Treasury Enforcement Agent Exam Financial Crimes & Money Laundering Detection 2

Question 1

Under the USA PATRIOT Act, financial institutions are required to implement Customer Identification Programs (CIP) to verify the identity of customers opening new accounts.
This requirement falls under which section?

Accepted Answer

Section 326

Answer

Section 311

Answer

Section 314

Answer

Section 352

Question 2

Which term describes the final stage of money laundering where illegal funds are reintroduced into the legitimate economy?

Accepted Answer

Integration

Answer

Placement

Answer

Layering

Answer

Consolidation

Question 3

A Treasury Enforcement Agent suspects that a business owner is depositing cash just under $10,000 repeatedly to avoid CTR requirements. This is known as:

Accepted Answer

Structuring

Answer

Money laundering

Answer

Embezzlement

Answer

Wire fraud

Question 4

Which of the following is a red flag indicator of potential trade-based money laundering?

Accepted Answer

Significant over- or under-invoicing of goods

Answer

Timely payment of invoices

Answer

Use of letters of credit

Answer

Multiple currency conversions

Question 5

What is the purpose of OFAC's SDN (Specially Designated Nationals) list?

Accepted Answer

To list individuals and entities whose assets US persons are prohibited from dealing with

Answer

To identify high-net-worth individuals for tax auditing

Answer

To track foreign diplomats with tax obligations in the US

Answer

To identify licensed money service businesses

Question 6

Hawala is best described as:

Accepted Answer

An informal value transfer system operating outside traditional banking

Answer

A type of cryptocurrency exchange

Answer

A formal bank wire transfer system used in the Middle East

Answer

A Treasury-regulated money services business