CAFCA EXAM 2024 UPDATE CERTIFIED STUDY
RESOURCES [MOST TESTED QUESTIONS]
COMPLETE QUESTIONS AND VERIFIED ANSWERS
GRADE A+
B - In general, the three phases of money laundering are said to be: Placement:
A. Structuring and manipulation.
B. Layering and integration.
C. Layering and smur ng.
D. Integration and in ltration.
A - Which of the following is the most common method of laundering money through a
legal money services business?
A. Purchasing structured money instruments.
B. Smuggling bulk-cash.
C. Transferring funds through Payable Through Accounts (PTAs).
D. Exchanging Colombian pesos on the black market.
A - Which statement is true?
A. Bust-out schemes are popular in creating large bankruptcy frauds where businesses
secure increasing loans in excess of the actual value of the company or property and
then run with the money, leaving the lender to foreclose and take a substantial loss.
B. Cuckoo smur ng is a signi cant money laundering technique identi ed by the
Financial Action Task Force, where a form of structuring uses nested accounts with
shell banks in secrecy havens.
C. In its 40 Recommendations, the FATF issued a list of "designated categories of
offense" that asserts crimes for a money laundering prosecution.
D. E-cash is not attractive to the money launderer because it cannot be completely
anonymous and does not allow for large amounts to be "transported" quickly and easily.
BCD - Which three of the following is an indication of possible money laundering in an
insurance industry scenario?
A. Insurance products sold through intermediaries, agents or brokers.
B. Single-premium insurance bonds, redeemed at a discount.
C. Policyholders who are unconcerned about penalties for early cancellation.
D. Policyholders who make full use of the "free look" period.
,AC - Which two activities are typically associated with the black market peso exchange
(BMPE) money laundering system?
A. Converting illicit drug proceeds from dollars or Euros to Colombian pesos.
B. Converting illicit drug proceeds from Colombian pesos to dollars or Euros.
C. Facilitating purchases by Colombian importers of goods manufactured in the United
States or Europe through peso brokers.
D. Facilitating purchases by European or U.S. importers of goods manufactured in
Colombia through peso brokers.
D - What is the Right of Reciprocity in the eld of international cooperation against
money laundering?
A. The legal principle that nancial institutions that have referred customers to other
nancial institutions can share information about these customers with the other
institutions.
B. A rule of the Basel Committee allowing properly regulated nancial institutes of
another member state of the Basel Committee to do business without additional
supervision to the degree that the other state grants the same right.
C. The right of each FATF member country to delegate prosecution of a case of money
laundering to another member that is already investigating the same case.
D. A rule in the law of a country allowing its authorities to cooperate with authorities of
other countries to the degree that their law allows them to do the same.
C - The greatest risk for money laundering is for casinos that
A. Provide their customers with a wide array of gambling services.
B. Operate in a non-Egmont member country.
C. Allow customers with credit balances to withdraw funds by check in another
jurisdiction.
D. Only send suspicious transaction reports to the nancial intelligence unit of the
country it operates in.
B - Which statement is true regarding the risk of Politically Exposed Persons (PEPs)?
A. PEPs provide access to third parties on whom the nancial institution has not
conducted suf cient due diligence.
B. PEPs have signi cantly greater exposure to the politically corrupt funds, including
accepting bribes or misappropriating government funds.
C. PEPs are foreign customers who inherently present additional risk as they are
engaged in cross-border transactions.
D. PEPs generally do not pose enhanced risks to an institution due to their political
standing; rather, PEPs increase the prestige of an institution.
B - Dirty money, derived from criminal activities of
Belgian Criminal A, is sent to a foreign bank account
of Corporation B. Then in Belgium, a new investment Company C is incorporated.
Criminal A is appointed as a director of Company C. Company C borrows money from
the foreign Company B and buys real estate in Belgium. The real estate is rented to
,third parties. Director (Criminal) A also rents an apartment in the building. With the
funds generated by the rent, Company C pays off
the loan to Corporation B, and the salary of Director A. Criminal A now converted his
dirty money in legal funds. This laundering method is commonly referred to as what?
A. Offsetting real estate transactions.
B. Loan back.
C. Cuckoo smur ng.
D. Loan manipulation.
ACD - A new customer approaches a bank to open a commercial account. The
customer provides an address for the account located across the city from the branch.
When asked by the account representative if the customer requires any additional
banking services, the customer responds she is also interested in opening a personal
investment account. The account representative refers the customer to their broker-
dealer. The customer tells the rm representative she has never had a brokerage
account before and has a few questions about how an investment account works. The
customer asks how deposits can be made into her account, if there are any reporting
requirements, and how to go about moving balances out of the account using wire
transfers. No questions are asked about fees associated with these transactions. Which
three items would be considered suspicious?
A. The customer asks many questions about the brokerage account, but none of them
are related to investing.
B. The customer is opening a commercial account and at the same time a personal
investment account.
C. The address of the account holder and the branch where the customer came to open
the account are not close to each other.
D. That the customer appears unconcerned about the fees.
C - The USA PATRIOT Act was passed in:
A) 1970
B) 1985
C) 2001
D) 2007
D - The three stages of money laundering are:
A) Layering, Placement, Refining
B) Placement, Refining, Integration
C) Refining. Integration, Layering
, D) Integration, Layering, Placement
D - Which of the following would be satisfactory elements of an Anti-Money Laundering
Program?
I - A CAMS certified employee in the Investigations Unit writes up a few policies and
procedures and posts them on the department bulletin board.
II - Shortly after attaining their CAMS certification, the individual provides AML training
to the Investigations Unit.
III - The CAMS certified individual routinely reviews the work of the Investigations Unit.
IV - The CAMS certified individual assumes the responsibility of a compliance
watchdog.
A) All of the above would be satisfactory
B) II and IV would be satisfactory
C) I and III would be satisfactory
D) None of the above would be satisfactory
The correct answer would be "D - None of the above would be satisfactory."
I - The AML program must be approved by the Board of Directors.
RESOURCES [MOST TESTED QUESTIONS]
COMPLETE QUESTIONS AND VERIFIED ANSWERS
GRADE A+
B - In general, the three phases of money laundering are said to be: Placement:
A. Structuring and manipulation.
B. Layering and integration.
C. Layering and smur ng.
D. Integration and in ltration.
A - Which of the following is the most common method of laundering money through a
legal money services business?
A. Purchasing structured money instruments.
B. Smuggling bulk-cash.
C. Transferring funds through Payable Through Accounts (PTAs).
D. Exchanging Colombian pesos on the black market.
A - Which statement is true?
A. Bust-out schemes are popular in creating large bankruptcy frauds where businesses
secure increasing loans in excess of the actual value of the company or property and
then run with the money, leaving the lender to foreclose and take a substantial loss.
B. Cuckoo smur ng is a signi cant money laundering technique identi ed by the
Financial Action Task Force, where a form of structuring uses nested accounts with
shell banks in secrecy havens.
C. In its 40 Recommendations, the FATF issued a list of "designated categories of
offense" that asserts crimes for a money laundering prosecution.
D. E-cash is not attractive to the money launderer because it cannot be completely
anonymous and does not allow for large amounts to be "transported" quickly and easily.
BCD - Which three of the following is an indication of possible money laundering in an
insurance industry scenario?
A. Insurance products sold through intermediaries, agents or brokers.
B. Single-premium insurance bonds, redeemed at a discount.
C. Policyholders who are unconcerned about penalties for early cancellation.
D. Policyholders who make full use of the "free look" period.
,AC - Which two activities are typically associated with the black market peso exchange
(BMPE) money laundering system?
A. Converting illicit drug proceeds from dollars or Euros to Colombian pesos.
B. Converting illicit drug proceeds from Colombian pesos to dollars or Euros.
C. Facilitating purchases by Colombian importers of goods manufactured in the United
States or Europe through peso brokers.
D. Facilitating purchases by European or U.S. importers of goods manufactured in
Colombia through peso brokers.
D - What is the Right of Reciprocity in the eld of international cooperation against
money laundering?
A. The legal principle that nancial institutions that have referred customers to other
nancial institutions can share information about these customers with the other
institutions.
B. A rule of the Basel Committee allowing properly regulated nancial institutes of
another member state of the Basel Committee to do business without additional
supervision to the degree that the other state grants the same right.
C. The right of each FATF member country to delegate prosecution of a case of money
laundering to another member that is already investigating the same case.
D. A rule in the law of a country allowing its authorities to cooperate with authorities of
other countries to the degree that their law allows them to do the same.
C - The greatest risk for money laundering is for casinos that
A. Provide their customers with a wide array of gambling services.
B. Operate in a non-Egmont member country.
C. Allow customers with credit balances to withdraw funds by check in another
jurisdiction.
D. Only send suspicious transaction reports to the nancial intelligence unit of the
country it operates in.
B - Which statement is true regarding the risk of Politically Exposed Persons (PEPs)?
A. PEPs provide access to third parties on whom the nancial institution has not
conducted suf cient due diligence.
B. PEPs have signi cantly greater exposure to the politically corrupt funds, including
accepting bribes or misappropriating government funds.
C. PEPs are foreign customers who inherently present additional risk as they are
engaged in cross-border transactions.
D. PEPs generally do not pose enhanced risks to an institution due to their political
standing; rather, PEPs increase the prestige of an institution.
B - Dirty money, derived from criminal activities of
Belgian Criminal A, is sent to a foreign bank account
of Corporation B. Then in Belgium, a new investment Company C is incorporated.
Criminal A is appointed as a director of Company C. Company C borrows money from
the foreign Company B and buys real estate in Belgium. The real estate is rented to
,third parties. Director (Criminal) A also rents an apartment in the building. With the
funds generated by the rent, Company C pays off
the loan to Corporation B, and the salary of Director A. Criminal A now converted his
dirty money in legal funds. This laundering method is commonly referred to as what?
A. Offsetting real estate transactions.
B. Loan back.
C. Cuckoo smur ng.
D. Loan manipulation.
ACD - A new customer approaches a bank to open a commercial account. The
customer provides an address for the account located across the city from the branch.
When asked by the account representative if the customer requires any additional
banking services, the customer responds she is also interested in opening a personal
investment account. The account representative refers the customer to their broker-
dealer. The customer tells the rm representative she has never had a brokerage
account before and has a few questions about how an investment account works. The
customer asks how deposits can be made into her account, if there are any reporting
requirements, and how to go about moving balances out of the account using wire
transfers. No questions are asked about fees associated with these transactions. Which
three items would be considered suspicious?
A. The customer asks many questions about the brokerage account, but none of them
are related to investing.
B. The customer is opening a commercial account and at the same time a personal
investment account.
C. The address of the account holder and the branch where the customer came to open
the account are not close to each other.
D. That the customer appears unconcerned about the fees.
C - The USA PATRIOT Act was passed in:
A) 1970
B) 1985
C) 2001
D) 2007
D - The three stages of money laundering are:
A) Layering, Placement, Refining
B) Placement, Refining, Integration
C) Refining. Integration, Layering
, D) Integration, Layering, Placement
D - Which of the following would be satisfactory elements of an Anti-Money Laundering
Program?
I - A CAMS certified employee in the Investigations Unit writes up a few policies and
procedures and posts them on the department bulletin board.
II - Shortly after attaining their CAMS certification, the individual provides AML training
to the Investigations Unit.
III - The CAMS certified individual routinely reviews the work of the Investigations Unit.
IV - The CAMS certified individual assumes the responsibility of a compliance
watchdog.
A) All of the above would be satisfactory
B) II and IV would be satisfactory
C) I and III would be satisfactory
D) None of the above would be satisfactory
The correct answer would be "D - None of the above would be satisfactory."
I - The AML program must be approved by the Board of Directors.
