Treasury Enforcement Agent Exam Financial Crimes & Money Laundering Detection 1 — Questions and Answers
Question 1: Which federal law requires financial institutions to file a Suspicious Activity Report (SAR) when a transaction involves $5,000 or more and is suspected to involve criminal activity?
- Bank Secrecy Act (Correct answer)
- Patriot Act
- Gramm-Leach-Bliley Act
- Foreign Corrupt Practices Act
Correct answer: Bank Secrecy Act
The Bank Secrecy Act (BSA) mandates financial institutions to file SARs for suspicious transactions of $5,000 or more.
Question 2: What is 'smurfing' in the context of financial crimes?
- Using shell companies to hide assets
- Breaking large cash deposits into smaller amounts to avoid reporting thresholds (Correct answer)
- Transferring funds through multiple foreign banks
- Using cryptocurrency to obscure transaction trails
Correct answer: Breaking large cash deposits into smaller amounts to avoid reporting thresholds
Smurfing (structuring) involves breaking large cash sums into smaller deposits below the $10,000 CTR reporting threshold to evade detection.
Question 3: A Currency Transaction Report (CTR) must be filed for cash transactions exceeding which amount?
- $5,000
- $10,000 (Correct answer)
- $25,000
- $50,000
Correct answer: $10,000
Financial institutions must file a CTR with FinCEN for any cash transaction exceeding $10,000 in a single business day.
Question 4: Which stage of money laundering involves disguising the illegal origins of funds by passing them through complex financial transactions?
- Placement
- Layering (Correct answer)
- Integration
- Structuring
Correct answer: Layering
Layering is the second stage of money laundering where funds are moved through complex transactions to obscure their criminal origin.
Question 5: Which agency is primarily responsible for collecting and analyzing financial intelligence to combat money laundering in the US?
- FBI
- FinCEN (Correct answer)
- OFAC
- IRS Criminal Investigation
Correct answer: FinCEN
FinCEN (Financial Crimes Enforcement Network), a bureau of the US Treasury, is the primary US financial intelligence unit for anti-money laundering efforts.
Question 6: What is a 'shell company' as used in financial crime schemes?
- A company that sells only digital products
- A legitimate small business used as a front
- A legal entity with no real operations used to obscure asset ownership (Correct answer)
- A company registered offshore for tax purposes
Correct answer: A legal entity with no real operations used to obscure asset ownership
A shell company is a legal entity with no real business operations, commonly used to conceal the true ownership of assets or funds.
Treasury Enforcement Agent Exam Financial Crimes & Money Laundering Detection 1
Which federal law requires financial institutions to file a Suspicious Activity Report (SAR) when a transaction involves $5,000 or more and is suspected to involve criminal activity?