Which parties should be trained on emerging trends and red flags?

An analyst reviews an alert for high volume Automated Clearing House (ACH) activity in an account. The analyst’s initial research finds the account is for a commercial daycare account that receives high volumes of large government-funded ACH transactions to support the programs. The account activity

consists of checks (cheques) made payable to individual names in varying dollar amounts. One check indicates rent to another business.

An Internet search finds that the daycare company owner has previous government-issued violations for safety and classroom size needs, such as not having enough chairs and tables per enrollee. These violations were issued to a different daycare name.

Simultaneous to this investigation, another analyst sends an email about negative news articles referencing local child/adult daycare companies misusing governmental grants. This prompts the financial institution (Fl) to search all businesses for names containing daycare’ or "care*. Text searches return a number of facilities as customers at the Fl and detects that three of these businesses have a similar transaction flow of high volume government ACH funding with little to no daycare expenses.

During the investigation, new suspicious patterns and trends related to check cashing are observed. The Fl decides to conduct a training to ensure that 1) the AML program is robust and 2) the training program is relevant and appropriate.

Which parties should be trained on emerging trends and red flags? (Select Two.)
A . Financial crimes investigation unit
B . Loan department
C . Branch personnel
D . Senior management
E . The board of directors

View Answer

Answer: A, C

Explanation:

The parties that should be trained on emerging trends and red flags are the financial crimes investigation unit (A) and the branch personnel ©. These parties are directly involved in detecting, investigating, and reporting suspicious activity related to check cashing or other types of fraud or money laundering. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, “the FI should provide regular and relevant training to its staff on the AML program, policies, procedures, and systems, as well as on the latest typologies, indicators, and best practices for financial crimes investigations” (p. 36). The FI should also “ensure that the training is tailored to the specific roles and responsibilities of the staff, and that it is updated and evaluated periodically” (p. 36).

The other parties are not as relevant or appropriate as options A and C. The loan department (B) is not directly related to check cashing or other types of fraud or money laundering, although it may have some exposure to credit or identity fraud. The senior management (D) is responsible for overseeing and supporting the AML program, but not for conducting or supervising financial crimes investigations. The board of directors (E) is responsible for approving and reviewing the AML program, but not for implementing or monitoring it.

Reference: 1: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, available at ACAMS