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CAMS > Module 1 (Part 2) > Flashcards

Module 1 (Part 2) Flashcards

1
Q

What is area in non bank financial institutions that can be used to launder money

A

credit card industry

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2
Q

what do credit card associations do

A

license member banks to issue bankcards, authorize merchants to accept those cards, or both

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3
Q

what are issuing banks

A

they solicit potential customers and issue the credit cards

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4
Q

what are acquiring banks

A

they process transactions for merchants who accept credit cards

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5
Q

what are TPPP

A

they contract with issuing or acquiring banks to provide payment processing services to merchants and other business entities,

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6
Q

what do they typically do

A

initiate transactions on behalf of merchant clients that do not have a direct relationship with the TPPPs financial institution

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7
Q

Are credit card accounts likely to be used in the initial placement stage of money laundering

A

no

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8
Q

why

A

because the industry generally restricts cash payments

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9
Q

what are they more likely to be used in

A

the layering or integration stages

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10
Q

what are the second part listed of NBFIs

A

TPPP

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11
Q

what are TPPPs

A

bank customers that provide payment-processing services to merchants and other business entities and often use their commercial bank accounts to conduct payment processing for their merchant clients

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12
Q

what are they often times NOT subject to

A

AML/CFT requirements

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13
Q

What is the third NBFI area covered

A

MSBs

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14
Q

what is a MSB

A

transmits or converts currencies

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15
Q

what services do they usually provide

A

currency exchange

money transmission

check cashing

money order services

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16
Q

What is a foreign exchange dealer

A

these MSBs deal in foreign exchange (forex) and provide currency exchange services

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17
Q

who may offer check cashing services

A

check cashing services may be offered by retail businesses or stand-alone operation (Primary vs. Ancillary)

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18
Q

What is the issuer or of traveler’s check or money order responsible for

A

the payment of the item

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19
Q

what do they often use to sell the negotiable items

A

agents

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20
Q

what is a money transmitter

A

accept currency or funds for the purpose of transferring those funds electronically through a financial agency, institution, or electronic funds transfer network

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21
Q

what is a prepaid provider

A

arrange for access to funds or to the value of funds that have been paid in advance and can be retrieved or transferred at some point in the future through an electronic device or vehicle

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22
Q

what are examples of that electronic device or vehicle

A

card

code

electronic serial number

mobile ID number

PIN

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23
Q

What are the two types of prepaid access

A

Open Loop

Closed Loop

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24
Q

what can open loop prepaid cards be used for

A

purchases at any merchant that accepts cards issued for use on the payment network associated with the card and to access cash at any ATM that connects to the affiliated ATM network

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25
Q

What are closed loop prepaid cars typically limited to

A

buying goods or services from the merchant issuing the card

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26
Q

What is the next NBFI

A

Casinos

27
Q

Why are casinos good for money laundering

A

they are among the most proficient cash-generating businesses

28
Q

when does money laundering through casinos generally occur

A

Placement and layering stage

29
Q

what is an example

A

converting the illicit funds from cash to checks and utilizing casino credit to add a layer of transactions before the funds are ultimately transferred out

30
Q

What is also present regarding casinos/that industry that aids in money laundering

A

online gambling

31
Q

what are the 3 reasons that online gambling provides an excellent method of money laundering for cyber criminals

A
  1. Transactions are conducted principally through credit or debit cards
  2. Site operators are typically unregulated offshore firms
  3. Tracing the source of ownership illegal money that moves through these accounts can be difficult for enforcement and regulatory agencies
32
Q

in july of 2015 what report did FATF release

A

Money Laundering/Terrorist financing risks and vulnerabilities associated with gold

33
Q

What are the first 3 of 6 vulnerabilities associated with gold

A
  1. High intrinsic value in a relatively compact and easy to transport form
  2. Can be bought and sold easily and often with anonymity for currency in most areas of the world.
  3. More readily accepted than precious stones, especially since it can be melted down into many different forms
34
Q

What are the second 3 of 6 vulnerabilities associated with gold

A
  1. holds its value regardless of the form it takes - whether as bullion or as a finished piece of jewelry
  2. often sought after as a way of facilitating transfer of wealth
  3. For some societies, carries an important cultural or religious significance that adds to its demand
35
Q

in a 2013 typology report, what did FATF state

A

the functions provided by lawyers, notaries, accountants and other professionals are the most useful to a potential money launder

36
Q

what are the 5 concepts listed for the functions that these professionals can cover

A
  1. Managing complex legal arrangements
  2. Buying or selling property
  3. Performing Financial transactions
  4. Providing financial and tax advice
  5. Other gate keeper functions
37
Q

What is the deal with managing complex legal arrangements

A

such arrangements may serve to obscure the links between the proceeds of a crime and the perpetrator

38
Q

what about buying and selling property

A

property transfers serve as either the cover for transfers of illegal funds (layering stage) or the final investment of proceeds after they pass through the initial laundering process stage (integration stage)

39
Q

what about performing financial transactions

A

sometimes these professionals may carry out various financial operations on behalf of the client

40
Q

what are 3 other gatekeeper functions

A

providing introductions to financial institutions

undertaking certain litigation

setting up and managing a charity

41
Q

What is a relatively uncomplicated method of money laundering

A

real estate

42
Q

how does it work in the placement and layering phases

A

large sums of criminal proceeds may be integrated into the legitimate economy through real estate investments

43
Q

what about the integration phase

A

properties may be sold for a profit or retained for residential, investment or vacation purposes

44
Q

what do many real estate transactions involve that facilitates ML

A

deposit of a large check from the mortgagee, as well as checks and cash required from the buyer at closing

45
Q

what are the 4 listed methods listed for Money laundering in real estate transactions

A

Escrow accounts

reverse flip

loan back

all cash

46
Q

what are escrow accounts

A

designed to hold funds entrusted to someone for protection and proper disbursement

47
Q

why are they attractive to Money launderers

A

because of the large number of diverse transactions that can pass through them in any deal

48
Q

what can escrow accounts facilitate

A

the movement of funds by cashier’s checks, wire transfers or company checks to seemingly legitimate individuals or companies

49
Q

what is reverse flip

A

a money laundering might find a cooperative property seller who agrees to a reported purchase price well below the actual value of the property and then accepts the difference under the table

50
Q

what is loan back

A

the criminal provides an associate with a specific amount of illegitimate money.

the associate then provides a “Loan or mortgage” back to the criminal for the same amount with all the necessary “loan and/or mortgage” documentation

51
Q

what does this create

A

an illusion that the trafficker’s funds are legitimate

52
Q

how is the scheme reinforced

A

through legitimately scheduled payments made on the loan by the traffickers

53
Q

What is all cash

A

refers to transactions that do not involve traditional financing and doe snot necessarily reference the use of physical cash

54
Q

what is trade based money laundering

A

the process of disguising the proceeds of crime and moving value through the use of trade transactions in an attempt to legitimize their illicit origins.

55
Q

how can this be achieved in practice

A

through the misrepresentation of the price, quantity, or quality of imports or exports

56
Q

What are the 6 ways to execute trade-based money laundering

A
  1. Over invoicing or under invoicing
  2. Over shipping or short shipping
  3. Ghost Shipping
  4. Shell companies
  5. Multiple invoicing
  6. Black market trades
57
Q

What is over invoicing

A

by invoicing the goods or service at a price above the fair market price, the seller is able to receive value from the buyer

58
Q

what is under invoicing

A

by invoicing the goods or service at a price below the fair market price, the seller is able to transfer value to the buyer

59
Q

What is overshipping or short shipping

A

the difference in the invoiced quantity of goods and the quantity of goods that are shipped whereby the buyer or seller gains excess value based on the payment made

60
Q

what is ghost shipping

A

fictitious trades where a buyer and seller collude to prepare all the documentation indicating goods were sold, shipped and payments were made, but no goods were actually shipped

61
Q

how are shell companies used

A

to reduce the transparency of ownership in the transaction

62
Q

what is multiple invoicing

A

numerous invoices are issued for the same shipment of goods, thus allowing the money launderer the opportunity to make numerous payments and justify them with the invoices

63
Q

what are black market trades commonly referred to

A

commonly referred to as the black market peso exchange

64
Q

what occurs during this

A

the domestic transfer of funds is used to pay for goods by a foreign importer

CAMS (19 decks)

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