Questions and Answers
What is money laundering?
The disguising and concealing of illegal income in order to make it appear legitimate.
What is the Bank Secrecy Act (BSA)?
Legislation that requires U.S. financial institutions to collaborate with the U.S. government in cases of suspected money laundering and fraud.
What is an employee required to do when witnessing suspicious activity?
Report to Title 31 - File a SAR.
What does 'Culture of Compliance' mean?
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What are the three phases of money laundering?
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Are civil and/or criminal penalties imposed for BSA violations?
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What does 'Cash In' mean?
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What does 'Cash Out' mean?
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Who is considered an agent in a casino context?
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What is the Financial Crimes Enforcement Network (FinCEN)?
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What is a gaming day?
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What is a Monetary Instrument Log (MIL)?
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What does it mean when you circumvent something?
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What are Components for an Anti-Money Laundering Program?
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What does 'maintaining confidentiality' mean as it relates to Title 31?
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What is a Multiple Transaction Log (MTL)?
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What is a Currency Transaction Report (CTR)?
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What are examples of suspicious activity?
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What is aggregation in the context of casino transactions?
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What is a Suspicious Activity Report (SAR)?
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What does Know Your Customer (KYC) involve?
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Study Notes
Money Laundering
- Concealing illegal income to make it appear legitimate.
Bank Secrecy Act (BSA)
- Enacted in 1970 by U.S. Congress.
- Mandates collaboration between financial institutions and the U.S. government to combat money laundering and fraud.
- Aims to reduce the risk of financial institutions unknowingly aiding illicit activities.
Suspicious Activities Reporting
- Employees must report suspicious activities by filing a Suspicious Activity Report (SAR) under Title 31.
Culture of Compliance
- Involves adherence to internal controls, policies, and procedures that ensure regulatory compliance.
Phases of Money Laundering
- Three distinct phases: Placement, Layering, and Integration.
Penalties for BSA Violations
- Non-compliance can result in both civil and criminal penalties.
Cash In
- Transactions where guests insert cash into player interfaces or currency exchanges at the casino.
Cash Out
- Instances where the casino provides cash to guests, such as cashing checks or redeeming tickets.
Agent
- A guest who conducts transactions on behalf of another individual or organization.
Financial Crimes Enforcement Network (FinCEN)
- A U.S. Department of the Treasury bureau focused on analyzing financial transactions to combat money laundering and terrorism financing.
Gaming Day
- Refers to the 24-hour period for which a casino maintains financial records for regulatory and accounting purposes.
Monetary Instrument Log (MIL)
- A chronological record that tracks cash purchases of monetary instruments valued between $3,000 and $10,000.
Circumvent
- To bypass or evade rules or regulations.
Anti-Money Laundering Program Components
- Includes Currency Transaction Reports (CTR), Suspicious Activity Reports (SAR), Customer Identification Programs, and Office of Foreign Assets Control (OFAC) compliance.
Confidentiality and Title 31
- Maintaining confidentiality involves not disclosing the existence of a SAR to the subject involved.
Multiple Transaction Log (MTL)
- A daily log implemented to track and aggregate customer cash transactions for reporting purposes.
Currency Transaction Report (CTR)
- Required when cash transactions exceed $10,000.01 in a single gaming day.
Examples of Suspicious Activity
- Transactions involving suspicious transfers of chips, large buy-ins with minimal play, unusual inquiries, and the use of counterfeit currency.
Aggregation
- Totaling guest cash-in and cash-out transactions to determine CTR reporting requirements.
Suspicious Activity Report (SAR)
- A mandatory document for financial institutions to report suspected incidents of money laundering, fraud, or other suspicious activities.
Know Your Customer (KYC)
- A process for businesses to verify customer identities and sources of funds to mitigate risks related to illegal activities.
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Test your knowledge on key terms related to money laundering and financial regulations. This set of flashcards covers essential concepts like the Bank Secrecy Act and money laundering definitions. Perfect for students and professionals in finance and law enforcement.