Financial Crimes & Money Laundering Detection Flashcards

Which of the following best defines 'beneficial ownership' in the context of anti-money laundering regulations?

Answer: The individual(s) who ultimately own or control a legal entity

Beneficial ownership refers to the natural person(s) who ultimately own or exercise control over a legal entity, which FinCEN's CDD rule requires financial institutions to identify.

A Suspicious Activity Report (SAR) filed with FinCEN must generally be submitted within how many days of detecting suspicious activity?

Answer: 30 days

Financial institutions must file a SAR within 30 days of detecting suspicious activity, or 60 days if no suspect can be identified.

Which federal statute specifically criminalizes engaging in financial transactions with proceeds from specified unlawful activities?

Answer: 18 U.S.C. § 1956 (Money Laundering Statute)

18 U.S.C. § 1956 is the federal money laundering statute that criminalizes financial transactions involving proceeds from specified unlawful activities.

What is the primary purpose of a Currency and Monetary Instruments Report (CMIR)?

Answer: To declare cash or monetary instruments over $10,000 when entering or leaving the US

A CMIR (FinCEN Form 105) must be filed when transporting more than $10,000 in currency or monetary instruments into or out of the United States.

In a money laundering investigation, which type of analysis involves tracing the flow of funds through multiple accounts and transactions?

Answer: Link analysis

Link analysis is used to trace the flow of funds by mapping connections between accounts, entities, and transactions in a money laundering scheme.

Real estate transactions are vulnerable to money laundering primarily because:

Answer: They can be used to park large sums and generate apparently legitimate income

Real estate allows criminals to invest large amounts of illicit funds, potentially obscure ownership, and generate seemingly legitimate rental income or capital gains.