BSA/AML Examiner School Case Study

Internal Use Only

justify the funds that are later deposited to US banks or the over estimation of exports to ship money out of the country. The weakest link in the laundering process is in the bulk cash placement stage. For money laundering to be successful there must be no paper trail. This is why the Bank is asked to follow such stringent record keeping guidelines on certain types of transactions. Frequently, investigators are hampered by large number of transfers between accounts to obscure the trail of funds. The Bank is committed to helping authorities by having procedures in place to detect and report such suspicious activities. Should any of these types of money laundering activities be suspected; the account is to be periodically monitored as part of the Bank's investigation. The BSA Officer is responsible for reviewing any such activity and determining whether a Suspicious Activity Report (SAR) should be filed. Procedures for Complying with Anti-Money Laundering The Bank maintains a comprehensive system of detecting and deterring such transactions that is commensurate with the Bank's risk for money laundering and terrorist financing. The Bank's Anti Money Laundering Program assists the BSA Department and Senior Management in the analysis of cash, wire, loan, monetary instrument transactions and customer profiles and identifies high risk accounts. Proper procedures have been implemented to comply with Anti-Money Laundering rules. The following reports and procedures are part of our Anti-Money Laundering Program:  Detecting Suspicious Activity — "Red Flags"  Customer Due Diligence and Enhanced Customer Due Diligence Policy and Procedures  Politically Exposed Persons (PEP)  High Risk Customers Listing  Suspicious Activity Report Policy and Procedures  Customer Identification Policy and Procedures (CIP)  Bank's Fraud Detection Report or system  BSA Department daily procedures  Name of Banks system Reports utilized to monitor account activity. The following reports may assist management, officers and staff in detecting and monitoring unusual or suspicious activity:  Suspect kite report — This report identifies excessive activity in accounts and should be reviewed for cash activity. The account profile of an account used for money laundering can be similar to that of an account used for check kiting: high volume of activity, matching deposits and withdrawals, and low average balances in relation to activity.  Overdraft report — This report can be used to assist management or account officers to detect when a "good" customer, either individual or commercial, is suddenly having financial problems.  Delinquent loan reports — Although these reports generally get special attention, management or account officers are directed to pay close attention when delinquent loans are suddenly brought up current with no reasonable explanation in the file. Loan officers must be able to explain a sudden pay-off of seriously delinquent accounts and refer the account to the BSA officer.

For Training Purposes Only

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