Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

Why are money orders attractive to money launderers?

1. They have untraceable origins

2. They represent funds drawn on a financial institution

3. They can be easily cashed

4. They offer high value

The correct answer is: They represent funds drawn on a financial institution

Money orders are often attractive to money launderers because they represent funds drawn on a financial institution, which adds a layer of legitimacy to the transactions. This characteristic allows launderers to convert illicit cash into a more "clean" form of money by utilizing these instruments. The process generally involves purchasing a money order with cash and then using the money order for various transactions or to deposit it into bank accounts. Since money orders can be issued by banks and other financial institutions, they can facilitate the movement of funds without raising immediate suspicion, which is a crucial aspect of laundering processes. The other choices highlight aspects of money orders that can be relevant but do not capture the primary reason for their attractiveness to launderers. For instance, while some money orders may be untraceable, most can have their origins traced back to the point of purchase, rendering option A less accurate as a blanket statement. Additionally, the ease of cashing money orders is not uniformly applicable, as some financial institutions may impose restrictions. The mention of high value in option D is somewhat misleading, as money orders have limits on the amount that can be issued, which may not appeal to higher-stakes money laundering schemes.