Chapter 8 Section 5: Money Laundering Flashcards
Define money laundering
Criminal practice of processing ill-gotten gains or dirty money through a series of transactions so the gains appear to be proceeds from legal activities
What are the three steps to money laundering?
Placement - putting dirty money into the system
Layering - move funds around to make it difficult to follow
Integration - moving money into legit-looking transactions
What is the Bank Secrecy Act?
One of the primary tools to fight money laundering.
What’s FinCEN?
Financial Crimes Enforcement Network
It administers the BSA by issuing regulations and guidance, supporting the examination functions of banking agencies, and pursuing civil enforcement actions
What are federal banking agencies?
Responsible for the oversight of banking entities. Includes National Credit Union Administration, Office of Comptroller of Currency, FDIC
Who is required to submit reports to the gov’t?
All financial institutions and some people.
Report transactions of more than $10,000 within 15 days
When does the suspicious activity report need to be filed?
Within 30 days report suspicious transactions. You should know your customer’s deposit activities well enough to recognize what is out of the ordinary.
Who needs to be notified of SAR filings?
Who mustn’t?
The board
The suspect
What are the record keeping requirements?
Maintain records for five years for the identity of people purchasing monetary instruments between $3,000 and $10,000
Who is surprisingly included in financial institutions?
Pawn shops and car dealerships
What are the money-laundering penalties?
Criminal, civil, and others
