A New York-based lawyer is interested in purchasing a luxury condo in Manhattan listed at $30 million for a client based in the Caribbean.
The client does not want to be named on the deed and wants the purchase to be made under the name of a limited liability company (LLC). The client states that the reason for this arrangement is that he is a high level government official who is concerned about his privacy if the purchase were to be made in his name.
The funds for the purchase are to be wired from several accounts in various countries.
Which two facts lead to gathering more information about this potential client before moving forward with the transaction? (Choose two.)
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A. B. C. D.CD
In the given scenario, there are two facts that should lead to gathering more information about the potential client before proceeding with the transaction. These two facts are:
The use of an LLC to make the purchase: The client wants the luxury condo to be purchased under the name of a limited liability company (LLC) instead of being directly purchased in their own name. The use of an LLC can be a red flag for potential money laundering activities or attempts to conceal the true ownership of the property. By using an LLC, the client can maintain anonymity and make it difficult to trace the true source of the funds used for the purchase. Therefore, this fact raises concerns about the potential client's intentions and the need for further investigation.
The funds are coming from several accounts in various countries: The funds for the purchase are stated to be wired from multiple accounts in different countries. This raises suspicions of international transactions and the potential use of complex financial structures to obscure the origin of the funds. Money laundering often involves the movement of funds through multiple accounts and jurisdictions to disguise their illicit origins. In this case, the involvement of various accounts in different countries further highlights the need for due diligence and gathering more information about the potential client to ensure compliance with anti-money laundering (AML) regulations.
It's important to note that while the other options (A and C) may also provide relevant information, they do not directly relate to the potential risks associated with money laundering or the concealment of the property's true ownership. Therefore, options A (The client is from a Caribbean country) and C (The client is a high level government official) may be relevant for other considerations, such as assessing the client's political exposure or jurisdiction-specific risks, but they do not directly address the primary concerns of money laundering or the use of complex financial structures.