Question 91 of 440 from exam CAMS: Certified Anti-Money Laundering Specialist
Question
The anti-money laundering compliance officer for a small money transmitter has several agent locations in the same geographic area in the United States. The customers are immigrants from Country A and the majority of the funds are remitted to Country A.
In a meeting with one of the agents, it is recently discovered that two new customers have been coming in three times a week and sending funds to the same recipient in Country B. Each cash transaction always totals exactly $8,000.
What should alert the agent to possible money laundering activity by the two customers?
Answers
Explanations
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A. B. C. D.A
In the scenario presented, the anti-money laundering compliance officer for a small money transmitter has several agent locations in the same geographic area in the United States. The customers are immigrants from Country A and the majority of the funds are remitted to Country A. During a meeting with one of the agents, it is discovered that two new customers have been coming in three times a week and sending funds to the same recipient in Country B. Each cash transaction always totals exactly $8,000.
The question asks what should alert the agent to possible money laundering activity by the two customers. The correct answer is D. Each of their transactions is just below the cash reporting threshold.
The cash reporting threshold is a requirement under the Bank Secrecy Act (BSA) for financial institutions to report transactions involving currency in excess of $10,000. In the scenario presented, each transaction is just below this threshold, which could be an indication of structuring. Structuring is a common method used by money launderers to avoid triggering the currency transaction reporting requirements by breaking up large transactions into smaller ones.
The fact that the two customers have been coming in three times a week is also a red flag, but not as significant as the fact that each transaction is just below the cash reporting threshold. While it is unusual for customers to remit funds to Country B, this alone is not enough to raise suspicion. Similarly, the fact that they remit funds to the same person is not necessarily indicative of money laundering activity.
It is important to note that this scenario alone may not be enough to definitively conclude that money laundering is taking place. It is possible that the two customers have a legitimate reason for sending funds to the same recipient in Country B and for structuring their transactions just below the cash reporting threshold. However, the agent should still file a suspicious activity report (SAR) with the Financial Crimes Enforcement Network (FinCEN) to report the suspicious activity and let the authorities investigate further.
