Professional Documents
Culture Documents
MF 1
MF 1
A.
Loss of income
B.
C.
Employee turnover
D.
Customer Dissatisfaction
Correct Answer
B. Negative impact to our communities and our country
Explanation
Money laundering poses a major risk of negatively impacting our communities and country.
This illegal practice involves disguising the origins of illicit funds and integrating them into
the legitimate financial system. By doing so, money launderers can facilitate various criminal
activities, such as drug trafficking, corruption, and terrorism. The consequences of money
laundering include increased crime rates, erosion of trust in financial institutions, and
economic instability. Additionally, the funds generated through money laundering can be
used to finance illegal activities that harm communities and undermine the security and
development of a country.
2.
A.
$ 8,000 or more
B.
$ 1,000 or more
C.
D.
Correct Answer
D. More than $ 10,000
Explanation
A Currency Transaction Report (CTR) is a form that financial institutions must file with the
Financial Crimes Enforcement Network (FinCEN) for any transaction involving more than
$10,000 in cash. This requirement is part of the Bank Secrecy Act (BSA) and is aimed at
detecting and preventing money laundering and other illegal activities. By reporting large
cash transactions, the government can track and investigate suspicious financial activities and
ensure compliance with anti-money laundering regulations. Therefore, any transaction
exceeding $10,000 in dollar amount triggers the filing of a CTR.
3.
A.
B.
Cash Transaction
C.
D.
Correct Answer
A. Customer who is reluctant to provide ID
Explanation
A customer who is reluctant to provide ID can be a red flag of suspicious activity because it
suggests that the customer may be trying to hide their identity or engage in illegal activities.
The reluctance to provide identification raises concerns about the legitimacy of their
intentions and may indicate that they are involved in fraudulent or illicit transactions. This
behavior is often associated with money laundering, identity theft, or other criminal activities,
making it an important red flag to be cautious of.
4.
A.
B.
C.
D.
Correct Answer
C. Transaction that is $ 2,000 or more and suspicious
Explanation
A SAR form is a Suspicious Activity Report form that is used to report transactions that are
suspicious and meet certain criteria. The correct answer states that any transaction that is
$2,000 or more and suspicious must be reported on a SAR form. This means that any
transaction meeting these criteria, regardless of the specific amount, must be reported. The
answer does not specify a maximum amount, indicating that any transaction meeting the
dollar amount threshold and being deemed suspicious should be reported.
5.
A.
B.
C.
D.
Correct Answer
D. 30 days from the date that suspicious transaction was detected
Explanation
The correct answer is 30 days from the date that suspicious transaction was detected. This is
the deadline for submitting a Suspicious Activity Report (SAR) on a suspicious transaction. It
allows sufficient time for financial institutions to investigate and gather necessary
information before reporting to the appropriate authorities.
6.
A.
B.
C.
D.
A.
B.
C.
D.
Correct Answer
A. Money order sales over $ 3,000
Explanation
Money order sales over $3,000 must be recorded on the money order log because it is
important to keep a record of high-value transactions for financial and security purposes. This
helps in tracking and monitoring the flow of money and prevents any fraudulent activities.
Recording these transactions also ensures transparency and accountability in the financial
system.
8.
What form would the agent most likely file if a customer makes multiple cash
transfers of $ 9,000 each per day over a period of several days?
A.
CTR
B.
SAR
C.
CMIR
D.
Police report
Correct Answer
B. SAR
Explanation
If a customer makes multiple cash transfers of $9,000 each per day over a period of several
days, the agent would most likely file a Suspicious Activity Report (SAR). SARs are filed by
financial institutions to report suspicious transactions that may indicate potential money
laundering or other illegal activities. In this case, the repeated cash transfers of the same
amount could be seen as an attempt to avoid triggering reporting requirements, which would
raise suspicions and warrant the filing of a SAR.
9.
You should only report suspicious transaction conducted by customers you do
not know. You do not need to report suspicious transaction of a regular
customer you know.
A.
True
B.
False
Correct Answer
B. False
Explanation
This statement is false because it is important to report any suspicious transactions, regardless
of whether the customer is known or not. Reporting suspicious transactions helps to prevent
illegal activities such as money laundering or fraud. Even if a customer is considered a
regular and trusted customer, it is still necessary to report any transactions that appear
suspicious or out of the ordinary. Failing to report such transactions could potentially enable
criminal activities to go unnoticed and unchecked.
10.
During the period of one business day a customer pays with cash for separate
wire transfers in the fallowing amounts: $ 1,500, $ 2,000, $ 3,000 and $ 4,000.
You are required to file a CTR.
A.
True
B.
False
Correct Answer
A. True
Explanation
The customer paying with cash for separate wire transfers in amounts of $1,500, $2,000,
$3,000, and $4,000 within one business day exceeds the threshold amount set for Currency
Transaction Reports (CTRs). A CTR is required to be filed for any cash transaction
exceeding $10,000 in a single business day. Therefore, the statement "True" is correct.
11.
A.
True
B.
False
Correct Answer
A. True
Explanation
Financial institutions, such as check cashers, are required to file Currency Transaction
Reports (CTRs) for any transactions involving currency that exceed $10,000. This regulation
helps to prevent money laundering and other illegal activities by monitoring large cash
transactions. By reporting these transactions, financial institutions contribute to the overall
integrity of the financial system and assist law enforcement agencies in their efforts to
combat financial crimes. Therefore, the statement is true.
12.
A.
True
B.
False
Correct Answer
B. False
Explanation
False. The correct answer is false because according to the Bank Secrecy Act (BSA),
financial institutions are prohibited from notifying a customer that a Suspicious Activity
Report (SAR) has been filed. This is to ensure the integrity and confidentiality of the SAR
process and to prevent potential tipping off of suspicious individuals.
A.
True
B.
False
Correct Answer
A. True
Explanation
When a customer engages in a suspicious transaction involving $12,000 in cash, it is required
to file a Suspicious Activity Report (SAR) as per anti-money laundering regulations.
Additionally, a Currency Transaction Report (CTR) must also be filed for any cash
transactions exceeding $10,000. Therefore, in this scenario, both a SAR and a CTR need to
be filed, making the statement "True" correct.
14.
A.
True
B.
False
Correct Answer
A. True
Explanation
When a customer cashes a business check of $11,000, it triggers the requirement to file a
Currency Transaction Report (CTR). A CTR is a form that financial institutions use to report
any cash transactions exceeding $10,000 in a single day. This is a legal requirement under the
Bank Secrecy Act (BSA) to prevent money laundering and other illegal activities. Therefore,
the statement "True" indicates that filing a CTR is necessary in this situation.
15.
A.
True
B.
False
Correct Answer
B. False
Explanation
The correct answer is False. The scenario described does not meet the criteria for filing a
Currency Transaction Report (CTR). A CTR is required when a customer conducts a cash
transaction of $10,000 or more in a single day. In this case, although the customer cashes a
$6,000 business check, the subsequent payment of $5,000 in cash for a wire transfer does not
bring the total to $10,000 or more. Therefore, a CTR is not required in this situation.
16.
“Structuring” or the intentional breaking up of a large transaction into
smaller transactions to avoid currency reporting record keeping requirements
is illegal.
A.
True
B.
False
Correct Answer
A. True
Explanation
The explanation for the given correct answer is that intentionally breaking up a large
transaction into smaller transactions to avoid currency reporting record keeping requirements
is considered as "structuring" and it is indeed illegal. This practice is often used to evade
detection and scrutiny by authorities, and it is against the law as it undermines the
transparency and integrity of financial transactions.
17.
A customer pays with cash for a $ 3,800 money order; you are not required to
obtain any information from this customer.
A.
True
B.
False
Correct Answer
B. False
Explanation
The statement is false because when a customer pays with cash for a $3,800 money order, it
is necessary to obtain information from the customer. This is because money orders are
typically used for larger transactions and involve a higher risk of fraud or money laundering.
Therefore, it is important to collect identifying information from the customer, such as their
name, address, and contact details, to ensure the legitimacy of the transaction and comply
with anti-money laundering regulations.
18.
A customer pays with cash for $ 3,800 wire transfer; you are not required to
obtain any information from this customer
A.
True
B.
False
Correct Answer
B. False
Explanation
False. As a financial institution, it is necessary to obtain information from customers who are
making wire transfers, regardless of the payment method. This information is required for
compliance with anti-money laundering (AML) and know your customer (KYC) regulations.
The customer's identification and relevant details should be collected to ensure the legitimacy
of the transaction and to mitigate the risk of illegal activities such as money laundering or
terrorist financing.
19.
A.
B.
C.
D.
Correct Answer
B. 15 days of the transaction
Explanation
A Currency Transaction Report must be submitted to the IRS within 15 days of the
transaction. This report is required for any cash transaction that exceeds $10,000 in a single
business day. It helps the IRS monitor and prevent money laundering and other illegal
activities. The 15-day timeframe allows for timely reporting and ensures that the IRS has
accurate and up-to-date information on large cash transactions.