Agent’s Compliance ManualRevised 03/2021

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DEFINITIONS Money Services Business or "MSBs" Any person doing business, whether or not on a regular basis or as an organized business concern, providing one or more of the following services:

Money orders Traveler's check Check cashing Currency dealer or exchange Store value AND Conducts more than $1,000 in money services business activity with One person In one transaction (in one type of activity) On any one day OR Provides money transfer in any amount

In other words, you do not need to register with FinCEN if you only provide MSB services as an agent of CHOICE MONEY TRANSFER. However, you do need to register if you provide other MSB services on your own behalf, such as check cashing, traveler’s checks, stored value product, or currency exchange, over a certain dollar amount (US$ 1,000.00 or more on any day for any single customer).

Because the penalties for failure to register can be severe, you should carefully review the BSA registration requirements. For more information about MSB registration requirements, please find FinCEN’s Money Guide available at http://www.msb.gov/pdf/msbprevention/guide.pdf or consult your own legal advisor.

Financial Institutions: are entities deemed by FinCEN to require compliance programs and controls against money laundering because the nature of the services they provide can facilitate money laundering. Financial institutions include money transmitters, their agents, auto dealers, pawn brokers, real estate companies and travel agencies. Therefore, financial institutions need not provide financial services in the strict sense of the word.

Money Transmitter: a person that engages as a business in the transfer of funds through a financial institution is a money transmitter and an MSB, regardless of the amount of transfer activity. Generally, the acceptance and transmission of funds as an integral part of a transaction other than the funds transmission itself (for example, in connection with a sale of securities or other property), will not cause a person to be a money transmitter.

Agent: a business that an issuer authorizes, through a written agreement or otherwise, to sell its instruments or, in the case of funds transmission, to sell and receive transfer services.Certain states require CHOICE MONEY TRANSFER to display consumer notifications/ signs in a location where they can be seen easily by your clients. If your state has such a requirement, please ensure that all required signs are posted in a location where they can be seen.

Money Laundering: is the process of disguising the existence, illegal source, or application of income derived from criminal activity to make it appear legitimate. Money laundering may be achieved by making assets appear to have been obtained through legal means; by disguising the true ownership of illicitly derived funds or assets; or by masking the intended illegal use of funds, whether legitimately or unlawfully obtained.

Suspicious Activity Reports or "SAR's"-: SARs are reports the BSA requires money transmitters to file for any suspicious transaction relevant to a possible violation of law or regulation (31 CFR 1022.320 & 1010.312). Suspicious Activity Reports Form 109 must be filed within 30 days following the discovery of certain events that render the transaction suspect.

Smurfing: occurs when a person or persons, to avoid identification or ownership of illicitly-derived funds or funds to be illegitimately used, attributes fictitious ownership of those funds or property to "straw" owners in the process of conducting a financial transaction, i.e. In money remittance companies smurfing is achieved when a person, alone or with others, visits multiple money remittance companies to send remittances in amounts which individually are just below the thresholds that would require identification, but which collectively would require reporting or identification. Smurfing can involve the use of fictitious names, addresses and phone numbers of senders and receivers.

“Cash Transaction Reports" ("CTRs"): CTRs are reports or records that money transmitters must file with the Internal Revenue Service which the government can use for criminal, tax, or regulatory investigations. 31 U.S.C. §§ 5311. Under 31 U.S.C. Section 5313. Cash Transaction Reports must be filed for transactions that result in the payment, receipt, or transfer of United States coin or currency of more than $10,000. Multiple currency transactions must be treated as a single transaction if the Company has knowledge that: (a) they are conducted by or on behalf of the same person; and (b) they result in cash received or disbursed by the Company of more than $10,000. (31 CFR 1010.313). The CTRs must be filed electronically. The agent is required to retain a copy of the e-filed CTR and to retain all the supporting evidence for five years from the date of the filing.

By law, CTRs must be filed within 15 days after the transaction takes place. Failure to file the CTR or failure to file a CTR in a timely manner may result in a civil penalty equal to the amount of the transaction (up to $100,000) or $25,000, whichever is greater, for each transaction. The fine may be levied against the Company and any Agent involved in the transaction and against a partner, director, officer or employee of the Company or its Agents. 31 U.S.C. § 5321.

b) All the Choice Money Transfer, Inc. agents must be registered with FinCEN BSA E-FILING SYSTEM at: https://bsaefiling1.fincen.treas.gov/AddUser

SECTION I - LEGAL PRINCIPLES AND REGULATIONS

Legal Principles

Although generally cash is involved in a money laundering operation, money laundering does not necessarily involve cash at every phase of the laundering process. The money laundering process involves at least three basic steps, which often occur simultaneously:

Placement: the process of placing unlawful cash proceeds, or cash to be used for unlawful purposes into traditional financial institutions. Through money transmitters the placement occurs when a remittance is placed using funds derived from illegal activities or intended to further those activities.

Layering: The process of separating the criminal origin or purpose of funds through the use of layers of complex financial transactions, such as converting cash into money remittances, travelers checks, money orders, wire transfers, stored value cards, letters of credit, stocks, bonds or purchasing valuable assets, such as art or jewelry.

Integration: the process of using an apparently legitimate transaction to disguise the illicit proceeds, allowing the laundered funds to be disbursed back to the criminal. Integration through a money transmitter occurs when illegitimately derived cash is remitted and received and later is used for legitimate purposes.

Structuring: To avoid the detection and reporting requirements outlined in the BSA, violators may to split or "structure" a transaction that would otherwise be reportable. A person "structures a transaction if that person, acting alone, in conjunction with or on behalf of others, conducts or attempts to conduct one or more transactions in currency at one or more financial institutions, on one or more days, in any manner, for the purposes of evading the CTR filing requirements." (31 CFR 1010.313). As discussed below, the CTR requirements involve reporting transactions of $10,000 or more in cash, in one day.

In "any manner" includes breaking down into smaller transactions, a single cash transaction exceeding $10,000 dollars to make it appear that less than $10,000 dollars actually were remitted or received by the same person. However, it is noteworthy that the transaction(s) need not exceed the $10,000 CTR filing threshold at anyone financial institution on any single day in order to constitute structuring. Structuring implicitly applies equally to the breaking down of transactions of $3,000 or more in cash, in one day where the breaking down of the transaction is intended to avoid providing identification of the sender or receiver.

Attempts to evade the CTR filing requirements for cash transactions that exceed $10,000 are criminal and civil violations of the BSA regulations. BSA violations under the CTR reporting requirements may result if a person:

Causes or attempts to cause a financial institution to fail to file a CTR as required under the BSA. Causes or attempts to cause a financial institution to file a CTR that contains a material omission or misstatement of fact. Structures, as defined above, or attempt to structure or assists in structuring any transaction with one or more financial institutions.

A person or institution structuring or aiding someone else to structure a transaction is subject to criminal and civil penalties. Structuring a transaction can result in civil penalties up to the amount of the transaction. Criminal prosecution and a prison term of up to 10 years, upon conviction may also result. 31 U.S.C. §§ 5323 and 5324.

Company employees and agents, and their employees, who have contact with customers have a heightened degree of responsibility in ensuring that they do not willingly or unwittingly assist in structuring a transaction. Specifically, employees must ensure that they do not advise customers to reduce the amount to be sent to avoid having to produce identification or to avoid filing a required report. Although simply informing a client about the legal reporting requirements or the Company's reporting requirement is not a violation of law, taking a transaction that the client reduces simply to make it fall below the reporting or identification requirements may be seen as facilitating the structuring of a transaction.

The BSA also penalizes persons who willfully fail to file a report on a reportable transaction or structure a transaction or assist in structuring or avoiding the filing of a report. Those violations may result in criminal fines of up to $250,000, imprisonment for up to 5 years, or both. If the violation forms part of a pattern or if it involves more than $100,000 in a 12-month period, criminal fines of up to $500,000, imprisonment for up to 10 years, or both may be imposed. 31 U.S.C. § 5322.

Because structuring is one of the tools used most by criminals to avoid detection of movements of dirty cash, it is especially important for the Company to be vigilant about structuring efforts and schemes. In particular, all staff and agents should ensure that in every case possible the beneficial owners of funds to be remitted or received are properly identified. For example, if two persons present themselves to the same establishment wishing to send two remittances to the same person, for similar amounts, employees and agents should ensure that in fact two remittances are involved, and not a single remittance broken down into two to avoid detection. In such instances, regardless of the amount, identification should be confirmed for both senders. The Compliance Department should also be alerted to the peculiar nature of the transactions.

Willful Blindness: Although most violations of the BSA occur when one intentionally and affirmatively assists or attempts to assist a customer to violate the provisions of the BSA, other, less direct, violations may occur. For example, violations may be interpreted by regulators or law enforcement if the available facts show that the Company, the agent or the individuals in charge became "willfully blind" to transactions they knew or should have known were questionable and reportable. 'Willful blindness" occurs when suspicions arise or should arise about the legality of the source of the money the company is transmitting and/or the manner in which it is transmitted, regardless of the amount, and one fails to investigate further. The failure to investigate further and the subsequent lack of reports may be key aspects of a prosecution under the BSA.

Willful blindness may also apply if the directors or employees of the Company fail to notice that the systems employed by the company are insufficient to detect and report suspicious activities. Or if they fail to notice clear signs that some of their own employees or agents may be involved in activities that violate the BSA.

Lastly, willful blindness may be alleged in instances where the company fails to equip itself with the tools required to detect and report suspicious activities. For example, a company's failure to acquire software to automatically monitor and detect transactions may become willful blindness if the sheer number of transactions processed makes it impossible to effectively monitor transactions manually. Similarly, failure to properly train required personnel, including staff and agents and correspondents, may also trigger willful blindness charges.

To avoid charges of willful blindness, then, the Company's policy is to provide to its employees and agents the tools and infrastructure necessary to monitor, detect and if necessary report activities which by their nature raise questions of compliance with the BSA, anti-money laundering and anti-terrorism laws. These tools include, but are not limited to, agent training, constant monitoring of all transactions in real time through the use of computer software, as well as constant monitoring of the compliance software itself to ensure it is functioning properly.

Legal Regulations

The Bank Secrecy Act of 1970 (P.l. 91-508): One of The principal tools used in the fight against money laundering is the Bank Secrecy Act. Among many things, the BSA imposes monitoring and reporting requirements on money transmitters. The BSA attempts to prevent the “laundering” of funds delivered from any of the approximately 200 “Specified Unlawful Activities” or (“SUA’s)” codified. (18, USC Sec. 1956 (a)).

In a nutshell, the BSA and/or its implementing regulations:

1. Require the filing of CTRs and SARs.2. Penalizes disclosures to related parties that an SAR has been filed.3. Grants money transmitters a safe harbor protection against civil lawsuits of persons on whom SARs are filed in good faith.4. Allows money transmitters to report in employment references that a termination of employment resulted from violations to the BSA.5. Require specific due diligence concerning correspondents outside the United States.6. Enumerates specific requirements to identify customers or users of the money transmitter's services. 7. Criminalizes operation of an informal money remittance business, eliminating lack of knowledge of a license requirement as a possible defense.

The provisions of the BSA and the other anti-money laundering laws are made applicable to money transmitters through regulations issued by FinCEN, which was created in April 1990.

Financial Crimes Enforcement Network or "FinCEN" is a bureau of the Treasury Department of the United States charged with drafting regulations for the Bank Secrecy Act and coordinating the enforcement of federal anti- money laundering laws. It is also the entity requiring that all money transmitters register with the federal government and retain updated lists of their agents.

FinCEN requires that all money transmitters in the United States comply with the following:

Register with FinCEN and renew the registration every two years or whenever material changes occur within the Company. Procure and maintain in good standing licenses or permits in whatever state or jurisdiction the Company receives or pays remittance orders.

Draft and retain (until production is requested) an updated list of agents processing over $100,000 in remittances in a given month.

Draft and mainten of a written BSA anti-money laundering and anti- terrorism compliance program.

Designate a Compliance Officer to administer and apply the Compliance Program

Institute a workable mechanism to monitor all transactions and report transactions subject to CTR or SAR reporting.

Train required personnel, including staff and agents, concerning the nuances of the BSA, anti-money laundering and anti- terrorism laws.

Conduct independent audits of the compliance program.

Pursuant to final rules issued by FinCEN, CHOICE MONEY TRANSFER is registered as a MSB with the Treasury Department. Re-registration is required every two years or if:

There is a change in ownership or control that requires registration under any applicable state law

A transfer of more than 10% of the voting power or equity interest is effected

A more than 50% increase in the number of agents authorized by the MSB during any registration period occurs.

MSB's must also prepare and keep available for production upon official request a list of the agents with whom the MSB transacts business. The list must show minimally:

The name, address and telephone number of the agent

The type of service or services that the agent provides on behalf of the Company

A listing of the months during the 12 months immediately preceding the date of the most recent agent list in which the agent's gross transaction amount from the sale of products or services o�ered by the Company exceeds $100,000

The name and address of the bank(s) at which the agent maintains a transaction account for all or part of the funds received from the sale of products or services o�ered by the Company

The year in which the agent �rst became an agent of the Company.

The number of branches or subagents the agent has, if any

Pursuant to the applicable regulations, the Company has designated the Compliance Officer as the person responsible for filing all registrations and re-registrations required by FinCEN. Moreover, the Compliance Officer shall be responsible for compiling the list of agents with whom the Company conducts business.

Agent Note: All agents are covered by Choice Money Transfer’s MSB registration and do not need to register independently in connection with the money remittance service offered as an agent of Choice Money Transfer, however, an agent is conducting activity or providing other MSB activities then a separate MSB registration is required for that activity.

HIFCA Program: A modification to the BSA, entitled the Money Laundering and Financial Crimes Strategy Act of 1998, requires the Treasury Department annually to issue the United States National Money Laundering Strategy. 31 USC § 5340- 5355. Under this Act, the Treasury Department must identify High Risk Money Laundering Areas every year.

The Treasury Department has complied with this requirement by designating "high-risk money laundering and related financial crimes areas" ("HIFCAs"). The HIFCA program involves the creation of national-local task forces intended to deal solely with financial crimes. With this designation the government has effectively determined that certain areas possess disproportionately high incidences of financial transactions involving dirty money and thus require closer monitoring. The first four HIFCAs are the areas of New York-New Jersey; Puerto Rico; Los Angeles, CA.; and the Southwest Border region of the United States. Two other HIFCA's have been added as a result of the 2001 Money Laundering Strategy: San Francisco and Chicago.

The BSA authorizes “Geographic Targeted Orders" ("GTOs") when necessary to carry out the purposes of the BSA and prevent evasion of its requirements. A GTO can impose additional record-keeping and reporting requirements concerning "any transaction for the payment, receipt, or transfer of United States coins or currency." (31 USC § 5326). Although in concept GTO's are valid for 180 days, under provisions of the USA PATRIOT ACT, the Treasury Department easily may renew any GTO.

Prior GTOs have permitted the federal government to require that money transmittals originating in an area or destined to be paid in a specific city or country be carried out under certain restrictive rules. For example, for a period of time the government required that customers remitting funds payable in Colombia provide identification if the amounts reach or exceed $750.

In addition to conducting traditional investigative searches of businesses and individuals, law enforcement under the GTOs and outside the GTOs conducts sting operations. During those operations government agents or persons acting at their behest attempt to conduct elicit transactions through targeted business. They do so, utilizing all means available to real launderers to determine whether the target company possesses sufficient controls to detect and report the illicit transactions. Failure to detect those transactions can invite the punitive measures of the BSA.

The USA PATRIOT ACT of 2001: Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, Public Law 107-56, enacted October 26, 2001 as a result of the September 11 attacks against the United States, provides requirements that apply directly to the operations of the Company. Many of the requirements are amendments to the BSA or other related laws.

Section 311 adds to the BSA section 31 U.S.C. 5318A entitled "Special measures for jurisdictions, financial institutions, or international transactions of primary money laundering concern." Under that Section, the Treasury Secretary may impose up to five "special measures" against foreign financial institutions or jurisdictions and transactions involving such institutions or jurisdictions. Such measures may include requiring additional record-keeping or reporting for particular transactions and additional identification of persons who use certain services from or to locations abroad. For money remittances, those requirements may include a geographic targeted order.

Section 312(a) provides requirements that initially were thought to apply primarily to banks but which FinCEN's proposed regulations made applicable to money transmitters' correspondents. The act requires enhanced due diligence procedures that are reasonably designed to detect and report instances of money laundering through the use or services of those correspondents.

Section 314 requires the Treasury Secretary to issue regulations encouraging cooperation among financial institutions, financial regulators and law enforcement officials, and to permit the sharing of information by law enforcement and regulatory authorities wish such institutions regarding persons reasonably suspected of engaging in terrorist acts or money laundering activities. FinCEN regulations allow money transmitters, with prior notification to FinCEN, to exchange information about potential money launderers or terrorists.

Section 315 of the Act adds offenses such as export control violations and foreign corruption to the list of SUA's that trigger violations of the BSA.

Section 351 indicates that the safe harbor provisions of the BSA apply to financial institutions, including money transmitters that provide information about possible violations of the BSA. It also extends the safe harbor provisions to financial institutions that provide employment references indicating possible BSA violations by the person referred.

Importantly, Section 352 provides that each money transmitter in the United States must have an anti-money laundering program at a minimum providing for:

The development of internal policies, procedures and controls The designation of a compliance officer An ongoing employee training program; and An independent audit function to test the programs

Under Section 353, violations of the BSA and its regulations apply to violations of Geographic Targeting Orders issued under 31 U.S.C. 5326, and to certain record keeping requirements relating to funds transfer

Under Section 358, the Act allows money transmitters to provide certain information requested by federal agents without violating certain provisions of the Bank Secrecy Act and the Financial Privacy Act, in the effort to protect against international terrorism.Under Section 359, all money transfer systems, licensed or not, are treated as financial institutions which are subject to the record keeping rules applicable to licensed money transmitters.

Section 351 elevates FinCEN from its previous status of a Division of the Treasury Department to a Bureau of that Department.

Lastly, Section 373 of the USA PATRIOT ACT amends 18 U.S.C. 1960 to clarify the terms of the offense stated in that provision relating to knowing operation of a money remittance business unlicensed (under state law) or unregistered (under federal law).

This section amends 19 U.S.C. 981 (a) and authorizes the seizure of funds involved in a violation of 18 U.S.C. 1960. Importantly, it removes ignorance as a defense to operation of a money remittance business without the required license.

The Office of Foreign Assets Control (OFAC): The Office of Foreign Assets Control administers and enforces economic trade sanctions against targeted foreign countries, terrorism sponsoring organizations and individuals, and international narcotics rings. (31 CFR 500 et seq.) OFAC acts through special presidential powers conferred by specific legislation to impose controls on transactions and freeze foreign assets under U.S. jurisdiction. All MSBs must comply with the laws and OFAC-issued regulations.

As a result of the attacks against the United States on September 11, 2001, the Company's OFAC obligations have come under heightened scrutiny and have gained importance. After 9/11, the U.S. Treasury Department has continually added the names of terrorists, including individuals, organizations, and countries expanding the substantially large list of persons with whom no U.S. entity can conduct business.

In general, the OFAC regulations require the blocking of all transactions with specified countries entities and individuals. They also prohibit unlicensed trade and financial transactions with specified countries, entities and individuals.

To ensure that no Company transaction is conducted with OFAC-proscribed countries, entities or individuals the Company has developed and will maintain an OFAC compliance program. Under that program, the Company:

Designates the Compliance Officer as the person responsible for day-to-day OFAC compliance.Uses software that cross-references the names and addresses of senders and recipients against OFAC's list before the remittance is paid out. The software allows for automatic updates of OFAC's list and logs all changes and inquiries made.

Whenever a name of an individual listed on the OFAC matches that of one the Company's clients, the Company will:

Verify and record the identity, address, phone and social security (if any) or tax ID number of the identified person or entity. If the match occurs with respect to a person, the Company will obtain verification of the person's date of birth.

The Company will then cross-match all the identifying information with the information available in the OFAC's most updated list. If the information obtained from the individuals or entities involved in the transactions do not correspond with the information available by the government, then the Company may release the transaction. If the information matches that provided in the OFAC list, then the Company must retain the transaction, contact OFAC at the number provided for such purposes, and follow the direction of the official call. If a confirmation cannot be made to release or retain the subject funds, by consulting the OFAC list and the details provided there, the Company will hold the funds and will seek guidance by calling the OFAC hotline and by providing the known details about the senders and remitters of the funds.

In order for a person to be released from the OFAC list, the Company will implement the following protocol:

The Company will first verify the date of birth of the individual detected.The Company will then verify the address, ID of the individual and establish that the individual is not the foreign person listed on the OFAC.

If funds ultimately are blocked, the Company will place those funds into a blocked account. As required by law, the Company will report all OFAC-related blockings within ten (10) days of the occurrence. The Company will use OFAC's Voluntary Form For Reporting Blocked Transactions located at:http://www.treas.gov/offices/enforcement/ofac/legal/forms/e_blockreport1.pdf

Annually, by September 30, concerning those assets blocked. The annual reports must be made in the Annual Report of Blocked Property (Treasury Form TO F 90-22.50). This form can be found at: http://www.treas.gov/offices/enforcement/ofac/legal/forms/td902250.pdf

Other Anti-Money Laundering Laws: In an effort to enhance the effectiveness of its provisions, Congress has made various amendments to the BSA and enacted other laws, such as the Anti-Drug Abuse Act of 1988; The Annunzio- Wylie Anti-Money Laundering Act of 1992 (PL102-550) strengthened penalties form financial institutions found guilty of money laundering. Make it federal crime to operate an illegal money transmitting business; The Money Laundering Suppression Act of 1994 (Title IV of the Riegle-Neal Community Development and Regulatory Improvement Act of 1994, and others

SECTION II - CHOICE MONEY TRANSFER’S COMPLIANCE PROGRAM

One of the principal tools used in the fight against money laundering is the Currency and Foreign Transactions Reporting Act, also known as the Bank Secrecy Act ("BSA") 31 USC §§ 5311- 5330 and 12 USC §§ 1818(s), 1829(b), and 1951-1959; the BSA's implementing regulations, 31 CFR 1010. Among many things, the BSA imposes monitoring and reporting requirements on money transmitters. The BSA attempts to prevent the "laundering" of funds derived from any of the approximately 200 "Specified Unlawful Activities" or ("SUA's") codified. (18, USC Sec. 1956 (a)).

Under 12 CFR 21.21, all MSB's must develop, administer, and maintain a program that ensures and monitors compliance with BSA and its implementing regulation, including record keeping and reporting requirements. The USA Patriot Act requires that all MSBs adopt a written anti-money laundering program that is reasonably designed to ensure proper record keeping and reporting of certain transactions, and to prevent from being used to launder money.

At a minimum, a money remittance’s internal compliance program must be written, approved by the board of directors, and noted as such in the board meeting minutes. The program must include those items outlined in Section 352 of the BSA and referenced in this handbook in Section I.

CHOICE MONEY TRANSFER, administers and maintains a program that ensures and monitors compliance with BSA and anti- terrorism regulations, including record keeping and reporting requirements. The program includes:

a.Internal Policies, Procedures and Control: CHOICE MONEY TRANSFER’s Board of Directors is responsible for ensuring an effective system of internal control for BSA, including suspicious activity reporting, and must demonstrate its commitment to compliance by:

Establishing a comprehensive program and set of controls for: verifying customer identification, monitoring all transactions, filing all necessary reports, creating and retaining records and responding to law enforcement requests.

Instituting a requirement that the Board of Directors be kept informed of compliance effort, audit reports, identified deficiencies, and corrective action taken. In other words, the internal control system must enable the Board of Directors to ensure ongoing compliance.

Making BSA and anti-terrorism compliance a condition of employment.

Incorporating compliance with the BSA and anti-terrorism regulations into job descriptions and performance evaluations of the company personnel.

Allocate sufficient resources for compliance.

Agent Note: Adoption of a Written BSA/AML Program

The Agent must develop and adopt written policies and procedures, which are periodically reviewed and updated, as necessary, but at least on an annual basis, to ensure that they are current and in compliance with all applicable federal and state AML laws and regulations.

b. Independent Testing of Compliance: the Company’s auditors should be able to:

Assess the overall integrity and effectiveness of the Company’s compliance program, management system and internal controls and procedures that insure compliance with applicable BSA laws and FINCEN and OFAC regulations.

Test Transactions to ensure the company is following prescribed regulations.

Assess employees’ knowledge of regulations and procedures.

Assess adequacy, accuracy and completeness of training programs.

Assess adequacy of the company’s process and the automated anti-money laundering and OFAC detection systems for identifying suspicious activity.

Agent Note: No later than every two years, the Company must undergo periodic review of its anti-money laundering compliance program. The independent review function must be performed by a qualified professional or a properly trained management-level employee within the Company, so long as the reviewer is not the Company’s designated Compliance Officer, and is not otherwise responsible for regular administration or maintenance of the compliance program.

c. Designated Compliance Officer: CHOICE MONEY TRANSFER has designated a qualified employee as its compliance officer, who has day-to-day responsibility for managing all aspects of the BSA compliance program, and compliance with all BSA, anti- money laundering and anti-terrorist regulations. The compliance officer may delegate certain compliance duties to other employees, but not compliance responsibility.

Pursuant to the authority contained in the Corporate Resolution approving this Compliance Program, the compliance officer shall have sufficient authority and resources to administer effectively the BSA and anti-money laundering compliance program. The Compliance Officer shall act independently of all other departments and divisions and shall report directly to the Board of Directors of the Company. The Compliance Officer is authorized to take all steps required to ensure complete compliance with the applicable anti-money laundering requirements.

The Compliance Officer has oversight of the Compliance Department and reports solely to the Board of Directors. The Compliance Department will have complete and unilateral authority to examine, monitor, suspend, terminate and report any transaction or activity that violates the provisions of the BSA and the anti-money laundering laws and the compliance commitment of the Company.

The Compliance Officer is responsible for maintaining updated knowledge of compliance issues, laws and regulations that affect the company. The Compliance Officer is also responsible for applying those legal principles to all aspects of the Company where a laundering risk exists.

Among its many duties, the Compliance Officer must:

Monitor all transactions to detect suspicious or otherwise reportable patterns and traits pursuant to anti-money laundering and OFAC requirements

Insure proper agent selection, training and maintenance in accordance with the Company's anti-money laundering policies

Insure proper correspondent selection, training and maintenance in accordance with the Company's anti-money laundering policies

Advise the Company as to the best means to monitor transactions to comply with FinCEN and OFAC requirements and all other transaction monitoring obligations

Provide reports to CEO and Board of Directors concerning effectiveness of the Company's compliance program

Maintain updated knowledge about anti-money laundering compliance developments

Respond to official government inquiries concerning compliance issues

Filing all registrations and re-registrations required by FinCEN

Compiling the list of agents with whom the Company conducts business

The compliance officer must provide the following reports to the president and, if appropriate, to the employees of each department at the Company: Quarterly Reports with a summary of the compliance department’s activities during the previous quarter outlining; and End of Year Report. Concurrent with the closing of the fiscal year of the Company, the Compliance Officer shall present to the CEO a summary of all BSA compliance-related transactions and activities carried out during the fiscal year.

Ensure that all statutorily required signage is prominently displayed at the Agent Location. The signage which may vary depending on the State in where the Agent generally will identify the agent as an authorized agent of CHOICE MONEY TRANSFER and will provide details of the State Regulator including phone number for customer inquiries and complaints. This signage will be provided by CHOICE MONEY TRANSFER upon activation on the agent.

Agent Note: Appointment of a Compliance Officer

The Agent must appoint a Compliance Officer who is responsible for maintaining the AML Program on a day-to-day basis. The duties and responsibilities of this position should include:

1. Ensuring that the Company files, reports, and creates and retains records, in accordance with the BSA.

2. Ensuring that the Company’s compliance program is updated as necessary to reflect current requirements of the BSA.

3. Ensuring that the Company maintains and effective, ongoing employee training program, including training on identification of suspicious activities.

4. Ensuring that all suspicious transactions are properly investigated, and, where appropriate, reported on behalf of the Company.

5. Ensuring that all SARs on behalf of the Company are accurate, complete, and filed in a timely manner.

6. Monitoring customer verification procedures and record keeping for customer transactions.

7. Effectively implementing and administering the Company’s risk-based transaction monitoring and filtering progra

8. Ensuring that the Agent’s compliance program is the subject of periodic independent examinations.

9. Ensuring that all deficiencies noted by independent examination are properly rectified.

10. Maintaining on file the Company’s compliance manuals, and additional BSA compliance materials and files as they are updated by the Company.

11. Reporting to Choice’s Compliance Department any suspicious activity related to attempted or processed remittance transactions.

d. Compliance Committee: CHOICE MONEY TRANSFER has appointed a Compliance Committee, which monthly meets quarterly to the effectiveness of the Company's compliance program.

e. Employee and Agent Training Program: CHOICE MONEY TRANSFER must ensure that company personnel and agents are trained in all aspects of the regulatory requirements of the compliance and anti-money laundering policies and procedures. The Company will train and evaluate appropriate employees and agents in all aspects of the regulatory requirements of the BSA and the Company's internal BSA compliance and anti-money laundering policies and procedures.

Employee Training: Employees shall be trained in compliance initially when hired, and subsequently as their job duties require. All employees shall receive training and updates on a yearly basis.

Agent Training: The Company shall provide BSA and anti-money laundering information and training to all of its agents. The training shall be updated at the year of the onboarding and every anniversary year. Additionally, the Company shall provide to all agents a copy of the Agent Compliance Manual and others relative materials.

The training program shall ensure that:

All company personnel, including senior management, who have contact with customers (whether in person or by phone), who see customer transaction activity, or who handle cash in any way, receive appropriate training.

Training is ongoing and incorporates current developments and changes to the BSA, anti-money laundering laws and FinCEN regulations.

New and different money laundering schemes involving customers and money transmitters are addressed.

Training includes examples of money laundering schemes and cases, tailored to operations of the employees and agents in attendance, and the ways such activities can be detected or resolved.

Training focuses on the consequences of an employee's failure to comply with established policy procedures (e.g. fines, termination, and incarceration).

The program provides guidance and direction in terms of the Company's policy and available resources, including direct contact information to the Company's compliance officer.

Agent Note: CHOICE MONEY TRANSFER will fully train its agents: CHOICE MONEY TRANSFER recognizes that the vast majority of transactions processed through its system originate at an agent location. No agent will be given permission to start accepting remittances until the Company’s Compliance Officer is satisfied that the agent is ready and capable of fulfilling his/her compliance duties. After the initial training period, the Company’s compliance department will continue to provide the agent with support and updates as need arise.

The agent must train new employees: The CHOICE MONEY TRANSFER compliance department will maintain a list of all agents that have been trained and approved to process remittances. Each agency shall have its own Designated Compliance Officer to train its new employees in BSA and Anti-Money Laundering regulation.

SECTION III - KNOW YOUR CUSTOMER POLICY

All anti-money laundering programs should begin and end with this principle: Know your customer. Knowing your customer and other parties with whom you engage in transactions is the single most important rule for preventing and detecting money laundering. Much of the goal of money laundering is to obscure the true ownership and control of the proceeds by keeping the identity of the other party hidden. In the financial community, knowing your Customer translates into substantial requirements for gathering information about and fact-checking the identity of clients.

Procedures for getting to know your customer: Implicit in all BSA requirements is the obligation that money transmitters “know” not only their customers but also anyone the Company employs or with whom the company transacts business or employs, including the Company’s directors, officers, employees, agents, and correspondents.

a) Knowing your Directors, Officers and Employees: The Company and each of its employees and officers have a continuing obligation to "know" that no co-workers or officers are engaged in activities that violate the anti-money laundering controls of the Company. The failure of the Company to notice that an employee, officer or director displays characteristics incompatible with the Company's compliance may prove to be a violation of law.

b) Knowing your Agents: Agents represent the largest compliance risk for money transmitters. Agents can facilitate the laundering of funds simply by misapplying the knowledge they earn or using their privileged position as insiders of a Financial Institution. Because of the ever-present risk that agents may willingly or unwittingly assist in the laundering of funds it is imperative that the Company maintains a strict policy of "knowing" its agents before those agents are contracted.

After they are signed as agents the Company has a continuing obligation to know how the agent is discharging its regulated, fiduciary role. Equally as important is the process through which the Company terminates the agency relationship. In summary then, with respect to agents, the Company has a three-fold responsibility: in contracting agents; supervising and training agents while they are active; and termination.

Know Your Customer (KYC) – is the obligation all financial institutions have to know the true owner of the funds, to verify the identity of those owners and conductors by seeing and recording valid ID, to obtain, record and verify other pertinent information and, finally, to verify that those funds are lawfully derived and intended; KYC starts with ID, but does not end there. Verified and legitimate sources of income must be commensurate with the amounts being sent, if the amount is $3,000 or greater. Documenting source of funds may involve business cards, occupational licenses, pay stubs, documented calls to the employer, etc. Bank statements are sometimes useful. Additional time may be needed for verification.

Contracting Agents: In contracting an agent, the Company has an implicit responsibility to know that the agent, as extensions of the Company, is worthy of being entrusted with the funds remitted by the Company's customers. Second, the Company must ascertain that the agent will not willingly or unwittingly engage in activities that result in BSA violations.

To meet its first responsibility, the Company has adopted a policy to conduct enhanced due diligence reviews on its potential agents prior to signing contracts with those entities. When possible, the Company will:

Conduct credit checks on the agent-company and its principals. The check could be generic credit checks or industry specific, if such information is available.

Inquire whether any of the principals has pending or resolved criminal convictions.

Get commercial and bank references.

Check agent against OFAC list.

Conduct a visit to the agency and request a copy of the lease and a bill (telephone, electricity, etc) in the name of the company or the owner.

Conduct periodic updates of the above information.

To comply with its second responsibility that agents will comply with the anti- money laundering and BSA requirements, the Company will instruct and train its agents about the Company's policy to ensure that they are aware of the legal requirements imposed by the BSA and other anti-money laundering laws and the latest schemes used to launder money through businesses such as the Company. In further fulfilling its obligations the Company may also periodically stress test the agents' knowledge and application of BSA and anti-money laundering principles. Independent testers may be used to ensure compliance. Tests will be conducted without the prior consent or knowledge of the agent.

Moreover, the Company will advise agents to contact the Compliance Officer concerning all BSA and anti-money laundering related issues or questions. A direct line of communications must always be maintained between the agents and the Compliance Department to ensure complete adherence to the Company's compliance policy.

Supervising and Training Agents: Upon successfully scrutinizing the agent, the Company's responsibility then turns to successfully managing that agent. While the agent is authorized to either receive or pay remittances on behalf of the Company, the Company has a responsibility to ensure that the agent is doing so without violating the law. As the gateway to the Company's financial services infrastructure the agents play a pivotal role in ensuring that the Company is not used as a conduit for laundering of funds.

Terminating Agents: The process for terminating an agent is as important as the hiring and the supervision of agents. Usually, the termination of agents results in a report being made on a quarterly basis to NMLS Resource Center (is the official gateway into the Nationwide Multistate Licensing System & Registry). The Agent on boarding team Compliance Officer is charged with timely and effectively completing the report communicating this information to those entities.

Additionally the Compliance Officer must ensure that the agent is removed from the list of currently active agents, which the Company must maintain pursuant to FinCEN regulations. Importantly, the Compliance Officer must take care to keep the agent's corporate and personal information for at least 5 years from the time of termination.

From a practical perspective, the termination process ends with the Company's collection of all outstanding, unused receipts and any statutory and signage if applicable bearing the Company's name. Depending on the specific circumstances of the termination, and often-State law or regulation, the Company may provide written notification of the agent's termination to all users of the Company's services who used that agent in the previous year. This would provide notice to those users that the Company's relationship with the agent is officially ended.

c) Knowing your Customers: Knowing a customer involves more than just knowing a name. In fact, the knowledge required is a different kind of knowledge. In one sense, for transactions of $3,000.00 or over, it involves verifying the name of the person placing a remittance order, his address, his phone number, and documenting the person's identification. In those instances the Company must be able to prove by documentary information that it knows the customer. For transactions not requiring verification of identification the Company still has an obligation to know that the transaction of each customer falls under the parameters of a normal transaction. If the transaction falls outside those parameters of normalcy, then the Company must conduct a due diligence review of that transaction to verify that although not average, the transaction's singularity has a reasonable, non- reportable explanation. In effect the Company must be able to match the customer to the transaction. The company must find a "fit" between the two.

Where satisfactory identification is required to be recorded, the Company should request documents sufficient to (a) to identify the customer and (b) verify the customer's current address.

To identify the customer the Company should obtain a driver's license with a photograph, a U.S. passport, or alien registration card, or a foreign passport. Secondary documentation may include college or school i.d. card, a major credit card (verify the current status) and an employer i.d. card. A "matriculate" issued by the Mexican consulate or other consulate in the U.S. may also be used as valid identification.

To verify the person's address the Company may require a valid driver's license, and a current utility bill or some other official (contemporaneous) mail bearing the customer's address.

To fit the transaction to the customer, the Company or its agents can take a number of other measures. For example, the person taking the remittance order should verify that the address and the area code of the phone number provided correspond to the same city, county, or other geographic demarcation. Moreover, if a mobile phone is provided, a more permanent number should be requested, although by itself a mobile phone does not render the transaction reportable or illegal. Other measures include:

Consider the proximity of the customer's residence or business to the address of the branch or agent. If the address seems inconvenient or too distant, the Company should inquire why the person had not used a more convenient location to originate the remittance.

Call the business or home phone number provided by the customer to verify accuracy. If a mobile phone or pager number is provided, the Company must inquire further why no stationary phone is given.

SECTION IV - PROCESSING TRANSACTIONS

1. Required documentation:All required documentation must be obtained for every transaction processed by the Company or its agents. Such documentation must be attached to and stored with the invoice of the transaction in a separate folder where all other such documents must be kept. These records should be arranged chronologically and must be produced in the event of inspections by state or federal officials as well as the Company’s compliance personnel.

Transactions will not be processed if they don't comply with the Company’s document requirements. Failure to provide such documentation may indicate suspicious activity and should be reported to the compliance department of the Company.

To comply with the Company's "Know Your Customer" policy and the regulations, is the responsibility of the agent to obtain and retain all the information and documentation pertaining to the transfer.

a) For all transactions: Full name of the sender Full address of the sender, including Street address, Apartment Number, City, State and Zip Code Telephone number of sender The date the transaction If is available the Full name of receiver If is available the Full address of the receiver including Street address, City and State or Country Telephone number of Receiver The amount of the funds transferred Fee paid by remitter Exchange rate, if paid out in local currency Method of payment CMT’s correspondent located in the foreign country Receiver's bank account number and name on the account, bank name and branch, (if funds are to be deposited into account) Signature of sender Signature of cashier

b)“On-behalf-of” TransactionsRemember, a customer can send a friend or family member to do the transaction. There is nothing wrong with that. Normally, we assume that the person conducting the transaction is the owner of the money. But if the customer gives you any indication the money belongs to someone else, and the amount is over any of our thresholds, then we must collect all required information for the true owner of the funds (the sender) and the conductor of the transaction.

If the conductor of the transaction protests, “But it’s not my money; why should I give you my ID?” you may correctly respond that it is the law. We must verify that this is not an elaborate attempt to disguise the true ownership of the money (maybe it really does belong to the conductor). The only way for the conductor to prove this is not the case, is to willingly show his ID.

Our software only has room for sender information. If conductor and sender are two different people, you must send us the required conductor information by fax, for our records.

Please Note: in case a refund is required, we may only refund the money to the sender whose name appears on the receipt, and ID will be required. If the conductor has identified himself clearly, as described above, refund may be made to either the Sender or the Conductor. So it is to their advantage, ultimately, to tell the truth.

c) For transactions involving $2,500 or more in one day, excluding all fees and commission, or a lesser amount if the company has institutes a lower threshold, it is the responsibility of the agent to obtain and record, in addition to the information mentioned above, copies or electronic records of the following:

Copy of a valid picture identification card (government-issued identification)

A copy of the completed “Compliance Form for Transactions of $2,500 and over”. Before processing any transfer of $2,500 or more, this Form must be processed with all the required information and faxed to Choice Money Transfer's Compliance Department, together with copies of the identification documents. NONE OF THE INFORMATION REQUESTED IS OPTIONAL. FAILURE TO COMPLETELY FILL OUT THE FORM WILL RESULT IN A DELAY IN PAYMENT UNTIL WE HAVE OBTAINED ALL OF THE INFORMATION REQUESTED. TRANSACTION ON HOLD OVER 48 HOURS WILL BE REJECTED (EXCEPT ANY TRANSACTION THAT MATCHES THE OFAC LIST)

CF Form must be processed with all the required information and review by compliance. It is obligatory that the customer provides a social security number or Individual Taxpayer Identification number, if this cannot be provided the customer can present a passport and the passport number will be annotated (country of issue and an annotation should be made to that effect)

If the transaction is to be performed by a party on behalf of someone else, the information of both parties must be obtained, recorded and maintained.

Valid picture identification is one that is issued by a government body, has a picture of the individual and has NOT expired. Some examples of valid identifications documents are:

State driver's license with photo. ID from Motor Vehicles U.S. Alien Registration Card Passport (and issuing country if non-U.S. passport) Certificate of citizenship Military card issued by a Branch of the Armed Forces Cedula Matricula Consular, Credencial Electoral (for Mexicans). Cédula de Identidad Matrícula consular To Colombia: For transactions between US$ 2,000.00 and US$ 2,999.00 we require a copy of the sender’s valid government identification and all information necessary to complete our internal Bank Secrecy Compliance Form.

All required documentation must be obtained for each transaction conducted by a customer. The documentation must be attached to and stored (for five years from the transaction day) with the invoice of the transaction in a separate folder where all other such documents must be kept. These records should be arranged chronologically and must be produced in the event of inspections by state or federal officials who have the right to visit and inspect your records at any time.

d) For transactions involving US$ 3,000.00 or more in one day, including all fees and commission, it is the responsibility of the agent to obtain and record (for five years from the transaction day), in addition to the information mentioned above, copies or electronic records of the following.

Copy of a valid picture identification card (government-issued identification)

A copy of the completed “Compliance Form for order of US$2,500.00 and over”. Before processing any transfer of $5,000 or more, this Form (See attached copy) must be processed with all the required information.

In cases when the customer is not a resident alien of the United States and does not have a social security card, a copy of the sender’s a valid passport

e) A document evidencing the source of funds bank statement, salary stub and any document that evidence the income of the funds For transaction or transactions involving $10,000 or more, including the commission, it is the responsibility of the agent to obtain and record (for five years from the transaction day), in addition to the information mentioned above, copies or electronic records of the following:

The completed form 104 (CTR’s)

The Completed Compliance Form for order of US$ 2,500.00 and over.

Copy of a valid picture identification card (government-issued identification

A document evidencing the source of funds (i.e. bank statement, salary stub)

Copy of the Social Security Card or taxpayer identification number of the sender. In cases when the customer is not a resident alien of the United States and does not have a social security card, a copy of the sender’s a valid passport

Date of Birth and Nationality

Address and telephone number of the sender's place of work

Occupation of the sender

The form 104 and the Compliance Form must be processed with all the required information and faxed to Choice Money Transfer's Compliance Department, together with copies of the identification documents.

Please note that the Company’s Compliance Officer must be notified before an agent accepts a transaction of $ 10,000 or more. All required documentation must be obtained for each transaction conducted by a customer. The documentation must be attached to and stored (for five years from the transaction day) with the invoice of the transaction in a separate folder where all other such documents must be kept. These records should be arranged chronologically and must be produced in the event of inspections by state or federal officials who have the right to visit and inspect your records at any time.

f) For transactions that will cause the aggregated amount sent by the sender or received by the receiver, including fees and commissions, to equal or exceed $3,000 over a 15 day period, documentation as outlined in paragraph (c) of this section will be required.

g) For transactions that will cause the aggregated amount sent by the sender or received by the receiver, including fees and commissions, to equal or exceed $6,000 over a 60 day period, documentation as outlined in paragraph (d) of this section will be required.

CHOICE MONEY TRANSFER reserves the right to require ID, the Compliance Form and/or additional documentation even on those cases that the transaction amount is less than $ 2,500.00.

h) For transactions that will cause the aggregated amount sent by the sender or received by the receiver, including fees and commissions, to equal or exceed $20,000 over a 183 day period (half a year), copies or electronic records of the following will be required:

The Completed Compliance Form for order of US$ 2,500.00 and over. Copy of a valid picture identification card A document evidencing the source of funds (i.e. bank statement, salary stub) In cases when the customer is not a resident alien of the United States and does not have a social security card, a copy of the sender’s a valid passport Address and telephone number of the sender's place of work Occupation of the sender

i) Please be advised that certain countries and territories where CHOICE MONEY TRANSFER makes payments have their own Anti-Money Laundering requirements that may limit the size of a single transaction and/or require identification and other information at monetary thresholds that differ from those in the United States. CHOICE MONEY TRANSFER will provide updates and amendments to this manual as there changes occur. Listed below are the compliance requirements for some of the foreign jurisdictions where CHOICE MONEY TRANSFER makes payments:

j) To Colombia transactions between US$ 2,000.00 and US$ 2,999.00 we are required to obtain a copy of the sender’s valid government identification, all information necessary to complete our internal Bank Secrecy Compliance Form.

2. Reports

The following are Banks Secrecy Act ("BSA") forms that are applicable to the Agent:

a) Currency Transaction Report or 104 Form ("CTR"):Cash Transaction Reports" ("CTR's"): CTRs are reports or records that money transmitters must file with the Internal Revenue Service which the government can use for criminal, tax, or regulatory investigations. 31 U.S.C. §§ 5311. Under 31 U.S.C. Section 5313. Cash Transaction Reports must be filed for transactions that result in the payment, receipt, or transfer of United States coin or currency of more than $10,000. Multiple currency transactions must be treated as a single transaction if the Company has knowledge that: (a) they are conducted by or on behalf of the same person; and (b) they result in cash received or disbursed by the Company of more than $10,000. (31 CFR 1010.313). The CTRs must be filed electronically. The agent is required to retain a copy of the e-filed CTR and to retain all the supporting evidence for five years from the date of the filing.

When a customer makes a cash transaction of $10,000.00 or more then the agent is obligated to submit a CTR. If the transaction involves sending funds through two or more money remitters then in addition to filing a CTR the agent must also send a copy of the CTR to the Compliance Department at Choice Money Transfer, Inc.

A The agent begins by accessing bsaefiling.fincen.treas.gov and creates a user name (email address) and subsequently received a link confirming reception of the filing by email. Then he/she enters the original site and fills out the CTR form.

Following are example of situations that requires the filing of a CTR:

Example 1: A customer brings cash currency on several occasions to one or more offices of the same Agent, during the same day, in smaller amounts that all together sum more than $10,000 and he/she requests that the money has to be sent to different beneficiaries. At the end of the day the Agent discovers that the transfers (including the commissions) totaled more than $10,000 during the day. The Agent must file a CTR informing the multiple transactions that have happened and a SAR should be processed.

Example 2: A customer sends $2,500 to his/her sister in Senegal and he/she requests from the agent other unrelated services (example. money orders) that sum $8,500. Therefore, as all those cash transactions were carried out by the same customer, in the same day and in cash, and combined they total more than $10,000, the Agent must file a CTR informing both transactions.

Example 3: The Agent sees two customers enter his/her premises together; they are speaking to each other. Each customer gives the Agent an amount smaller than $10,000 in cash money and they request to send orders to the same beneficiary. Together both transactions exceed $10,000. If the Agent concludes that a premeditated or suspicious transaction is happening, the agent should not complete the transactions, and the agent should follow the procedures (SARs). If the Agent determines that the transactions are not premeditated or suspicious, he/she can complete the transactions. If the Agent determines that the transactions are going on behalf of the same person, a CTR should be filed reporting the transaction.

Example 4: The Agent sees a customer giving cash to two other customers outside of the Agency. The two customers give the cash to the Agent and they ask him/her to send transfers, each one are less than $10,000, but which in the aggregate exceed $10,000. The transfers are sent to different people in the same city. If the Agent concludes what is taking place is a premeditated or suspicious transaction, the agent should not complete the transaction, and he/she should process a SAR. If the Agent determines that the customers are acting on behalf of the same person, example, the person that gave them the money, the Agent should also file a CTR.

Example 5: Four customers that apparently don't have a relationship to each other, pick up a transfer of money individually paid cash by CHOICE MONEY TRANSFER. No payment exceeds $3,000, but the aggregate exceeds more than $10,000. The Agent pays the four customers individually. Subsequently the Agent determines that the four customers were receiving the transfer on behalf of the same person, the agent must file a CTR, also, if the Agent concludes what is taking place is a premeditated or suspicious transaction, he/she should process a SAR.

Example 6: A customer receives $2,500 in cash as a payment for a CHOICE MONEY TRANSFER's order. At the same time, the customer cashes a check of $8,000. Because the Agent is paying more than $10,000 to the same customer, he/she should file a CTR reporting both transactions.

Suspicious Activity Reports or "SAR's":SARs reported to the BSA require money transmitters to file for any suspicious transaction relevant to a possible violation of law or regulation (31 CFR 1022.320 & 1010.312). Suspicious Activity Reports Form 109 must be filed within 30 days following the discovery of certain events that render the transaction suspect. SARs must be filed electronically.

It is a federal crime to try to hide or cooperate in a premeditated transaction whose purpose is suspected as illicit, including agents or employees that are seen as intentionally turning "a blind eye" to obviously suspicious activity.

“Suspicious activity” is a difficult concept to define because it can vary from one transaction to another based upon all of the circumstances surrounding the transaction or groups of transactions. For example, transactions by one customer may be normal because of your knowledge of that customer, while similar transactions by another customer may be suspicious. That is why it is important for you to read this guide in order to help you detect suspicious activity and structured transactions. The federal government requires that a Suspicious Activity report be filed by money services business, for any transaction - or pattern of transactions - that is attempted or conducted, that you know, suspect, or have reason to suspect:

1. Involves funds derived from illegal activity or is intended to hide funds derived from illegal activity;2. Is structure to avoid record keeping or reporting requirements?3. Has no business or apparent lawful purpose

You should retain a copy of the SAR-MSB and all original supporting documentation or business records (including copies of instruments, receipts, photographs, surveillance audio or video tapes, etc.) for five years from the date of filling the SAR-MSB. All supporting documentation must be made available to appropriate authorities upon request. An SAR_MSB report be type or legibly handwritten.

Federal law provides protection from civil liability for all reports of suspicious transactions made to appropriate authorities, including supporting documentation.

Examples of suspicious activity:

Example 1: Jim sends a $600.00 money transfer. The next day Jim sends $9,400 to the same person. Jim may be structuring his transactions in order to avoid the CTR reporting requirements. You should consider whether a CTR and\or and SAR should be filed.

Example 2: Jim says that he wants to send an $11,000.00 money transfer that he wants to pay in cash. When you tell Jim that you will need to complete a CTR he says he no longer wants to do the transaction, or ask how he can avoid having a CTR file on the transaction. You must file an SAR on the transaction or attempted transaction and you must never instruct the customer on how to avoid a CTR.

In all cases when an agent believes that the customer is trying to avoid showing ID or attempting to structure a SAR must be completed by entering the Fincen website (bsaefiling.fincen.treas.gov) and completing the Fincen SAR form.

Telephone calls to the IRS: If the transaction or activity is being reported on a SAR appear to be part of an ongoing plan, the agent must proceed to notify by phone the Internal Revenue Service (IRS) (or calling to the IRS/Criminal Investigation Division office or the IRS hotline number 1-800-800CTRS) and should call the CHOICE MONEY TRANSFER's Compliance Department.

IMPORTANT: TITLE 31 OF THE SUSPICIOUS ACTIVITY REPORT EMPHASIZES THAT neither the Agent or their employees, neither CHOICE MONEY TRANSFER and their representatives can notify the customer that a SAR is being processed. (The preparation and filling of this form is strictly confidential).

CTRs, SAR-MSBs, and other records and reports are only as good as the information you provided. Therefore, it is very important that the information that you provided on such reports is accurate and complete. This is your responsibility. The Government and law enforcement agencies depend on this information as they fight against money laundering and terrorism.

c) Report to Office of Foreign Assets Controls" or "OFAC:Under the U.S.A PATRIOT ACT of 2001 and the Treasury Department's Office of Foreign Assets Control ("OFAC") Rules and the Executive Orders Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten To Commit, or Support Terrorism, issued under the International Emergency Economic Powers Act, you have to submit a Report to Office of Foreign Assets Controls" or "OFAC with any transaction originated by or payable to a proscribed individual, company, entity or country. If a money transmitter discovers any transaction originated by or payable to a listed entity, the company has to block the transaction, retain the funds and within 10 days call the OFAC hotline and place the retained funds in a separate escrow-type account. Each November, the company must report to OFAC a listing of any property retained.

If CHOICE MONEY TRANSFER confirms that the individual is a SDN or SDGT then the compliance officer will immediately file a report with all supporting documentation.

Report of Blocked TransactionReport of Rejected TransactionAnnual Report Form TD F 90-22.50

3. Record-KeepingFinancial institutions located in the United States, including money transmitters and their agents, must create record keeping files for the anti-money laundering program. These filers can then be readily accessed if your business is examined/audited by a state or federal regulator. In addition to files containing the information described above, you should have files that clearly labeled and contain the following:

A copy of this guide in a file labeled “Anti-Money Laundering Compliance Program” along with any other compliance guides you may receive form other vendors, trade associations, accountants, lawyers, etc. This file should also contain a copy of the complete “Certification” form shown in appendix/forms.

Multiple copies of the SAR-MSB form shown in appendix 2 in a file labeled “SAR-MSB’. This also is where you should maintain a copy of any SAR-MSBs form that you file, along with any supporting materials. For CTRs, do the same as for SAR-MSBs,

A file for any OFAC report you submit, and material you receive regarding OFAC or Executive Orders.

A file containing updated information you receive from regulators or law enforcement agencies regarding money laundering or terrorism.

All records must be retained in original, microfilm or any other form of reproduction.

All the records must be retained in an accessible location and retrievable in a reasonable period of time for inspection. All the records of money transfers should be filed by day, in numerical order.

THE RETENTION PERIOD FOR ALL RECORD REQUIRED TO BE KEPT UNDER THE BSA REGULATION IS FIVE YEARS. Detailed descriptions of these and other record keeping requirements can be found in 31 CFR 1010.

Safe Harbor Protection: In addition to imposing responsibilities on money transmitters, the BSA and the USA PATRIOT ACT also provide that the filing of an SAR confers on the Company "safe harbor" protection against civil lawsuits by parties on whom reports are filed. 31 USC § 5318(g)(3). However, the filing of an SAR does not shield the Company against prosecution by any government entity. To ensure that the civil protection attaches, a written SAR must always be filed, even on transactions verbally reported to specific government agencies in cases requiring immediate government attention.

4. Monitor of all Transactions.The Company is required to monitor all financial transactions processed through its systems. The purpose of such monitoring is to develop an understanding of the normal transactions conducted by the Company to enable easy detection of anomalous transactions.

Although the monitoring conceivably may be done by hand, a manual system may be an inadequate tool to detect possibly illicit transactions. A money transmitter's lack of investment in an effective monitoring system may be interpreted as a willful failure to effectively monitor suspicious transactions, especially when the number of transactions involved is high.

To achieve full compliance with this requirement, the Company has acquired and implemented a software program that automatically monitors all transactions and flags transactions that fall within the OFAC requirements or which meet criteria that indicate possible anti-money laundering or anti-terrorism violations.

CHOICE MONEY TRANSFER Software (SMA SYSTEM) automatically aggregates transactions by senders, receivers, identifications numbers, addresses and phone numbers; With SMA SYSTEM’s compliance reports the user can track orders by city and country of origin and destination.

In addition to the use of automated software, the Company's Compliance Department is instructed to manually monitor transactions and patterns that may pose a compliance risk to the Company.

Suspicious Activity Reporting

A transaction is suspicious and must be reported if the Agent knows, suspects or has reason to suspect that the transaction or transactions:

Involve funds derived from illegal activity or are intended or conducted in order to hide or disguise funds or assets derived from illegal activity.

Designed to evade the requirements of the Bank Secrecy Act – Funds Transfer Rule, whether through structuring or other means.

EXAMPLE: A customer conducting a large cash bill payment transaction attempts to bribe an MSB employee not to file a CTR or attempts to get the MSB employee to break down the transactions into smaller amounts.

Serves no business or apparent lawful purpose, and the Agent knows of no reasonable explanation for the transaction after examining all available facts.

EXAMPLE: An unemployed mason makes bill payments to a credit card in amounts just under the reporting threshold, several times in a month. The consumer is paying fees to process each of these small payments instead of paying the credit card bill once per month.

Involves use of the Agent to facilitate criminal activity.

Some red flags of suspicious activity may include:

A consumer uses a false IDTwo or more consumers use similar IDsA consumer alters a transaction upon learning that s/he must show IDA consumer alters the spelling or order of his/her full name.A consumer conducts multiple bill payment transactions just below relevant thresholds.Two or more consumers work together to break one transaction into two or more smaller transactions in order to evade the BSA reporting or recordkeeping requirement.A consumer uses two or more locations or cashiers on the same day in order to break one transaction into smaller transactions and evade the BSA reporting or recordkeeping requirement.A consumer refuses to provide consumer identifying information when required by the Company or BSA requirements.A consumer offers bribes or tips tellers in exchange for not filing appropriate forms or processing transactions in a certain manner.A consumer admits to criminal conduct.Tellers who are processing a lot of personal bill payment transaction

Capture of Funds Transfer Information

The Choice Money Transfer SMA software is programmed to capture the required Funds Transfer information at the point-of-sale. Tellers are prompted to enter the information into screens that appear during the transaction. The captured customer information is transmitted to Choice Money Transfer at the end of the day.

SECTION V - CONVERSATIONS WITH CUSTOMERS

Here are some examples of how to handle, and how not to handle, some customer statements:

1. “What is the most I can send without having to show ID?” Wrong: “$1,990.00”Right: “There is no such amount; we reserve the right to ask for ID at any time. We are not here to get you in trouble, but nor do we care to get in to trouble because you are reluctant to show ID.”

Analysis: If you answer the question, and they give you an amount just below that threshold, you have just counseled the customer on how to evade BSA requirements, a money laundering offense.

2. “I don’t want any trouble with the government.” Wrong: “Yeah, I know what you mean.”Right: “What do you mean?”

Analysis: Trouble with the government may mean many things; if it is an immigration matter that is one thing; if it is any other kind of trouble; we need to ask further questions until we are satisfied. If we are not satisfied, the transaction must be refused.

3. “Can I come several times with $1,900, in order to send all that I need to send?”Wrong: “Well, we are not supposed to say it is OK, but we know a lot of our customers do that.” Right: “No, the orders will be stopped and you will be asked not to use our service any more.”

Analysis: A strong statement condemning the practice is called for here. Any other answer is willful blindness to the likelihood that the customer will structure.

4. “Can I get a friend to send the money in his name, or can I just make up a few different names?”Wrong: “Well, what we don’t know won’t hurt us.”Right: “No. We have the absolute right to know who owns the money we are transmitting.”

Analysis: To agree to this or to allow this practice would be money laundering of the worst sort, and will get you thrown in jail.

IMPORTANT: Elder Financial Abuse

Elder financial abuse includes the illegal or improper use of an older adult’s funds, property, or assets. Older adults can become targets of financial exploitation by family members, caregivers, scam artists, financial advisers, home repair contractors, fiduciaries (such as agents under power of attorney and guardians), and others. Older adults are attractive targets because they may have significant assets. They may be especially vulnerable due to isolation, cognitive decline, physical disability, health problems, and/or the recent loss of a partner, family member, or friend.

1. Potential Indicators of Elder Financial Abuse.

The following red flags could indicate the existence of elder financial abuse. Choice Money Transfer agents should evaluate indicators of potential financial abuse in combination with other red flags and expected transaction activity being conducted by or on behalf of the elder. An elder customer may be financially exploited if they are:

Accompanied by a stranger who encourages them to withdraw a large amount of cash, or send a large amount of money to someone.Accompanied by a family member or other person who seems to pressure them into making transactions.Not allowed to speak for themselves or make decisions.With an acquaintance who appears too interested in their financial status.Nervous or afraid of the person accompanying them.Giving implausible explanations about what they are doing with their money. Unusual patterns of spending or withdrawals from an older adult’s account;Frequent purchases of inappropriate items;Bank account withdrawals made in spite of penalties;Bills going unpaid or utilities being turned off;The presence of a “new best friend” who is accepting generous “gifts” from the older adult may all be signs that he or she is being taken advantage of financially.

2. Agent Response to Identification of Potential Elder Abuse:

Learn the reason for large transactions or withdrawalsCheck authorization and documentation to act for customers.Get photographic evidence (and be able to describe the suspect).Consult with security at any time.Ask customers to speak with security.Notify your law enforcement at once if you believe the customer is in immediate danger.Report the elder abuse to Choice Money Transfer. Prompt reporting of suspected financial abuse can trigger appropriate intervention, prevention of financial losses, and other remedies. The person reporting the abuse is protected from both criminal and civil liability.

SECTION VI - OTHER MATTERS

A. Politically Exposed Persons (PEP)Choice Money Transfer will require additional information and take additional measures when a customer is deemed to meet the criteria of a politically exposed person. The definition of a Politically Exposed Person (PEP) is an individual who holds or has previously held a senior office or government position in or on behalf of a foreign country such as:

Head of state or government Member of the executive council of government or legislature Deputy Minister or the equivalent Ambassador or an ambassador’s attaché or council Military member with the rank of General or higher President of a state owned company or bank Head of a government agency Judge Leader or president of a political party in a legislature

In addition, the term PEP can also be applied to direct family members of the individuals described above. Also, persons who can be directly linked by close association to a person designated as a PEP can themselves also be considered to be politically exposes and therefore a PEP.

B. Gramm-Leach-Bliley Act (GLBA)The Gramm-Leach-Bliley Act (GLBA) is a comprehensive federal law that requires financial institutions to develop, implement, and maintain effective safeguards to protect the security, integrity, and confidentiality of customer information. This is mandatory whether a financial institution discloses nonpublic information or not. There must be a policy in place to protect the information from foreseeable threats in security and data integrity. Components of the GLBA include: Financial Privacy Rule and Safeguards Rule.

C. Dodd-Frank ActDodd-Frank Act requires remittance transfer providers that provide international remittance transfers in the normal course of their business, to provide certain consumer protections by providing consumers with certain disclosures and error resolution rights when sending remittance transfers to consumers or businesses abroad. In accordance with this requirement Choice Money Transfer agents must provide customers a “Written Prepayment (Combined) Disclosure” (or customer receipt) containing certain information specific to the sender's transfer before they hand the money for payment.

The pre-payment disclosure (customer receipt) must contain: The amount of money being sent in the transaction The destination country being sent to The estimated exchange rate being applied to the transaction The amount that will be received and paid out to beneficiary All fees and taxes imposed on the remittance transfer Contact information for the state operating in as well as for the Consumer Financial Protection Bureau (CFPB) Options for cancelation and refunds of the transaction

D. Agent Compliance VisitationPeriodically agent locations may be visited by representatives of Choice Money Transfer’s Compliance Department or an authorized representative. They will tour the location and speak with the agent’s Compliance Officer to assess if the agent is complying with all applicable state and federal regulations including; BSA, Patriot Act, and Choice Money Transfer’s compliance policies and procedures, and required signage postings. Choice Money Transfer’s Compliance Department will coordinate with the agent prior to visitation – the agent should never grant access to any individual purporting to be acting on behalf of Choice Money Transfer (either in person or by phone), unless the agent has received prior notification from Choice Money Transfer or has verified independently that the representative is authorized to act on behalf of Choice Money Transfer.

E. Law Enforcement RequestsFrom time to time regulatory and law enforcement agencies may request information and records regarding customers and transactions. Any Choice Money Transfer location, or associated person, who receives or is served with a summons, subpoena, or court order related to Choice Money Transfer’s business should immediately contact o u r Compliance Department for further assistance. Choice Money Tran s fer will assist these regulatory representatives in their investigations and queries provided that the information request is conducted in a lawful manner.

F. Compliance Examinations by the IRS and State RegulatorsThe Internal Revenue Service (IRS) and state regulators are empowered by law to conduct checks and detailed examinations of money services businesses/licensees to ensure compliance with Bank Secrecy Act and related state regulations. Transaction reporting and record keeping requirements are the primary focus of such visits.

IRS agents will normally issue a Title 31 request prior to visitation that will detail the specific time period and documents to be reviewed. IRS agents are entitled to see these documents and expect complete cooperation from the Choice Money Transfer’s agents and employees with the examination process at all times.

For any Title 31 examination conducted by the IRS, Choice Money Transfer agents are required to share with the Choice Money Transfer Compliance Department the results of the examination.

G. Penalties for Non-ComplianceViolations of BSA requirements may result in civil and / or criminal penalties as noted below:

Failure to maintain compliance procedures may cause the imposition of civil penalties of up to a maximum of $1,000 per day for each day of noncompliance. This includes procedures related to customer identification.

A penalty of not more than $500 per violation can be imposed if the institution violates the recordkeeping or reporting requirements of the BSA. This includes filing an Unusual Activity Report.

Willful violations of the reporting and recordkeeping requirements may cause the imposition of civil penalties in an amount equivalent to that of the transaction (up to $100,000) or $25,000, whichever is greater.

The Money Laundering Control Act of 1986 has expanded this penalty to allow additional civil money penalties of up to $50,000 if a financial institution engages in a pattern of negligent activity.

Continued noncompliance can result in the issuance of a “Cease & Desist” order.

Any individual who willfully violates the structuring provisions may be fined not more than $250,000 or imprisoned for not more than five (5) years, or both. Also, if you know a customer is structuring or assisting in structuring transactions for them, you can be held liable.

Any individual who willfully violates the structuring provisions while violating another federal law, or as part of a pattern of any illegal activity involving more than $100,000 in a twelve-month period, may be fined not more than $500,000 or imprisoned for not more than ten (10) years, or both.

ConclusionIt is the expectation that every Choice Money Transfer agent will operate in a legal and responsible manner. Compliance with all applicable federal, state, and local laws and regulations is required. Complete cooperation with law enforcement and regulatory authorities with the timely filing of reporting and maintaining records in accordance with Choice Money Transfer’s policies and procedures is mandatory.