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NEW QUESTION # 71
You work for a bank that is subject to U.S. sanctions overseen by the Office of Foreign Assets Control (OFAC). In the past your institution has had difficulty keeping the Specially Designated Nationals (SDN) lists up-to-date.
Which is the recommended course of action when dealing with transactions from a sanctioned country through your bank?
- A. Call Ihe OFAC to submit the blocking and reject reports
- B. Submit blocking and reject reports to the OFAC in writing
- C. Ignore the SDN lists because they appear to be out-of-date again
- D. Open the account and then contact the OFAC about blocking transactions
Answer: B
NEW QUESTION # 72
Ms. Rodriguez, the compliance officer at XYZ Bank, is reviewing the bank's sanctions screening process.
She notices that the screening system has a high rate of false positives, leading to delays in processing transactions. What is the most effective approach for Ms. Rodriguez to improve the efficiency of the sanctions screening process?
- A. Disable the sanctions screening system to eliminate false positives altogether.
- B. Increase the threshold for triggering sanctions alerts to reduce the number of false positives.
- C. Implement manual review procedures for all transactions flagged as potential matches.
- D. Enhance the screening system with advanced technologies such as machine learning and artificial intelligence.
Answer: D
NEW QUESTION # 73
A fully qualified mortgage applicant submits an offer to purchase an investment properly through the seller's agent conditional on obtaining financing within 72 hours. The purchaser provides accurate and verifiable documentation to support the acquisition and servicing of the debt but the purchase price of the properly appears to be higher than what you would consider fair market value. You suspect that the customer is involved in a real estate investment scheme that is dependent upon an inflated properly value.
- A. The mortgage broker
- B. The sellers agent
- C. The Lille attorney
- D. The lender
Answer: B
NEW QUESTION # 74
Phillips Importers LLC. is a shell company owned by Jon Phillips Mr. Phillips is very active in his local church He has convinced a large number of individuals from his church to invest in the Phillips Fund, which guarantees 10% returns.He lakes the money he collects and puts itina bank account for Phillips Importers LLC. He uses that money to market the Phillips Fund to new investors, print statements, pay dividends to his investors and pay some of his personal expenses.
Which types of fraud isMr.Phillips committing? Choose 2 answers
- A. Market manipulation
- B. Affinity fraud
- C. Pyramid scheme
- D. Ponzi scheme
Answer: B,D
NEW QUESTION # 75
Mr. Smith, the compliance manager of ABC Bank, is tasked with conducting a risk assessment of the institution's correspondent banking relationships. Which of the following factors should Mr. Smith consider when assessing the risks associated with correspondent banking?
- A. The number of transactions processed through correspondent accounts.
- B. The size of transactions conducted by correspondent banks.
- C. The total assets of ABC Bank.
- D. The geographical location of correspondent banks' headquarters.
Answer: A
NEW QUESTION # 76
Joe Brown a new small business owner wants lo open a new business account at Mega Bank. He Sils down with a bank officer who is very friendly and asks about his new business and his family Joe becomes uncomfortable about sharing so much information about himself with a stranger. He expresses his concern and the bank officer tells him that this information is required for anyone opening a newaccount with Mega Bank and that every other bank is going to ask him the same questions.
Assuming it is a low-risk customer which information does a bank need to collect and then verify from a new account holder?
- A. Financial documents on Joe's income and source of funds
- B. Joe's previous employment information and income
- C. Number of employees expected transactions and types of expenses
- D. Business name industry address tax identification number and corporate documents
Answer: D
NEW QUESTION # 77
Jane is a dual citizen of the United Stales and Country B a known lax haven, she has permanently relocated to Country B The lax authorities in the U.S. and Country B have a well-established cooperation agreement to reduce tax evasion.
Upon relocating in Country B she legally changed her name and obtained government identification in Country B's official language. She used this new identification to establish bank accounts in Country B. She created new shell companies and opened new business ventures which generated millions of dollars of income for her.
Jane files proper tax returns in Country B and discontinues filing U.S. income tax returns. Which statement is true?
- A. She broke U.S. tax laws by not notifying the institutions of her name change when opening new bank accounts in Country B
- B. As a dual citizen she is responsible for filing tax returns in both the U.S. and Country B until she renounces her U.S. citizenship
- C. Considering she permanently moved to Country B she is only responsible for filing tax returns in Country B
- D. She broke Country B's tax laws by changing her name prior to opening new accounts since Country B now cannot match her records with the U.S. tax authorities
Answer: B
NEW QUESTION # 78
A U.S. citizen opens an account in an offshore bank in a country that has a bilateral Model II FATCA agreement with an initial deposit of $10,000. USD Over the course of time the kinds in the account exceed
$60,000 USD.
Which obligation under FATCA applies?
- A. None the bank may accept Ihe deposited funds and is under no further obligation than to follow applicable local law
- B. The bank is required to report U.S. account holders to the U.S. Internal Revenue Service
- C. The bank would be subject to a mandatory withholding tax on income Irom U S financial assets it holds
- D. The bank is requiredtofile a Suspicious Activity Report or Suspicious Transaction Report (SAR or STR)
Answer: B
NEW QUESTION # 79
You work in financial crime compliance for a money services business (MSB) with an international network of agents whose core business is handling remittance transactions. As part of your periodic update to your risk assessment you are reviewing payment corridors and customer types.
Which payment corridor is MOST likely to present the highest risk?
- A. Payments by seasonal agricultural workers from Canada to the Caribbean
- B. Payments by domestic workers from theUnitedArab Emirates to the Philippines
- C. Payments by temporary visa holders in the tech industry from countries in the European Union to India
- D. Payments by small business owners from the US to Yemen
Answer: D
NEW QUESTION # 80
A law enforcement agent is pursuing an asset recovery case against a defendant accused of running a multimillion-dollar securities fraud scam. The defendant is thought to have moved more than $25 million through a corporate brokerage account held by a corporation formed in Las Vegas. Nevada.
It is believed that funds were sent to accounts held by shell companies in the Netherlands and the Bahamas. It is also suspected that the defendant purchased luxury goods including several high-end sports cars with proceeds of the fraud. The vehicles are registered and tilled to a trust company with a mailing address that is a post office box in Delaware. The agent is attempting to connect the vehicles to the defendant to make the case that they should be seized.
Which item below would BEST support this effort?
- A. Records of outgoing funds transfers from the accounts of the shell companies in the Netherlands and Bahamas
- B. Records of incoming funds transfers received by the corporate brokerage account held by the Nevada corporation
- C. An invoice from the shipping company for the cars that is addressed to the defendant
- D. Contact information for a registered agent acting as trustee of the trust company that holds the vehicle titles
Answer: C
NEW QUESTION # 81
Mr. Patel, the head of compliance at a financial institution, is considering the use of technology to enhance sanctions compliance. Which of the following technological solutions would be most beneficial for improving the institution's sanctions screening process?
- A. Implementing artificial intelligence (AI) algorithms to automatically approve low-risk transactions.
- B. Utilizing blockchain technology to track and verify the identity of counterparties in real-time.
- C. Deploying biometric authentication systems to verify the identity of customers during transactions.
- D. Integrating machine learning algorithms to enhance the accuracy of sanctions screening systems.
Answer: D
NEW QUESTION # 82
A large banking institution retains a collections law firm to determine if a $25 million default on a commercial loan is fraud. The attorneys need to determine if the defaulting parly is worth pursuing in civil litigation by first determining if the defaulting entity and/or individual committed fraud by intentionally defaulting.
Which is an indicator or a red flag that the defaulting party could be committing fraud?
- A. The loan IS collateralized by accounts receivable
- B. The payments toward the loan have been delinquent many times over several years of maintaining Ihe loan
- C. A history of bankruptcies is found relating to the defaulting entity or individual
- D. The individual or entity involved in the default loan maintains numerous holding companies
Answer: C
NEW QUESTION # 83
A prosecutor in Country X needs to obtain the legally admissible testimony of Person A who resides in the United States, related to an ongoing criminal investigation Person A is incapable ol traveling and will only provide testimony if compelled by a court order in the U.S. There is no bilateral or multilateral treaty or convention that facilitates mutual legal assistance between these two countries.
Which should the prosecutor submit to obtain the testimony of Person A?
- A. A request for a production order
- B. A Letters Rogatory request
- C. A request for a litigation hold
- D. A Mutual Legal Assistance Treaty request
Answer: B
NEW QUESTION # 84
Which activity would likely be involved in the integration stage ofmoney laundering?
- A. Wiringlandsto off-shore banks
- B. Buying or selling properly by a shell company
- C. Transferring funds between multiple shell corporations
- D. Depositing international money orders
Answer: B
NEW QUESTION # 85
A credit card company has recently become aware that fraudsters are obtaining multiple cards using stolen or synthetic identities II is now reviewing its card application process to identify potential weaknesses.
Which two elements in the company's application process are potential weaknesses? Choose 2 answers
- A. The company verifies customer contact information using only the information from a customer's credit report
- B. The company calls the applicant to verify contact information il area codes for home, cell, and office phone numbers do not match the address on the application
- C. The company treats credit card applications from all channels (online mail unsolicited etc) the same and subjects them to the same review process
- D. Applications from geographic areas where high instances of credit card fraud have been reported in the past are subjected to a more detailed review
Answer: A,C
NEW QUESTION # 86
During a risk assessment of its trade finance operations, XYZ Bank identifies a high volume of transactions involving shell companies with obscure ownership structures. What is the most appropriate action for XYZ Bank to take in response to this finding?
- A. Conduct enhanced due diligence on transactions involving shell companies.
- B. Ignore the issue as long as the transactions are compliant with regulatory requirements.
- C. Seek approval from senior management to continue trade finance operations.
- D. Immediately terminate all trade finance operations involving shell companies.
Answer: A
NEW QUESTION # 87
You are in charge of network security for a national financial institution. Despite your best efforts you have suffered a major data breach due to overseas hackers. You are now tasked with reacting to that breach.
Which action should you take immediately?
- A. Terminate all external connections to devices that hold sensitive customer data
- B. Deploy a new set of proxy firewalls to your intranet
- C. Reconfigure all of your access devices lo refuse connections for any IP address that is international
- D. Identify the sensitivity of the data and level of impact on the organization
Answer: A
NEW QUESTION # 88
Mr. X is a business consultant who specializes in helping European companies expand their operations into Latin America. You are part of a law enforcement unit investigating Mr. X who is under suspicion of assisting his clients to conceal bribe payments made to government officials in Latin American countries.
Mr. X is knowntocontrol a numberofdifferent companies andtheirrelated subsidiaries within severalLamAmerican countries. You are tracing (fundsthat originated from an account held by one of Mr.X's companies in the UK in an effort to establish that he is involved in the corruption and money laundering scheme.
Which would provide the BEST indicatorThatMr.X is helping to launder funds connected to bribery?
- A. Funds whose source can be traced to a corporate account in a country located in the European Union
- B. Funds transferred to business associates of Mr.X located in the European Union
- C. Funds transferred into the account from a nondescript business with little information available about it
- D. Funds that are being used in the operation of a business in ahigh-riskjurisdiction
Answer: C
NEW QUESTION # 89
During a review of its compliance program, XYZ Bank discovers that it has processed transactions involving individuals and entities on the Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) list. What is the most appropriate action for XYZ Bank to take?
- A. Implement enhanced due diligence procedures for transactions involving high-risk countries.
- B. Conduct a retrospective review of transactions to assess the extent of potential violations.
- C. Immediately report the findings to OFAC and await further instructions.
- D. Suspend all transactions until the individuals and entities are removed from the SDN list.
Answer: C
NEW QUESTION # 90
You are an examiner with Ihe regulatory agency in your jurisdiction that oversees money services businesses (MSBs).
You are conducting an examination of a midsize MSB with agents located domestically and in several countries. A previous examination last year found numerous weaknesses in Ihe MSB s anti-money laundering and fraud prevention programs, and you are reviewing these programs to determine if improvements have been made.
Which activity would MOST likely lead your agency to lake further regulatory action against the MSB?
- A. The MSB has suspended agents found to be facilitating fraud schemes and allowed them to rejoin as a new company
- B. The MSB's suspicious activity/transaction report (SAR/STR) filings related to cybercrime have increased in the past year
- C. The MSB is not applying FATCA's withholding tax to its domestic money transactions
- D. The MSB has not updated the AML training it provides to its agents in almost four months
Answer: A
NEW QUESTION # 91
In your job as an analyst with a securities regulator you are reviewing the movement and volatility in penny stocks. As part of your daily work, you review reports and you encounter this chart in the chart the dotted line represents the closing price and the bars represent average daily volume.
Which type of securities fraud should you begin investigating?
- A. Insider trading
- B. Market manipulation
- C. Front running
- D. Cherry picking
Answer: B
NEW QUESTION # 92
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