Certified Regulatory Compliance Manager (CRCM) Practice Exam

A series of transactions just below the reporting threshold is a well-documented indicator of potential money laundering according to Bank Secrecy Act (BSA) regulations. This behavior, often referred to as "structuring" or "smurfing," involves breaking up large amounts of cash into smaller amounts to evade detection and reporting requirements. Since financial institutions are required to report cash transactions over a certain limit, customers may deliberately keep transactions under this threshold to avoid triggering a Suspicious Activity Report (SAR).

This pattern of conduct raises red flags because it suggests that the individual may be attempting to hide the source of funds or facilitate money laundering activities. Regulatory agencies, including the Financial Crimes Enforcement Network (FinCEN), emphasize the importance of monitoring such transaction activities as part of effective anti-money laundering (AML) compliance programs.

While large transactions or changing addresses may warrant scrutiny, they do not intrinsically indicate an intention to launder money as clearly as transactions that are methodically structured to avoid detection.