AML quiz chapter 1 With 88 questions and answers RATED A+ 2025/2026

AML quiz chapter 1 With 88 questions and
answers RATED A+ 2025/2026
What is money laundering? - Correct Answers Claiming illegal funds as a legitimate business
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transaction
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Il` Who oversees money laundering? - Correct Answers federal regulations like the USA PATRIOT
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Il` What is AML mean? - Correct Answers AML refers collectively to laws, policies, and company
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Il` programs intended to deter and detect money laundering.Il` Il` Il` Il` Il` Il` Il`




Il` The first stage in the money laundering process is called? - Correct Answers placement
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Il` What does placement mean? - Correct Answers brings the illicit cash into the legal financial
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Il` system



Il` What is structuring? - Correct Answers the practice of breaking up large cash transactions into
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Il` multiple smaller transactions (for the purpose of evading reporting or recordkeeping
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Il` requirements



Il` What is the 2nd step of money laundering? - Correct Answers Layering
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Il` What is layering? - Correct Answers cash equivalents obtained in the placement stage are used
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Il` to purchase a variety of financial instruments
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Il` What are some examples of sophisticated financial products - Correct Answers can include cash
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Il` value life insurance and deferred annuity contracts.
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,Il` What is the 3rd and final step in money laundering? - Correct Answers Integration
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Il` What is integration? - Correct Answers cleansed money is circulated back into the hands of the
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Il` criminal and ultimately into the financial system Il` Il` Il` Il` Il` Il`




Il` Cash value life insurance and deferred annuity contracts provide owners access to funds through?
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Il` - Correct Answers policy loans, partial withdrawals, or outright surrenders
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Il` What laundering technique looks appealing to those who launder because it avoids surrender
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Il` charges? - Correct Answers Free-look surrenders Il` Il` Il` Il` Il` Il` Il` Il` Il`




Il` Tom and Raul case study - Correct Answers Tom wrote a $500,000 universal life insurance policy.
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Il` wrote large cash value policies not only on Raul but also on Raul's business associates and
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Il` personal friends. A common denominator with every case was the buyer's interest in the policy's
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Il` living benefits. There were frequent withdrawals and partial surrenders, and several policies had
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Il` been canceled during the free-look period. Raul and his associates, agents for an international
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Il` drug cartel, were responsible for laundering the millions of dollars generated annually from
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Il` cocaine and heroin buyers in the U.S. and Europe
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Il` Tom and Dru - Correct Answers Raul made substantial donations to the cultural center, mostly
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Il` through wire transfers from off-shore bank accounts owned by obscurely named business
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Il` entities.There the funds were available to clients with international connections. Il` Il` Il` Il` Il` Il` Il` Il` Il`




The money laundering operation set up by Raul and his associates followed the standard three-
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stage process characteristic of most money laundering schemes. - Correct Answers Placement
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occurred when the cash was deposited into off-shore bank accounts, where it was subsequently
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wired to Tom's insurance company to pay premiums.
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, Layering was achieved through buying multiple life insurance and deferred annuity contracts
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using cash payments and wire transfers from uncertain sources. Ownership changes helped cover
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any audit trail.
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Integration occurred through partial surrenders and withdrawals in the form of insurance
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company checks, which moved the money back into the legal monetary system.
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Il` Operation Capstone involved the efforts of whom - Correct Answers the action involved the
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Il` coordinated efforts of the U.S. Customs Service, the U.S. Attorney for the Southern District of
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Il` Florida, and several police departments in South Florida, as well as British and South American
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Il` authorities.



Il` Operation Capstone - Correct Answers revealed that owners were heavily funding their policies
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Il` just shy of MEC levels to avoid IRS scrutiny and making early withdrawals to access the cleansed
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Il` money within. . Changes in policy ownership were common.
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Il` What are some ways to money launder? - Correct Answers A money launderer could purchase a
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Il` life insurance policy and then cancel the policy during the free-look period to receive a refund of
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Il` the premium. The returned premium is used to purchase other assets or investments, thus
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Il` adding layers to the process and further integrating the money into the financial system.
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A money launderer could purchase a life insurance policy and then use the policy values as
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collateral for a loan to buy a piece of real estate. The loan is repaid by surrendering the policy, and
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the launderer now owns property that can be retained or sold at a later date.
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A money launderer could use illicit funds to purchase life insurance policies from terminally ill
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insureds under viatical settlement agreements, naming an off-shore company or group of foreign
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investors as beneficiaries of the policies. When the insureds die, the proceeds are paid to the
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company or the investors as legitimate death benefits.
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Il` What is The law most impacting insurance companies? - Correct Answers USA PATRIOT Act,
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