Financial Aspects

Question 1

What is 18 USC 1956

Answer 1

20 year Felony
Crime to knowingly conduct or attempt to conduct a financial transaction with the proceeds of specified unlawful activity with specific intent to:
Promote the carrying on specified unlawful activity
Conceal or disguise the nature, location, source, ownership, or control the proceeds
Avoid a currency transaction reporting requirement
Evade taxes as codified in title 26 USC 7201 or 7206 of internal revenue code

Question 2

18 USC 1957

Answer 2

10 year Felony
Crime to knowingly engage in, or attempt to engage in, a monetary transaction exceeding $10,000 in criminally derived property that is the proceeds of specified unlawful activity
No intent needed

Question 3

What is “Cash on Hand”

Answer 3

Cash on hand is defined as coin and currency (bills, federal reserve
notes, foreign currency) in the subject’s possession, on the subject’s
person, in the subject’s residence, or other place, in nominee hands,
or in a safe-deposit box.

Question 4

What are DISTRACTORS??

Answer 4

Credit card balance
Anything outside of the investigative period
Bank balances falling in between

Question 5

What is CTR?

Answer 5

Currency Transaction Report
Banks, casinos and other financial institutions are required by law to file a CTR when they are involved in a transaction with customer involving more than $10,000 (has to be 10,000.01 or more).

Question 6

What is CMIR?

Answer 6

Report of International Transportation of Currency or Monetary Instruments
This form is required to be filed with the Bureau of Customs and Border Protection by each person who physically transports, mails, or ships, or causes to be physically transported, mailed, or shipped currency or other monetary instrument in an aggregate amount exceeding $10,000 at one time from the United States to any place outside the United States.

Same goes if a person who receives in the United States currency or other monetary instruments in an aggregate amount exceeding $10,000 at one time which has been transported mailed or shipped to the person from any place outside the United States. Needs to be filed within 15 days after receipt.

Question 7

What is IRS form 8300 For?

Answer 7

Requires a trade or business that receives more than $10,000 in cash in one transaction or two or more related transactions
Related transactions must be aggregated within a twelve month period of time and a form 8300 was filed when aggregated transaction exceed $10,000

Question 8

What are SARS?

Answer 8

Suspicious Activity Reports
The reports are required whenever the institution discovers insider abuse in any amount, transactions aggregating $5,000 or more that involve potential money laundering or violations of Bank Secrecy Act, violations aggregating $5,000 or more where a suspected can be identified and violations aggregating $25,000 or more regardless of potential suspect

Question 9

What is Net Worth Method?

Answer 9

Theory that the sources of funds available to the suspect will ultimately show up as an increase in the subjects’s net worth.

Effective if the suspect is purchasing or increasing assets and reducing liabilities.

          Assests Minus:_Liabilities\_\_\_ Equals:  Net worth

Minus:____Prior Yr Net worth____
Equals: Increase in net worth from prior yr

Add:____Personal Living Expenses___
Equals: Total Net Worth increase

Minus:_______Funds from known sources___
Equals: Funds from unknown sources

Question 10

What is Bank Deposit Method?

Answer 10

Through bank deposit analysis, unknown sources of funds are located by reviewing bank records and other financial transactions entered into by the suspect

Question 11

What is the Sources and Application Method?

Answer 11

Comparison is made between the suspects known applications and known sources of funds during a given period of time.

Question 12

What is Applications?

Answer 12

Any actual outlay of funds (payments) whether made using currency or checks

Question 13

What is Sources?

Answer 13

The receipt of monies by legitimate means.

Question 14

Is beginning cash on hand considered a source or application?

Answer 14

Source

Question 15

Beginning account balance… a source or application?

Answer 15

Considered a source of funds since they were earned in a prior period.
(Bank accounts, savings, credit union and casino accounts)

Question 16

Is net salary a source or application?

Answer 16

Source of funds

Question 17

Ending cash on hand balance… source or application?

Answer 17

Application since it represents the storing or saving of funds that came in during the investigative period.

Question 18

Ending account balance… source or application?

Answer 18

Application, it represents funds available to the suspect at the conclusion of the investigative period

Question 19

What does a financial institution and casinos need to do when they sell a bank check or draft, cashiers check, money order, or travelers check for $3,000 or more in currency?

Answer 19

Maintain identifying information about the purchaser, including:
Name
Date of transaction
Serial number of instruments sold

Question 20

What are terms used to describe the stages of money laundering?

Answer 20

Placement
Layering
Integration

Question 21

What is placement?

Answer 21

The process of placing illegally obtained funds into the normal financial system.

Question 22

What is layering?

Answer 22

The process of moving funds through various financial institutions and countries using multiple entities in order to make the tracing of the flow more difficult for the investigator.

Question 23

What is Integration?

Answer 23

The return of the funds to the perpetrator of criminal activity in a form that makes the funds appear to have come from a legitimate source.

Question 24

What is Report of foreign bank and financial accounts? (FBAR)

Answer 24

Required to be filed by Each United States person who has a financial interest in or signature or other authority over any born financial accounts including bank, securities, or other types of financial accounts in a foreign country if the aggregate value of these financial accounts exceeds $10,000 at any time during the calendar year they must report that relationship each calendar year by filing this report with the Department of treasury on or before June 30 of the succeeding year.