CAMS · Question #35
A customer living in a high-risk jurisdiction makes frequent, large cash deposits at a bank. The same customer sends small wire transfers to unrelated parties in other high-risk jurisdictions. What…
The correct answer is C. Wire transfers are to high-risk jurisdiction D. Large cash deposits are from a high-risk jurisdiction. Wire transfers to high-risk jurisdictions and large cash deposits from a high-risk jurisdiction are two red flags that may indicate money laundering. These activities suggest that the customer is trying to move funds from or to a country that has weak anti-money laundering…
Question
A customer living in a high-risk jurisdiction makes frequent, large cash deposits at a bank. The same customer sends small wire transfers to unrelated parties in other high-risk jurisdictions. What are two red flags that may indicate money laundering? (Choose two.)
Options
- AThe bank allows cash deposits
- BThe client resides in a high-risk jurisdiction
- CWire transfers are to high-risk jurisdiction
- DLarge cash deposits are from a high-risk jurisdiction
How the community answered
(38 responses)- A11% (4)
- B16% (6)
- C74% (28)
Explanation
Wire transfers to high-risk jurisdictions and large cash deposits from a high-risk jurisdiction are two red flags that may indicate money laundering. These activities suggest that the customer is trying to move funds from or to a country that has weak anti-money laundering (AML) controls, or that is known to be a source or destination of illicit funds. Wire transfers can also be used to obscure the origin or destination of the funds, or to layer transactions through multiple accounts or intermediaries. Large cash deposits can indicate that the customer is trying to avoid the reporting or record-keeping requirements that apply to cash transactions, or that the customer is dealing with proceeds from illegal activities.
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