OIC Financial Crimes & Fraud Investigation

Question 1

Which federal law requires financial institutions to report cash transactions exceeding $10,000 to help detect money laundering?

Accepted Answer

The Bank Secrecy Act

Answer

The Bank Secrecy Act (BSA) of 1970 mandates that financial institutions report cash transactions over $10,000 via a Currency Transaction Report (CTR) to help identify and deter money laundering.

Question 2

What is 'structuring' in the context of financial crimes?

Accepted Answer

Breaking large cash deposits into smaller ones to avoid reporting thresholds

Answer

Structuring (also called 'smurfing') is the illegal practice of breaking large sums of cash into smaller deposits—typically below $10,000—to evade mandatory Currency Transaction Reporting requirements.

Question 3

What is a Suspicious Activity Report (SAR) used for?

Accepted Answer

Reporting suspected financial crimes to FinCEN

Answer

A SAR is filed by financial institutions with the Financial Crimes Enforcement Network (FinCEN) when they detect transactions that may indicate money laundering, fraud, or other financial crimes.

Question 4

Which of the following best describes money laundering?

Accepted Answer

The process of making illegally obtained funds appear legitimate

Answer

Money laundering is the process by which criminals disguise the origin of illegally obtained money to make it appear as though it came from a legitimate source.

Question 5

During the 'placement' stage of money laundering, what does the criminal typically do?

Accepted Answer

Introduces illegal cash into the financial system

Answer

Placement is the first stage of money laundering where illicit cash is introduced into the financial system, often through bank deposits, currency exchanges, or cash-intensive businesses.

(OIC) Oregon Inspector Certification Practice Test

(OIC) Oregon Inspector Certification Practice Test

OIC Financial Crimes & Fraud Investigation