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Certified Financial Crime Specialist CFCS Exam Practice Dumps
NEW QUESTION # 87
During a sanctions compliance training session, an employee asks about the implications of conducting transactions with individuals or entities on the OFAC Sectoral Sanctions Identifications (SSI) list. What is the most accurate response to the employee's inquiry?
- A. Conducting transactions with individuals or entities on the OFAC SSI list is permissible if the transactions are below a certain monetary threshold.
- B. Conducting transactions with individuals or entities on the OFAC SSI list may result in both regulatory penalties and reputational damage.
- C. Conducting transactions with individuals or entities on the OFAC SSI list is permissible if authorized by senior management.
- D. Conducting transactions with individuals or entities on the OFAC SSI list may result in reputational damage but not regulatory penalties.
Answer: B
NEW QUESTION # 88
An international construction company was bidding on a large contract to redevelop and modernize a hydroelectric power system in a central Asian country. Theprojectwas being administered by an agency in the country's federal government but federal officials directed the company to contact a number of local officials for additional details on the project and its scope The company later wins its bid for the redevelopment contract and completes the protect.
A year later an internal auditor is conducting a routine review of past projects and notices certain irregularities in the bidding process for Ihe power system redevelopment. All of the company's major competitors had been rejected in the first round of bidding despite offering competitive pricing of the other firms considered in later rounds of bidding most were small companies and several were incorporated recently in the country where the project was taking place All of them put in bids that were higher or much lower than the company's winning bid.
The auditor is concerned that these unusual findings may indicate the company won its bid through a corruption scheme involving government officials. Which further finding BEST supports this possibility?
- A. The company s total costs for the project came in at 3% higher than the estimated costssubmittedduringthe bidding process
- B. Officials from the federal agency appeared to have limited contact with the local officials during the bidding process
- C. At least one of the companies that submitted a competing bid appears to be a sole proprietorship incorporated in another country
- D. The company won the bid and then subcontracted work to several of the smaller local firmsthathad also submitted bids
Answer: B
NEW QUESTION # 89
Jose who resides in Country Y wants to send funds to Alicia in Country Z. Jose delivers funds to a merchant in Country Y who, in return gives him a code forauthentication purposes The merchant then instructs a colleague in Country Z to deliver an equivalent amount in the local currency to Alicia upon presentation of the designated code After the remittance the first merchant has a liability to the second Their positions can also be transferred to other intermediaries who can assume and consolidate the initial positions and settle at wholesale or multilateral levels.
Which type of transaction is this?
- A. Hawala
- B. Multi-tiered transaction
- C. Black Market Peso Exchange
- D. Private transfer
Answer: A
NEW QUESTION # 90
Your company acquires new mortgage loans through a network of independent brokers and you have experienced losses attributed to one of your brokers You suspect that the broker did not act alone You are revisiting your institution's policies and procedures to effectively mitigate the risks of collusion.
Which specific task would NOT be effective in mitigating the risk of collusion?
- A. Provide mortgage underwriters and administrative staff with training on how to recognize suspicious transactions
- B. Restrict the use ot property appraisers to those who have been approved by your institution
- C. Ensure that your brokers are subjected to rigorous on-boarding standards
- D. Have the mortgagor provide documentary evidence of employment and income
Answer: A
NEW QUESTION # 91
Phillips Importers LLC. is a shell company owned by Jon Phillips Mr. Phillips is very active in his local church He has convinced a large number of individuals from his church to invest in the Phillips Fund, which guarantees 10% returns.He lakes the money he collects and puts itina bank account for Phillips Importers LLC. He uses that money to market the Phillips Fund to new investors, print statements, pay dividends to his investors and pay some of his personal expenses.
Which types of fraud isMr.Phillips committing? Choose 2 answers
- A. Market manipulation
- B. Affinity fraud
- C. Ponzi scheme
- D. Pyramid scheme
Answer: B,C
NEW QUESTION # 92
A large financial institution provides both analysis and research services and investment management services. An analyst is preparing to publicly release a major report that may impact the stock prices of several large corporations. The analyst has contacted a senior compliance officer saying that one of the institution's traders has requested an advance copy of Ihe report. The analyst believes the report may allow the trader to make trades that will benefit several of his clients. The analyst is asking for advice on how to proceed.
Which course of action should be taken in this scenario?
- A. The trader's request is a breach of ethics requiring disciplinary action The trader could receive penalties including not being allowed to conduct trades on behalf of his clients for several business days
- B. The analyst should share the full report as long as the trader signs a disclosure that he will not trade on his clients' accounts based on this information
- C. The analyst should not provide the full report until it is publicly released through widely accessible channelsatthat point the report can also be shared with traders inside the institution
- D. The analyst should not share the full report However she can request more details on the trader's clients and trading positions and provide limited information tailored to those circumstances
Answer: C
NEW QUESTION # 93
You are an examiner for a financial industry regulator One of your smaller firms has shown a dramatic increase in wire activity that you think may be indicative of them facilitating money laundering. You request their outgoing wire transactionsfor the past six months and they provide you a spreadsheet with nearly 10,000 wires.
Which two criteria would be the MOST effective way to narrow down your sample for investigation? Choose
2 answers
- A. The client(s) with multiple third-party wires to different foreign beneficiaries
- B. The client(s) with multiple wires just below the reporting threshold
- C. The client(s) with an address outside the country where your firm is domiciled
- D. The client(s) with the highest number of foreign wires
Answer: A,B
NEW QUESTION # 94
You have been asked to investigate an anonymous tip that an executiveofa company has paid bribes to secure business with a foreign government-controlled company. Which would MOST fully support the allegation without any additional evidence?
- A. The executive s files include duplicates of invoices for the customer that have sales prices 10% higher than the original
- B. Records of funds transfers lo a company lor advertising services that is not on the approved vendor list
- C. The sales agent's commission is being paid to a bank account in a country outside of the agent's sales territory
- D. The executive approved an increase in the commissions paid to the sales agent dealing with the customer from 5% to 10%
Answer: C
NEW QUESTION # 95
During an organizational overview of financial crime controls, Ms. Patel, the compliance analyst, discovers that certain customer due diligence procedures are inconsistently applied across different branches of the organization. What should Ms. Patel recommend to address this issue?
- A. Implement additional layers of bureaucracy to ensure uniformity.
- B. Conduct a comprehensive review of existing customer due diligence procedures.
- C. Assign responsibility for customer due diligence to individual branch managers.
- D. Disregard the inconsistencies as they may not significantly impact compliance.
Answer: B
NEW QUESTION # 96
In an attempt to ensure the selection of his bid for a government project in a foreign country Mr. Jones decided to pay off a foreign official who had the ability to influence the process Mr. Jones created a shell company to conduct the transaction.
In exchange for this influence Mr. Jones created a series of invoices that made it appear as if his shell company owed money to Ihe foreign official Mr. Jones wired money from his bank account in the US to the shell company in the foreign jurisdiction for credit to the government official Unfortunately for Mr. Jones, the official did not keep his promise and Jones did not gel the bid.
When did money laundering FIRST occurs?
- A. When Mr. Jones wired the funds to the shell company
- B. When Mr. Jones created the shell company
- C. When Mr. Jones transferred funds from the shell company to the public official
- D. When Mr. Jones generated a series of false invoices
Answer: A
NEW QUESTION # 97
You are a federal investigator who is trying to determine if a privately held company is evading taxes through an offshore shell corporation.
Which document would be MOST helpful to determine the beneficial owner of the shell corporation?
- A. A business license lor Ihe operation of the shell corporation
- B. Invoices from the privately held company for exported products
- C. A power of attorney that grants the privately held corporation control over the shell corporation
- D. Previous lax filings of Ihe shell corporation in its home jurisdiction
Answer: C
NEW QUESTION # 98
Ms. Yu is a scammer based in Singapore who has spent the last several months promoting a fraudulent investment fund that purports to offer substantial returns on high-yield bonds. While she has been successful some investors have recently raised questions over a lack of details on the fund's portfolio and nature of the bonds.
Concerned that her securities fraud might be exposed. Ms. Yu is seeking to conceal assets and cover her tracks in the event of an investigation. She plans on creating one or more legal entities and utilizing them to move proceeds of the scheme out of the country.
Which country would be MOST attractive to Ms. Yu as part of this effort?
- A. A country that has not agreed to implement the Common Reporting System established by the Organization for Economic Cooperation Development (OECD)
- B. A country with anonymous company formation and no public accessible corporate register
- C. A country with a history of banking secrecy
- D. A country with a reputation for corruption among its government officials
Answer: B
NEW QUESTION # 99
You arethe ChiefAnti-Money Laundering Officer for a large multinational financial institution and you are building your risk-based Enhanced Due Diligence (EDO) program.
Which business would LEAST likely be targeted tor EDD?
- A. A storage facility
- B. A travel agency
- C. A law firm
- D. A charitable organization
Answer: A
NEW QUESTION # 100
You are a federal investigator and have identified assets in an offshore jurisdiction that you have strong evidence are the proceeds of illicit activities that look place in your jurisdiction.
While you have convincing evidence that would tie the assets to the financial crime you are investigating you have been unable to obtain documents that show true beneficial ownership because of secrecy laws.
Which action is MOST likely to gain control of the properly or identify the true beneficial owner?
- A. File an rem proceeding against the assets
- B. File a quitclaim deed on the properly
- C. File a tax lien against the property
- D. File a lawsuit against the caretaker to obtain the assets
Answer: A
NEW QUESTION # 101
Country A is conducting a criminal investigation of alleged corruption by a public official in its country and needs to obtain bank records in Country B It appears that the public official controls the bank account.
To assure that the evidence (i.e. bank records) can be obtained for a trial in Country A which should the investigators in Country A do?
- A. Transmit a mutual legal assistance request through the Central Authority
- B. Request authentication of the records from the Central Bank of Country B
- C. Make an initial contact with the bank to assure that the records are in the name of the public official
- D. Make an official request through Interpol
Answer: A
NEW QUESTION # 102
John purchased a property live years ago Real estate records show that two years ago, John transferred his interest to a third parley Susan. Susan obtained a mortgage on the properly with a mortgage company Company Z.
John maintains the properly and pays the mortgage and taxes John only lives there on the weekends John also rents a room to someone who lives at the property full time.
You are the investigator tasked with identifying the property's beneficial owner Who is the beneficial owner?
- A. John
- B. Company Z
- C. Renter
- D. Susan
Answer: A
NEW QUESTION # 103
A prosecutor in Country X needs to obtain the legally admissible testimony of Person A who resides in the United States, related to an ongoing criminal investigation Person A is incapable ol traveling and will only provide testimony if compelled by a court order in the U.S. There is no bilateral or multilateral treaty or convention that facilitates mutual legal assistance between these two countries.
Which should the prosecutor submit to obtain the testimony of Person A?
- A. A request for a litigation hold
- B. A request for a production order
- C. A Mutual Legal Assistance Treaty request
- D. A Letters Rogatory request
Answer: D
NEW QUESTION # 104
A law enforcement agent is pursuing an asset recovery case against a defendant accused of running a multimillion-dollar securities fraud scam. The defendant is thought to have moved more than $25 million through a corporate brokerage account held by a corporation formed in Las Vegas. Nevada.
It is believed that funds were sent to accounts held by shell companies in the Netherlands and the Bahamas. It is also suspected that the defendant purchased luxury goods including several high-end sports cars with proceeds of the fraud. The vehicles are registered and tilled to a trust company with a mailing address that is a post office box in Delaware. The agent is attempting to connect the vehicles to the defendant to make the case that they should be seized.
Which item below would BEST support this effort?
- A. Records of incoming funds transfers received by the corporate brokerage account held by the Nevada corporation
- B. Records of outgoing funds transfers from the accounts of the shell companies in the Netherlands and Bahamas
- C. An invoice from the shipping company for the cars that is addressed to the defendant
- D. Contact information for a registered agent acting as trustee of the trust company that holds the vehicle titles
Answer: C
NEW QUESTION # 105
An individual wrote emails lo a local government posing as officials from companies with ongoing contracts with the government In the emails, he requested that wire transfers for payments owed be remitted to new bank accounts The emails appeared legitimate because they included valid but unlawfully obtained tax identification numbers for the companies In all the individual managed to steal nearly $2 million.
Which step would BEST address Ihe gap in the localgovernment'sfraud prevention program?
- A. Conducting a fraud risk assessment of the controls used for funds transfer approvals
- B. Conducting analyses of contractor tax identification numbers and their approved bank accounts
- C. Conducting more frequent bank reconciliations to screen for fraudulent electronic transactions
- D. Conducting thorough due diligence on all contractors and subcontractors
Answer: A
NEW QUESTION # 106
Which fraud channel is used lo steal personal identifying information from your computer?
- A. Malware
- B. DoS (denial-of service) attack
- C. Vishing
- D. Spooling
Answer: A
NEW QUESTION # 107
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