Which red flag should a compliance officer prioritize first for investigation?

The correct answer is B. Several cross-border transfers are received and immediately wired to another beneficiary.. This is a common red flag of money laundering that involves layering, which is the process of moving funds through multiple accounts or entities to conceal their origin and ownership. Layering often involves cross-border transfers, especially to high-risk jurisdictions, and rapid

Conducting and Responding to Investigations

Question

Options

AA loan is paid off in full with cash after the sale of the vehicle that was used as collateral for the
BSeveral cross-border transfers are received and immediately wired to another beneficiary.
CA customer has 20 monthly transactions that are repetitive but less than $500 USD per
DA convenience store cashes government checks for its customers in amounts less than $1,000

How the community answered

(20 responses)

A
5% (1)
B
75% (15)
C
15% (3)
D
5% (1)

Explanation

This is a common red flag of money laundering that involves layering, which is the process of moving funds through multiple accounts or entities to conceal their origin and ownership. Layering often involves cross-border transfers, especially to high-risk jurisdictions, and rapid movement of funds to avoid detection or tracing. A compliance officer should prioritize this red flag for investigation, as it may indicate a complex money laundering scheme or the financing of terrorism or proliferation.

Topics

#red flags#cross-border transfers#suspicious activity prioritization#layering

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