Skip to content

FRM Part II · FRM Exam Part II · Case Study: Financial Crime and Fraud

A compliance officer notices a customer making many cash deposits of just under the reporting threshold across several branches in one week, then wiring the total abroad. Which money laundering stage and technique does this most closely represent?

This is placement using structuring, also called smurfing. The customer splits cash deposits below the reporting threshold to introduce illicit funds into the banking system without triggering reports. The later wire abroad hints at layering, but the main technique described is structuring.

  1. ALayering through shell company loans
  2. BIntegration through real estate purchases
  3. CPlacement using structuring (smurfing)Correct
  4. DPredicate offence of tax evasion only

Explanation

Breaking cash into amounts below reporting thresholds to get it into the financial system is structuring, which is the placement stage. The wire abroad begins layering, but the key technique described is structuring. Integration involves returning funds as apparently legitimate wealth.

Did you get it right without looking?

One question tells you little. A timed set on Case Study: Financial Crime and Fraud shows your real accuracy, how long you take and where you lose marks.

Practise Case Study: Financial Crime and FraudFree diagnostic mock

More Case Study: Financial Crime and Fraud questions