3. Joseph's insurance business was booming primarily due to one client and this client's referrals. All were in the import/export trade, and a number of million-dollar life insurance policies were purchased with premiums paid by wire transfers from around the world. Joseph noticed much activity on the policies in the form of frequent withdrawals and surrenders, and distributions were made to off-shore bank accounts. He shrugged off any suggestion of illegal activity since he was not actually aware of such. Which of the following is a correct statement when Joseph is found to have facilitated a money-laundering scheme?

a. A plea of ignorance will be a successful defense.

b. No fines or penalties will apply since Joseph was not a principal participant in the scheme.

c. Joseph can continue to work as a financial services professional.

d. Closing his eyes to the facts will not be a valid defense.

21. Which of the following statements regarding terrorist financing is not correct?

• a. Money laundering is used to hide the origin of funds that support terrorist financing.
• b. Money laundering provides a significant share of the funds used in terrorist financing.
• c. Insurance companies are expected to screen transactions for suspicious activity possibly related to terrorist financing as well as suspicious activity relating to money laundering.
• d. Protection against terrorist financing is implied, but not directly addressed, in the USA PATRIOT Act.16. What is the basic objective of money laundering?
• a. to increase the value of illegal funds
• b. to convert foreign funds into U.S. dollars
• c. to cleanse bacteria and other pathogens from currency
• d. to integrate illicit funds into the legal monetary system