Which activity would likely raise a red flag for money laundering during account management?

Which activity would likely raise a red flag for money laundering during account management?

• A. Clients asking for higher withdrawal limits
• B. Frequent deposit of checks in varying amounts
• C. Consistent large cash transactions without explanation
• D. Clients requesting additional account confidentiality

Answer: (C)

The activity that would likely raise a red flag for money laundering during account management is consistent large cash transactions without explanation. This behavior is a significant indicator of potential money laundering because large amounts of cash can be indicative of illicit sources of income that individuals may attempt to obscure. Typically, legitimate businesses or individuals do not engage in consistently high-volume cash transactions without a clear and justifiable purpose. Money launderers try to distance their illegal funds from the criminal activity that generated them, and large cash deposits can easily raise suspicions among financial institutions. In contrast, while clients asking for higher withdrawal limits or requesting additional account confidentiality could be considered suspicious in certain contexts, these alone do not necessarily indicate money laundering. Similarly, frequent deposits of checks in varying amounts might suggest irregular transactions, but without additional context or supporting suspicious behavior, these alone are not as immediately concerning as consistent large cash transactions. The absence of explanation in those cash transactions is a crucial factor, as it directly aligns with behaviors typically associated with attempts to disguise illicit activity.

The activity that would likely raise a red flag for money laundering during account management is consistent large cash transactions without explanation. This behavior is a significant indicator of potential money laundering because large amounts of cash can be indicative of illicit sources of income that individuals may attempt to obscure. Typically, legitimate businesses or individuals do not engage in consistently high-volume cash transactions without a clear and justifiable purpose. Money launderers try to distance their illegal funds from the criminal activity that generated them, and large cash deposits can easily raise suspicions among financial institutions.

In contrast, while clients asking for higher withdrawal limits or requesting additional account confidentiality could be considered suspicious in certain contexts, these alone do not necessarily indicate money laundering. Similarly, frequent deposits of checks in varying amounts might suggest irregular transactions, but without additional context or supporting suspicious behavior, these alone are not as immediately concerning as consistent large cash transactions. The absence of explanation in those cash transactions is a crucial factor, as it directly aligns with behaviors typically associated with attempts to disguise illicit activity.