Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

What are potential AML dangers associated with casino junkets?

1. Low transaction amounts are usually involved

2. Involvement of large sums of money across borders

3. All transactions are made with documented identities

4. Customer funds are easily traceable

The correct answer is: Involvement of large sums of money across borders

The potential AML dangers associated with casino junkets primarily stem from the involvement of large sums of money that cross international borders. Junkets typically involve high rollers who are brought in by organizers to gamble, often with significant amounts of cash. This can create vulnerabilities, as the movement of large sums can facilitate money laundering activities. The ability to transfer substantial amounts of money quickly and across different jurisdictions presents challenges for financial institutions and casinos in terms of monitoring and reporting suspicious activity. Regulatory scrutiny is essential because these transactions can be structured in ways that obscure their origins or bypass controls meant to prevent money laundering. On the other hand, low transaction amounts or well-documented identities are not typical characteristics of junkets, as they usually deal with high-stakes gamblers rather than smaller, easily traceable transactions. This makes the option highlighting the involvement of large sums particularly relevant in understanding the AML risks present in the context of casino junkets.