AML Compliance Training · Module 1
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Compliance Training Series

Detecting Financial Red Flags in a Complex Market

Understanding BSA/FINRA obligations and your role in preventing financial crimes

⏱️ 8 min 📊 7 Screens 🎓 1 CEU
$ ⚠ ⚠

Learning Objectives

By the end of this module, you will be able to:

1
Identify the Three Stages of Money Laundering
2
Spot Red Flags in Customer Behavior
3
Execute Proper SAR Filing Procedures

The Three Stages

Money laundering follows a distinct pattern. Understanding each stage helps you identify suspicious behavior early:

Detection becomes harder at each stage
1
Placement

Getting illicit funds into the financial system

HIGH DETECTION RISK
2
Layering

Moving funds through complex transactions

COMPLEX TO TRACE
3
Integration

Returning funds to the source as clean money

HARDEST TO CATCH

Red Flags to Watch For

Click each card to explore specific warning indicators

💰 Unusual Cash Activity
Click to explore →
Large cash deposits that don't match customer profile or business model. Frequent deposits just below $10,000 (structuring). Deposits in different names but same account. Unexplained cash withdrawals immediately after deposits.
🌐 Geographic Anomalies
Click to explore →
Wire transfers to known high-risk jurisdictions. Transactions with countries on OFAC sanctions lists. Unusual origin-destination pairs (e.g., funds entering US but wired immediately to Iran). Rapid movement between multiple countries with no clear business purpose.
🏢 Shell Entity Indicators
Click to explore →
Accounts registered to companies with no apparent business operations. Minimal website presence or business address. Accounts set up for vague business purposes. Large transactions despite stated low-activity business model. Beneficial ownership documentation that appears fabricated.
↩️ Rapid Fund Movement
Click to explore →
Funds entering account and exiting within hours or days. Deposits quickly followed by wire transfers. Round-trip transactions (A→B→A pattern). Multiple accounts used for sequential transfers. No logical business reason for transfer patterns.

SAR Filing Process

Suspicious Activity Reports (SARs) are your frontline defense. Follow these critical steps to ensure compliance:

SARs must be filed within 30 calendar days of detecting the suspicious activity
1
Document Everything

Record all relevant transactions, dates, amounts, and patterns. Save communications and supporting documentation.

2
Notify BSA Officer

Report findings to your Bank Secrecy Act Officer immediately. Do not tip off the customer.

3
Complete SAR Form

File FinCEN Form 111 with detailed suspicious activity information. Include timeline, amounts, and customer identifiers.

4
Maintain Confidentiality

SAR existence is strictly confidential. Sharing SAR information violates federal law. Keep filing documentation secure.

Knowledge Check

You notice a customer making twelve $9,500 cash deposits in one week, then wiring all funds to Bulgaria the next day. The customer's stated business is consulting. What is the most appropriate action?
✓

Module Complete

You've successfully completed AML Compliance Training · Module 1

✓ Know the Three Stages
✓ Document First, Always
✓ Never Tip Off Customers
✓ Act Within 30 Days