1. The Treasury Department is the U.S.

government agency charged with

enforcing the most specific statutes against money laundering in the
United States.
*a. True
b. False

2. Correspondent banks allow citizens from all over the world to have
bank accounts within any U.S. bank.
*a. True
b. False

3. Banks file their official reports about suspected money laundering

activities with the Federal Trade Commission.
a. True
*b. False

4. Traceroute will show the web server path taken by a message over the
Internet.
*a. True
b. False

5. HTTP stands for Hightext Transfer Protocol.

a. True
*b. False

7. Bearer stock allows the owner of the shares to remain unidentified.

*a. True
b. False

8. Money laundering is usually a separate crime by itself.

a. True
*b. False

9. Since the passage of the Patriot Act, shell banks without any
physical presence in any jurisdiction are prohibited from operating in
the United States.
*a. True
b. False

10. The purpose of money laundering is to:

a. Take illegitimate funds and make them look like they were
earned from legitimate business activities.
b. Purposefully transfer restricted grant monies into
discretionary accounts through confutation.
c. Secretly take suitcases full of money from one country to
another.
*d. All of the above.
e. Only a and b.

11. A first step in a money laundering operation is to:

a. Obtain legal money.
*b. Deposit illegal money into the banking system.
c. Open a correspondent account.
d. Send a money wire transfer to another country.
e. None of the above.

12. What is an important factor in creating the need to start a money

laundering operation?
*a. Successful criminal activities.
b. The increase in international business.
c. Drug smuggling.
d. The Internet.
e. None of the above.

13. The reason most money laundering schemes seem to be uncovered is

due to:
a. Forensic accountants.
b. Bank officials.
c. The FBI.
d. A squealer about the operation.
*e. Both b and d.

14. To avoid detection by law enforcement authorities, money launderers

will only send a maximum money transfer that is:
a. $5,000 or less.
*b. $10,000 or less.
c. $15,000 or less.
d. $20,000 or less.
e. None of the above.

15. Banks must file which of the following forms when they become aware
of suspicious customer activity related to possible money laundering?

a. Currency Transaction Report.

b. Over-Currency Report.
c. International Transportation of Currency and Money Report.
*d. None of the above.

16. The difference between an off-shore bank and a shell bank is that:
a. The shell bank has a physical presence in the country in which
it is licensed whereas the off-shore bank does not.
*b. The off-shore bank specifically cannot carry on business in
the jurisdiction in which it is licensed whereas such
restrictions do not specifically affect shell banks.
c. Only shell banks use correspondent services.
d. U.S. banks have more access to client account information in a
shell bank than in an off-shore bank.
e. None of the above.

17. Which one of the following businesses would a money launderer most
want to acquire?
a. Travel agency.
b. Broker.
*c. Series of newspaper/magazine stands.
d. Gas station.
e. None of the above.

18. Which one of the following is the easiest to falsify?

a. Web logs.
*b. Paper documents.
c. Wire transfer reports.
d. Hard drive files.

19. All of the following would be found in HTTP log files except:
a. Size of the requested files.
b. Address of the website that the current visitor came from.
c. IP address of the visitor.
*d. Speed of transfer from the previous website.
e. None of the above.

20. Which one of the following statements about web logs is true?
a. Logs can show unencrypted passwords.
b. Logs provide an audit trail of evidence about activities
occurring on a website.
c. Log entries are so expansive on a busy website that they are
virtually impossible to use for forensic purposes.

d. Log files are easy for hackers to erase.

*e. Both a and b.

21. Logs provide which of the following?

a. Name of the visitor entering the website.
b. Name of the country where the visitor's PC is located.
*c. The web page the visitor was at before entering the website.
d. The route taken over the Internet to arrive at the current
website.
e. All of the above.

22. The GMT time adjust to the East Coast of the United States is:
a. +5 hours.
*b. -5 hours.
c. +3 hours.
d. The time does not need to be adjusted.
e. None of the above.

23. After entering an IP address into a traceroute program, how long

does it normally take to trace the IP address back to its originating
source?
a. 1-2 hours usually.
b. 30 minutes on average.
c. About 1 minute.
*d. A few seconds.
e. None of the above.

24. Which of the following methods is the least likely to be used by a

money launderer?
a. Wire transfers of funds for less than $10,000.
b. Underground banking representatives who transfer funds.
*c. Internet bank transfers of funds.
d. Correspondent bank accounts.

25. In order to avoid working with a money launderer, due diligence in

relationship to a new business partner means:
a. Becoming familiar with the background of the potential new
partner.
b. Checking pay stubs of the new partner.
c. Reviewing the original copies (not photocopies) of
verification documents.
*d. All of the above.

26. One of the most important legislative acts restricting the

activities of money launderers in recent years is the:
a. Bank Secrecy Act.
b. Currency Transportation Act.
*c. International Money Laundering Abatement and Financial AntiTerrorism Act.
d. Bankers' Money Laundering Act.
e. None of the above.

27. In a family trust, if the trust documents provide for the automatic
transfer of the trust to another jurisdiction if the trust comes under
investigation, such a clause is called the:
a. Escape clause.
b. Removal clause.
*c. Flee clause.
d. Nondemential excel clause.
e. None of the above.

28. Money launderers prefer to establish business relationships with a

company whose operations are characterized by:
a. Being located in a foreign country.
*b. Large cash flows.
c. Low inventories.
d. Being run by one entrepreneur.
e. None of the above.

29. Which of the following activities would NOT be considered a likely

"red flag" to possible money laundering activities?
a. Payments made with several different currencies.
b. Making a large number of bank deposits ... all under $10,000.
c. Dividends paid to non-company stockholders.
*d. A large number of foreign country stamps in a passport.
e. All of the above.

30. Many times auditors do not believe they should report possible
money laundering activities that they find in their audits because:
a. Money laundering, per se, does not materially affect the
company's financial reports.
b. Client confidentiality should be maintained.
c. There is no auditing requirement for the reporting of money
laundering.
*d. All of the above.

31. In what year was money laundering recognized as a separate criminal

act by federal law in the United States?
a. 1950.
b. 1975.
*c. 1986.
d. It is not recognized as a separate criminal act by the United
States.
e. None of the above.
'

32. Which one of the following business events or transactions is most likely a sign of

money laundering operations?

*a. Prepayments on a credit card.
b. Kiting checks.
c. Smoothing net income on the financial statements.
d. Stealing passwords.

33. Which of the following is NOT a nonfinancial institution?

a. Broker/dealers
b. Credit card companies
c. Pawn shops
*d. Correspondent banks

34. Concentration accounts:

a. Were eliminated by the Patriot Act.
*b. Are used by banks to temporarily hold the cash deposits that they receive.
c. Is a term that relates to activities that were followed in Germany before WWII.
d. Are a way money launderers gain access to the U.S. banking system.

35. If bearer shares are used as means to identify ownership in a company, it means:
a. Only that all owners of the company are identified.
*b. Only the person presenting the bearer shares is identifiable.
c. The company is in receivership.
d. The company is a foreign company.

36. If I am using my online checking account to transfer money to another online

checking account at another bank, it is called:

a. A wire transfer.
b. An electronic fund transfer.

c. An underground transfer.
*d. None of the above.

37. The 404 in the following log entry means:

212.212.41.33 jdoe ships [06/Nov/2001:02:14:37 -0500] GET/library.html/books

HTTP/1.1 404 4839
a. The request was successful.
b. The request is completed.
*c. The request was unsuccessful.
d. The request conforms with Section 404 of the Sarbanes-Oxley Act.

38. A keylogger is used to:

a. Break into a computer.
b. Steal passwords.
*c. Record all keystrokes on the keyboard.
d. Physically copy keys to locks.

39. In which of the following would it be most unlikely for a money launder to have a bank

account?
*a. Netherlands
b. Nauru
c. Caymen Islands
d. Belize

40. When your bank files a report with the Treasury Department that you transferred

$200,000 into your checking account, which of the following forms was filed?
a. KYC
*b. CTR
c. CMIR
d. SAR