CAMS Exam 2023 Questions and
Answers Complete
What is money laundering?
taking CRIMINAL proceeds and disguising their illegal sources to USE the funds for LEGAL or ILLEGAL acts.
Give an example of the SECOND stage of money laundering.
Layering - Electronically moving funds between countries; moving funds between financial institutions; and converting
cash placed into the system into monetary instruments.
Give an example of the THIRD stage of money laundering.
Integration - Purchasing luxury assets; and investing in business enterprises.
Give an example of the FIRST stage of money laundering.
Placement - Co-mingling ILLEGITIMATE and LEGITIMATE funds; foreign exchange transactions with illegal funds;
and depositing small amounts of cash into multiple accounts.
What does the (Sally Yates - Then-Deputy Attorney General of the Department of Justice) Yates memo say?
It reminds prosecutors that criminal and civil corporate misconduct investigations should also focus on the individuals
who perpetrated the wrongdoing.
What are some indicators of money laundering using electronic funds transfers?
Funds transfers to or from a financial secrecy haven; large, incoming fund transfers from a foreign client with little or
no explanation or apparent reason; and fund transfers that have no apparent link to legitimate business.
What is REMOTE DEPOSIT CAPTURE and what risk is associated with it?
A product offered by banks that allows customers to SCAN A CHECK AND TRANSMIT an electronic image to the
bank FOR DEPOSIT. Associated risks include ENABLING a money launderer to deposit checks without visiting the
bank thus avoiding detection.
What are some of the money laundering RISKS pertaining to the use of Payable Through Accounts (PTAs)?
,Where foreign institutions licensed in offshore centers, each bank having its own supervision; where the respondent
bank (the foreign bank) fails to conduct adequate customer due diligence; and where the sub-account
holders have currency deposit and withdrawal privileges.
What is a money laundering RISK pertaining to the use of CONCENTRATION ACCOUNTS?
The fact that CUSTOMER IDENTIFYING INFORMATION MAY NOT BE INCLUDED, making the audit trail difficult or
impossible to follow.
What is a PEP or Politically Exposed Person, and what is the PRIMARY RISK in dealing with a PEP?
A person who has or has had a prominent government or quasi-public position in a country. The PRIMARY RISK is
that THEIR SOURCE OF FUNDS MAY BE FROM CORRUPTION.
What is structuring?
Taking a large cash deposit and breaking it into smaller amounts deposited into separate banks, accounts or on
separate days to avoid currency transaction reports.
When are CREDIT CARDS most likely used for money laundering and give an example of money laundering using
credit cards?
NOT likely INITIAL PLACEMENT. More LIKELY in LAYERING or INTEGRATION. For EXAMPLE, OVERPAYING on
the BALANCE and THEN ASKING FOR A REFUND. Receiving a check from a reputable company makes the funds
appear legitimate.
What are some of the risks posed by Third-Party Payment Processors (TPPPs)?
Multiple financial institution relationships whereby their suspicious ACTIVITY CANNOT BE Entirely SEEN by one
institution; engaging in ACH transactions from overseas whereby the suspicious TRANSACTIONS GET HIDDEN by
the large number of other transactions they engage in; and the possibility of higher than average return rates
stemming from unauthorized transactions.
What are some ways MONEY SERVICES BUSINESSES can be used for money laundering?
Cashing checks without obtaining adequate proof of identity; failing to file Currency Transaction Reports when
required; and transmitting funds overseas without sufficient due diligence.
What are some of the money laundering risks associated with securities broker-dealers?
Its international nature, speed of transactions, ease of converting holdings into cash without significant loss of
principal; large volume of wires; competitive, commission-driven environment; practice of maintaining securities
accounts in the name of nominees or trusts; and weak AML programs.
What are some red flags associated with casinos and gambling?
, Paying off associated debts in cash just under the reporting requirements; purchasing chips, but engaging in minimal
gambling and then cashing the chips back in; using the gambling house for banking-like financial services, including
wiring funds overseas; betting on both "red" and "black" spaces in roulette; and purchasing chips with cash just under
the reporting requirements.
What were FATF's KEY findings its report on "Money Laundering/Terrorist Financing Risks and Vulnerabilities
Associated With Gold," issued in July, 2015?
It IS RELATIVELY COMPACT AND EASY TO TRANSPORT; it is LUCRATIVE AND HOLDS ITS VALUE regardless
of form.
List ways in which a TRAVEL AGENCY could be used to launder money.
Making expensive purchases and then ASKING FOR A REFUND; purchases made with multiple wires just UNDER
THE REPORTING THRESHOLD; and CREATING FALSE BOOKINGS through tour operator networks to justify
significant payments from foreign travel groups.
Name various ways that a GATEKEEPER - an attorney, notary, accountant or auditor could assist in a money
laundering scheme.
CREATING and MANAGING corporate vehicles or other COMPLEX LEGAL ARRANGEMENTS; buying or selling
property as a COVER for transfers of illegal funds; PERFORMING financial TRANSACTIONS, including making
deposits, withdrawing funds, engaging in foreign exchange operations, buying or selling stock and sending
international wires; and SETTING UP or MANAGING a charity.
What is the primary concern with regard to the use of GATEKEEPERS?
Attorneys, notaries, accountants and auditors CAN BE USED TO ENHANCE SECRECY and keep the beneficial
account owner or transaction hidden.
List reasons why REAL ESTATE can be an attractive method of money laundering, according to the 2015 report by
the Australian Transaction Reports and Analysis Centre (AUSTRAC).
It can be purchased with CASH; the owner can be DISGUISED; it is a relatively STABLE AND RELIABLE investment;
and VALUE CAN BE INCREASED through renovations and improvements.
What are TWO of the most COMMON money laundering techniques involved
with Trade-Based Money Laundering (TBML)?
Over and under invoicing
In summary form, how does the Black Market Peso Exchange (BMPE) work in
laundering money?
Answers Complete
What is money laundering?
taking CRIMINAL proceeds and disguising their illegal sources to USE the funds for LEGAL or ILLEGAL acts.
Give an example of the SECOND stage of money laundering.
Layering - Electronically moving funds between countries; moving funds between financial institutions; and converting
cash placed into the system into monetary instruments.
Give an example of the THIRD stage of money laundering.
Integration - Purchasing luxury assets; and investing in business enterprises.
Give an example of the FIRST stage of money laundering.
Placement - Co-mingling ILLEGITIMATE and LEGITIMATE funds; foreign exchange transactions with illegal funds;
and depositing small amounts of cash into multiple accounts.
What does the (Sally Yates - Then-Deputy Attorney General of the Department of Justice) Yates memo say?
It reminds prosecutors that criminal and civil corporate misconduct investigations should also focus on the individuals
who perpetrated the wrongdoing.
What are some indicators of money laundering using electronic funds transfers?
Funds transfers to or from a financial secrecy haven; large, incoming fund transfers from a foreign client with little or
no explanation or apparent reason; and fund transfers that have no apparent link to legitimate business.
What is REMOTE DEPOSIT CAPTURE and what risk is associated with it?
A product offered by banks that allows customers to SCAN A CHECK AND TRANSMIT an electronic image to the
bank FOR DEPOSIT. Associated risks include ENABLING a money launderer to deposit checks without visiting the
bank thus avoiding detection.
What are some of the money laundering RISKS pertaining to the use of Payable Through Accounts (PTAs)?
,Where foreign institutions licensed in offshore centers, each bank having its own supervision; where the respondent
bank (the foreign bank) fails to conduct adequate customer due diligence; and where the sub-account
holders have currency deposit and withdrawal privileges.
What is a money laundering RISK pertaining to the use of CONCENTRATION ACCOUNTS?
The fact that CUSTOMER IDENTIFYING INFORMATION MAY NOT BE INCLUDED, making the audit trail difficult or
impossible to follow.
What is a PEP or Politically Exposed Person, and what is the PRIMARY RISK in dealing with a PEP?
A person who has or has had a prominent government or quasi-public position in a country. The PRIMARY RISK is
that THEIR SOURCE OF FUNDS MAY BE FROM CORRUPTION.
What is structuring?
Taking a large cash deposit and breaking it into smaller amounts deposited into separate banks, accounts or on
separate days to avoid currency transaction reports.
When are CREDIT CARDS most likely used for money laundering and give an example of money laundering using
credit cards?
NOT likely INITIAL PLACEMENT. More LIKELY in LAYERING or INTEGRATION. For EXAMPLE, OVERPAYING on
the BALANCE and THEN ASKING FOR A REFUND. Receiving a check from a reputable company makes the funds
appear legitimate.
What are some of the risks posed by Third-Party Payment Processors (TPPPs)?
Multiple financial institution relationships whereby their suspicious ACTIVITY CANNOT BE Entirely SEEN by one
institution; engaging in ACH transactions from overseas whereby the suspicious TRANSACTIONS GET HIDDEN by
the large number of other transactions they engage in; and the possibility of higher than average return rates
stemming from unauthorized transactions.
What are some ways MONEY SERVICES BUSINESSES can be used for money laundering?
Cashing checks without obtaining adequate proof of identity; failing to file Currency Transaction Reports when
required; and transmitting funds overseas without sufficient due diligence.
What are some of the money laundering risks associated with securities broker-dealers?
Its international nature, speed of transactions, ease of converting holdings into cash without significant loss of
principal; large volume of wires; competitive, commission-driven environment; practice of maintaining securities
accounts in the name of nominees or trusts; and weak AML programs.
What are some red flags associated with casinos and gambling?
, Paying off associated debts in cash just under the reporting requirements; purchasing chips, but engaging in minimal
gambling and then cashing the chips back in; using the gambling house for banking-like financial services, including
wiring funds overseas; betting on both "red" and "black" spaces in roulette; and purchasing chips with cash just under
the reporting requirements.
What were FATF's KEY findings its report on "Money Laundering/Terrorist Financing Risks and Vulnerabilities
Associated With Gold," issued in July, 2015?
It IS RELATIVELY COMPACT AND EASY TO TRANSPORT; it is LUCRATIVE AND HOLDS ITS VALUE regardless
of form.
List ways in which a TRAVEL AGENCY could be used to launder money.
Making expensive purchases and then ASKING FOR A REFUND; purchases made with multiple wires just UNDER
THE REPORTING THRESHOLD; and CREATING FALSE BOOKINGS through tour operator networks to justify
significant payments from foreign travel groups.
Name various ways that a GATEKEEPER - an attorney, notary, accountant or auditor could assist in a money
laundering scheme.
CREATING and MANAGING corporate vehicles or other COMPLEX LEGAL ARRANGEMENTS; buying or selling
property as a COVER for transfers of illegal funds; PERFORMING financial TRANSACTIONS, including making
deposits, withdrawing funds, engaging in foreign exchange operations, buying or selling stock and sending
international wires; and SETTING UP or MANAGING a charity.
What is the primary concern with regard to the use of GATEKEEPERS?
Attorneys, notaries, accountants and auditors CAN BE USED TO ENHANCE SECRECY and keep the beneficial
account owner or transaction hidden.
List reasons why REAL ESTATE can be an attractive method of money laundering, according to the 2015 report by
the Australian Transaction Reports and Analysis Centre (AUSTRAC).
It can be purchased with CASH; the owner can be DISGUISED; it is a relatively STABLE AND RELIABLE investment;
and VALUE CAN BE INCREASED through renovations and improvements.
What are TWO of the most COMMON money laundering techniques involved
with Trade-Based Money Laundering (TBML)?
Over and under invoicing
In summary form, how does the Black Market Peso Exchange (BMPE) work in
laundering money?
