Financial crime, Motivations and Typologies (CY-803 (B)) - Important Questions

Define money laundering. Identify and explain the main stages in the money laundering process (placement, layering and integration) with one example for each stage.

Explain the offences and penalties under the Money Laundering Act applicable to individuals and corporate entities. Discuss the key elements required to establish an offence and summarise typical sanctions.

Describe the composition, functions and powers of the Financial Intelligence Centre (FIC). Explain its role in combating financial crime and how it interacts with law enforcement agencies and reporting entities.

Explain the Net Worth Method for investigating suspected proceeds of crime. Demonstrate the method with a worked numerical example showing the calculation of unexplained wealth.

Include the standard accounting relation used in investigations, e.g.: $$\text{Unexplained Wealth} = \left(\text{Closing Net Worth} - \text{Opening Net Worth}\right) + \text{Living Expenses} - \text{Reported Income}.$$

List and explain common red flags of insurance fraud. For each red flag, outline the recommended investigative steps an investigator should take to verify or refute suspicion.

Define bribery and corruption. Explain common procurement fraud and kickback schemes including typical red flags, and describe control measures and detection techniques to prevent such schemes.

Describe common techniques used in the layering stage of money laundering. Provide practical examples illustrating how transactions can be structured to obscure the origin of illicit funds.

Explain the concept of predicate offences to money laundering and outline the reporting obligations of regulated entities, including the circumstances for filing suspicious transaction reports (STRs) and any typical threshold/reporting requirements.