CAMS · Question #547
An alert has been triggered by a monitoring system and an investigation has been opened. The activity involves significant and multiple cash deposits into a personal account and transferring funds…
The correct answer is D. File a suspicious transaction report with the competent authority. The activity described in the question raises several red flags for money laundering, such as large and frequent cash deposits, transfers to offshore jurisdictions, and involvement of a charitable organization that could be a front for illicit funds. The Compliance Officer…
Question
An alert has been triggered by a monitoring system and an investigation has been opened. The activity involves significant and multiple cash deposits into a personal account and transferring funds to an offshore bank on the same day. Further investigation reveals this personal account had experienced low levels of activity for the past 6 months and funds are transferred to the account of a charitable organization. Which of the following is the next step that the Compliance Officer should take?
Options
- AProhibit further transactions with the charitable organization.
- BConduct enhanced due diligence on the charity's trustees.
- CPlace the charitable organization on the bank's internal "watchlist."
- DFile a suspicious transaction report with the competent authority.
How the community answered
(24 responses)- A4% (1)
- B13% (3)
- C8% (2)
- D75% (18)
Explanation
The activity described in the question raises several red flags for money laundering, such as large and frequent cash deposits, transfers to offshore jurisdictions, and involvement of a charitable organization that could be a front for illicit funds. The Compliance Officer should file a suspicious transaction report (STR) with the competent authority, such as the Financial Intelligence Unit (FIU), as soon as possible, and provide all the relevant information and documentation to support the suspicion. Filing an STR is a legal obligation for financial institutions and does not require the consent or notification of the customer. The Compliance Officer should also follow the bank's internal policies and procedures for handling such cases, which may include freezing the account, conducting further investigation, or escalating the matter to senior management.
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