A bank employee recently opened an account for a new restaurant. Daily cash deposits over a three-month period are close to $9,500. What are two red flags that indicate possible money laundering or…

The correct answer is B. The daily cash deposits are so close in amount D. The new account demonstrates a steady flow of income. These two options are potential red flags for money laundering or terrorist financing because they could indicate an attempt to avoid the reporting threshold of $10,000 for cash transactions, or to conceal the source or origin of the funds. According to the ACAMS Study Guide…

Risks and Methods of Money Laundering and Terrorist Financing

Question

A bank employee recently opened an account for a new restaurant. Daily cash deposits over a three-month period are close to $9,500. What are two red flags that indicate possible money laundering or terrorist financing? (Choose two.)

Options

AThe restaurant is located in a different city
BThe daily cash deposits are so close in amount
CIt is a new account that has daily cash deposits
DThe new account demonstrates a steady flow of income

How the community answered

(38 responses)

A
16% (6)
B
76% (29)
C
8% (3)

Explanation

These two options are potential red flags for money laundering or terrorist financing because they could indicate an attempt to avoid the reporting threshold of $10,000 for cash transactions, or to conceal the source or origin of the funds. According to the ACAMS Study Guide, some common indicators of money laundering are: Transactions structured to avoid recordkeeping or reporting requirements Transactions inconsistent with the customer's profile or business activity Transactions involving the use of multiple accounts or locations Transactions involving high-risk jurisdictions or entities Transactions involving cash or complex crypto assets

Topics

#red flags#cash-intensive business#structuring#new account

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