SIE Exam Question 180: Answer and Explanation

Question: 180

__________ is the process that criminals use to try to hide or disguise the source of their illegal money by converting it into funds that appear legitimate.

• A. Layering
• B. Structuring
• C. Laundering
• D. Blackmail

Correct Answer: C

Explanation:

Money laundering is the process that criminals use to hide or disguise the source of their illegal money by converting it into funds that appear legitimate. Layering is the step in the money laundering process in which the criminal executes a sequence of transactions with the same money to obscure its origin. Structuring, or smurfing, is the process of dividing a larger transaction into smaller transactions to avoid triggering a reporting or recordkeeping requirement. Blackmail is a crime in which one threatens to reveal damaging information about another unless a large sum of money is paid.