Latest Nov 16, 2024 CFCS Brain Dump: A Study Guide with Tips & Tricks for passing Exam
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NEW QUESTION # 78
ABC LLC is a company that is incorporated in an offshore jurisdiction Bank A opens an account for ABC LLC after completing a standard Customer Due Diligence questionnaire ABC LLC is a holding company for another firm that does business with arms companies in North Korea that are rumored to supply a number of militant groups.
Which two statements may be true about Bank A? Choose 2 answers ^
- A. It may be subject to sanctions for ultimately dealing with North Korea
- B. It may be absolved of liability by way of conducting initial due diligence
- C. It may be aiding in money laundering and terrorist financing
- D. It may be liable (or opening an account for an offshore holding company
Answer: A,C
NEW QUESTION # 79
You are investigating a multi-national company for financial fraud As part of your investigation, you would like to determine whether the company has complied with applicable tax laws in the jurisdictions in which it operates As a preliminary starting point you need to know the applicable laws relating to exchange of tax information.
Other than contacting the governments of each jurisdiction which organization's website would have the MOST effective resources for obtaining such information?
- A. United Nations Office of Drugs and Crime (UNODC)
- B. Organization for Economic Cooperation and Development (OECD)
- C. Internal Revenue Service (IRS)
- D. World Bank Doing Business Project
Answer: B
NEW QUESTION # 80
In your job as an analyst with a securities regulator you are reviewing the movement and volatility in penny stocks. As part of your daily work, you review reports and you encounter this chart in the chart the dotted line represents the closing price and the bars represent average daily volume.
Which type of securities fraud should you begin investigating?
- A. Front running
- B. Cherry picking
- C. Insider trading
- D. Market manipulation
Answer: D
NEW QUESTION # 81
Which two features of hawala make it particularly attractive to terrorist financing? Choose 2 answers
- A. The value of the transaction can be transferred across jurisdictions without the need for a hard currency transfer
- B. The hawala system generates a great deal of profits often used for terrorist financing
- C. The nature of the hawala system is based on trust making formal records unnecessary
- D. Hawala utilizes wire transfers thereby making it harder for authorities to track
Answer: A,C
NEW QUESTION # 82
During a routine audit, a financial institution discovers that its sanctions screening software has not been updated to include the latest changes to the OFAC SDN list. What is the most appropriate action for the institution to take?
- A. Conduct manual screening of transactions against the latest version of the SDN list until the software is updated.
- B. Proceed with transactions and update the screening software during the next scheduled maintenance.
- C. Notify OFAC of the software issue and seek guidance on interim measures.
- D. Immediately suspend all transactions until the screening software is updated.
Answer: A
NEW QUESTION # 83
Your Chent has been the victim of an investment fraud and he is in the process of obtaining a judgment against the perpetrator You have provided him with solid evidence that funds he invested in the scheme are on deposit in a domestic bank in the name of a shell corporation incorporated in another jurisdiction Through previous conduct by the perpetrator it can be demonstrated that not freezing the account could mean that the funds will be dispersed thereby frustrating a potential claim.
To protect the funds which should you suggest to your client?
- A. Request a civil forfeiture action against the perpetrator
- B. Provide a Mareva injunction to the bank
- C. File a Lis Pendens against the account
- D. Request a Norwich Pharmacal without gag order be issued to the bank
Answer: B
NEW QUESTION # 84
You are a fraud investigator who is working lor a large hardware and construction supply retailer that believes it is losing revenue to internal theft and embezzlement. The company has many vendors and fraudulent invoicing is suspected as a source of lost funds.
You have gathered records on payments to vendors from the accounts payable department, and are now going vendor by vendor to analyze documents and look for sources of fraud. You are currently reviewing information on one vendor, Quality Goods, Inc.
* Twenty invoices were received and paid from Quality Goods in the past six months
* Sixteen invoices were for amounts of about S9,000 dollars each Two were just below S1,000 and the remaining two were for amounts of about $3,000
* Purchase orders for items from Quality Goods total about $130,000
* Descriptions of items purchased varies somewhat by invoice but they generally describe different types of plumbing supplies Given this information what would be the most likely red flag?
- A. The amount invoiced by Quality Goods appears to exceed total purchase orders
- B. The majority of the invoices from Quality Goods appear to be in amounts that would indicate structuring
- C. The descriptions of items purchased on the invoices do not appear to match the company's business
- D. The number of invoices appear to exceed what would be reasonably expected in a six-month period
Answer: A
NEW QUESTION # 85
Bank A receives a wire transfer Irom Bank B located in another country. When run through Bank A's sanctions screening process, some of the identifying information of the entity initialing the transfer appears as a partial match with an entity on a sanctions list Bank A routinely processes wire transfers from Bank B and almost never runs into matches with sanctions lists.
Which further review should Bank A conduct on the wire transfer?
- A. Bank A should reject the wire transfer and alert the regulatory or enforcement agency that administers the sanction immediately
- B. Bank A should not complete the wire transfer until it gathers more information It should consult the full identifying information in the sanctions entry and attempt to find that information in the transfer
- C. Bank A should contact Bank B lor confirmation that the entity is not on the sanctions list Once it receives written confirmation from Bank B's compliance staff it can complete the transfer without further investigation
- D. No review is required Bank B would already have conducted due diligence for sanctions violations and further action would be duplicative and unnecessary
Answer: B
NEW QUESTION # 86
Your firm has been retained aspairof a complex internal fraud case for a large corporation.Aspartof the investigation you are seeking to collect transaction records held in a subsidiary office located in another country.
The country has strict laws governing cross-border sharing of its citizens' personally identifiable information It does allow data sharing under sate harbor agreements with companies that meet certain data protection standards but your company does not currently have the criteria for such an agreement.
You are not sure il the records you are seeking would contain personal information subjecttothe country's data privacy laws but the matter is time-sensitive and reviewing these records is considered essential to move forward.
Which is Ihe BEST next step lo lake in your investigation?
- A. Review the transaction records within the subsidiary s country and only transmit relevant non-personal data back to your country
- B. Initiate a review of your company's data protection standards lo identify any needed improvements and start the process to applyfora safe harbor agreement
- C. Request that the transaction records be transmitted to your country immediately then delete any personally identifiable information during the review process
- D. Submit a request to law enforcement in the subsidiary's country to assist with searching and seizing the transaction records
Answer: A
NEW QUESTION # 87
Which fraud channel is used lo steal personal identifying information from your computer?
- A. Vishing
- B. Malware
- C. DoS (denial-of service) attack
- D. Spooling
Answer: B
NEW QUESTION # 88
During a routine review, a compliance officer at a financial institution discovers that one of its customers has provided false information to evade OFAC sanctions. What is the most appropriate action for the compliance officer to take?
- A. Ignore the false information if it does not directly impact the institution's operations.
- B. Advise the customer to correct the false information and continue business as usual.
- C. Conduct enhanced due diligence on the customer and notify senior management of the findings.
- D. Immediately terminate the customer's account and report the incident to OFAC.
Answer: D
NEW QUESTION # 89
WhichtransactionMOST likely suggests the integration stage of money laundering?
- A. Deposits of large amounts of cash
- B. multi-countryimport/export invoices
- C. Multiple electronic fundstransfersbetween shell companies
- D. Large cash purchase of prepaid cards
Answer: B
NEW QUESTION # 90
Which is the MOST effective way to verify a company's registration information?
- A. Examine the company's website
- B. Access the jurisdiction's court system and search for any court cases against the company which will include the company's registration number and information
- C. Conduct a Google advanced search using the keyword registration details to find articles or other pieces of information about the company
- D. Access the jurisdiction's company registry repository and search lor the company name and retrieve the company's information
Answer: D
NEW QUESTION # 91
According to the FATF 2012 recommendations which should countries do to ensure compliance around money remittance businesses?
- A. Ensure proper identification and registration of persons operating money remittance businesses
- B. Provide a list of all money remittance businesses to the Egmont Group
- C. Prohibit money remittance businesses to be operated as a sole proprietorship
- D. Require compliance measures to be implemented once a Suspicious Activity or Transaction Report (SAR or STR) has been died
Answer: A
NEW QUESTION # 92
A fraud consultant has been engaged to review and determine whether (here has been any fraudulent activity at a large manufacturing company. The consultant utilizes Benlords Law to analyze the disbursements (payments) over the past two years.
Which should prompt the consultant to investigate further?
- A. The frequency of the leading number of the payment amount being "4" was greater than the leading number being "7"
- B. The frequency of the leading number of the payment amount being "5" was greater than the leading number being "8"
- C. The frequency of the leading number of Ihe payment amount being "1" was greater than the leading number being "4"
- D. The frequency of Ihe leading number of the payment amount being "9" was greater than the leading number being "2"
Answer: D
NEW QUESTION # 93
During a training session on OFAC compliance, an employee asks about the consequences of processing transactions involving individuals or entities designated under OFAC sanctions programs. What is the most accurate response to the employee's inquiry?
- A. Processing transactions involving individuals or entities designated under OFAC sanctions programs is permissible if authorized by senior management.
- B. Processing transactions involving individuals or entities designated under OFAC sanctions programs may result in civil penalties but not criminal charges.
- C. Processing transactions involving individuals or entities designated under OFAC sanctions programs is permissible if conducted through offshore accounts.
- D. Processing transactions involving individuals or entities designated under OFAC sanctions programs may result in both civil and criminal penalties.
Answer: D
NEW QUESTION # 94
Through an annual review for an insured persons government-provided health insurance claims you determine that the applicant's eligibility has been consistently and significantly overstated. Further the medical justification reveals possible duplicate procedures within a short period of time All details and documents provided by the applicant are verified to be accurate and valid.
This type of fraud is usually initiated from which involved party?
- A. Health insurance company
- B. Service or health care provider
- C. Beneficiary or claimant
- D. No involved party, these are merely accidental errors in billing at the system level
Answer: B
NEW QUESTION # 95
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 outgoing funds transfers from the accounts of the shell companies in the Netherlands and Bahamas
- B. Records of incoming funds transfers received by the corporate brokerage account held by the Nevada corporation
- C. Contact information for a registered agent acting as trustee of the trust company that holds the vehicle titles
- D. An invoice from the shipping company for the cars that is addressed to the defendant
Answer: D
NEW QUESTION # 96
A compliance officer at AirPlus a large aerospace firmthatproduces airplanes for commercial and military use was contacted by a director of one of the firm's business partners The director had concerns over potential irregularities in recent transactions and business dealings in matters connected to AirPlus and her company.
The business partners company is located in a country where state-owned enterprises are heavily involved in the airline industry AirPlus has recently wonseveral large contracts in the country to build airplanes for slate-owned enterprises.
The director of the partner company believes these contracts may have been secured through bribes paid by AirPlus to government officials and suspects that the recent unusual activity she has noted indicate her company was utilized in the bribery scheme.
The director has flagged four instances to bring to your attention Which is the BESTindicatorof bribery?
- A. The partner company recently appointed a new CEO whose prior experience involved managing a state-owned airline in another country
- B. The partner company received a series of zero-interest loans from the aerospace company with open-ended repayment terms in recent months
- C. Sales agents for the partner company received large bonuses after closing a deal to produce planes for the country's national airline in recent months
- D. The partner company recorded an increase in operating costs in financial statements in recent months and an increase in the number of employees ,
Answer: B
NEW QUESTION # 97
An employee of Company A is injured in a car accident and rushed to a government-owned hospital in Country X. Prior to admitting the patient the head doctor insists that is it customary for foreigners to pay the hospital a generous donation" and insinuates that the patient will not be admitted without the payment.
The request is an example of which offense?
- A. Extortion
- B. Solicitation
- C. Duress
- D. Bribery
Answer: D
NEW QUESTION # 98
You are in charge of network security for a national financial institution. Despite your best efforts you have suffered a major data breach due to overseas hackers. You are now tasked with reacting to that breach.
Which action should you take immediately?
- A. Identify the sensitivity of the data and level of impact on the organization
- B. Deploy a new set of proxy firewalls to your intranet
- C. Terminate all external connections to devices that hold sensitive customer data
- D. Reconfigure all of your access devices lo refuse connections for any IP address that is international
Answer: C
NEW QUESTION # 99
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