil forfeiture is an action against the property itself and does not require a criminal conviction; criminal forfeiture requires a conviction

Civil asset forfeiture is an in rem action taken against the property itself and does not require a criminal conviction against the owner, while criminal asset forfeiture is an in personam action that requires a criminal conviction as a prerequisite.

What does the investigative principle of 'follow the money' mean in FBI financial crime cases?

Answer: Tracing financial transactions to uncover the full scope of criminal networks, co-conspirators, and hidden assets

The 'follow the money' approach traces financial transactions both backward and forward from known criminal activity to expose the full scope of criminal enterprises, identify key players, and locate hidden assets subject to forfeiture.

What is a 'money mule' and how are they typically recruited?

Answer: A person who transfers illegally obtained money on behalf of criminals, often recruited through fake job offers or romance scams

Money mules transfer stolen or illegally obtained funds on behalf of criminals; they are often recruited through convincing but fraudulent work-from-home job offers, online romance relationships, or lottery scams, sometimes without fully understanding their criminal role.

What 'Know Your Customer' (KYC) obligations did the USA PATRIOT Act strengthen for financial institutions following September 11, 2001?

Answer: Requirements to verify customer identities, understand business relationships, and maintain robust anti-money laundering programs

The USA PATRIOT Act strengthened KYC requirements by mandating that financial institutions verify customer identities, understand the nature of their business relationships, and maintain comprehensive AML programs to detect both money laundering and terrorist financing.

What is the Egmont Group and why is it relevant to FBI international financial crime investigations?

Answer: An international network of Financial Intelligence Units that facilitates secure exchange of financial intelligence across over 160 countries

The Egmont Group is an international network of over 160 national Financial Intelligence Units (FIUs) that enables the secure, reciprocal exchange of financial intelligence to combat transnational money laundering and terrorist financing.

What is the fundamental legal distinction between tax evasion and tax avoidance that FBI agents must understand when investigating financial crimes?

Answer: Tax evasion is the illegal, intentional failure to pay taxes owed; tax avoidance is the legal minimization of tax liability through legitimate means

Tax evasion is the intentional illegal non-payment or underpayment of taxes and is a federal crime prosecuted jointly by the FBI and IRS Criminal Investigation, while tax avoidance is the legal reduction of tax liability using permitted deductions, credits, and strategies.