A branch manager for a small community bank has a new customer who deposits for EUR 50,000 checks into one account. Shortly thereafter, the customer goes to another branch and asks to transfer all…

Question

Options

• AThe customer opened the account with four large checks
• BThe customer goes to a different branch to make this transaction
• CThe customer transfers almost all of the funds out of the account
• DThe customer asks to transfer funds to accounts in three different foreign jurisdictions

• A
  14% (4)
• B
  7% (2)
• C
  3% (1)
• D
  76% (22)

Explanation

One of the red flags for money laundering is "transferring funds to or from foreign countries or jurisdictions that are known to have weak anti-money laundering standards or are considered high-risk for money laundering or terrorist financing" (Module 2, Lesson 3, Part 2). This is also consistent with the suspicious activity report (SAR) criteria, which require financial institutions to report transactions that "involve funds derived from illegal activity or are intended or conducted to hide or disguise funds or assets derived from illegal activity" or "involve the use of the financial institution to facilitate criminal activity" (31 CFR § 1020.320(a)(2)). Therefore, the customer's request to transfer funds to accounts in three different foreign jurisdictions should be the focus of the SAR, as it may indicate an attempt to launder money or finance terrorism.

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