Which statement describes a red flag related to rapid movement of funds?

• A. Dormant accounts staying idle
• B. Slow, layered transfers to avoid detection
• C. Complex corporate structures with legitimate activity
• D. Rapid movement of funds

Answer: (D)

Moving funds quickly through accounts is a red flag because it suggests an effort to obscure the money’s origin or destination. Fast, repeated inbound and outbound transfers, especially across multiple accounts or jurisdictions, can create a short or opaque audit trail, making it harder to trace illicit activity or illicit sources. This velocity often signals layering or structuring at work, where funds are rapidly shuffled to evade detection and reporting.

Dormant accounts staying idle don’t involve rapid movement, so they don’t indicate the velocity pattern AML programs watch for. Slow, layered transfers point to evading detection, but the emphasis is on slow movement rather than rapid, so they describe a different tactic. Complex corporate structures with legitimate activity can be suspicious for other reasons, but they don’t describe rapid money movement specifically.