In the scenario described, which statement about Ellen's offshore wire transfer is accurate?

• A. Offshore accounts are never used for illicit activity
• B. The scenario cannot be used to infer money laundering
• C. Ellen has probably engaged in money laundering
• D. Ellen's transfer is compliant with standard banking procedures

Answer: (C)

Offshore wire transfers are a common red flag in money laundering because they enable moving funds across borders to conceal origin, often used in the layering stage to mask where money came from. When you see Ellen’s offshore transfer paired with little or no credible business purpose, unclear counterparties, or unusually rapid fund movement, it signals the kind of indicators AML programs flag for enhanced scrutiny. In that light, saying Ellen has probably engaged in money laundering fits the pattern of risk-based assessment: the transfer aligns with typical laundering behaviors and warrants further investigation, even if it isn’t proof beyond a doubt.

The other statements don’t fit as well. Offshore accounts aren’t inherently illicit—many are legitimate—so claiming they’re never used for illicit activity is inaccurate. The scenario can indeed be used to infer money laundering risk given the indicators, so saying it cannot be inferred would ignore those red flags. And assuming the transfer is compliant with standard procedures ignores the AML safeguards typically triggered by offshore activity; proper due diligence would normally be required, and lack of clear justification would argue against compliance.