Law Related to Fraud
Which of the following is NOT a legal element that must be shown to prove a claim for fraudulent misrepresentation of material facts?
A. The victim relied on the misrepresentation.
B. The defendant made a false statement (i.e., a misrepresentation of fact).
C. The victim suffered damages as a result of the misrepresentation.
D. The victim failed to exercise due care in relying on the representation.
According to the World Bank Principles and Guidelines for Effective Insolvency and Creditor Rights Systems, secured interests should be available for all types of property and should be available for search in a public registry.
Which of the following statements about the United Nations Convention Against Corruption (UN Convention) is NOT correct?
A. Member states must implement the necessary mechanisms to detect and prevent the transfer of assets obtained through illicit activities.
B. Member states must ensure the existence of independent anti-corruption bodies that oversee the implementation of the UN Convention policies.
C. Member states must criminalize all acts of corruption listed in the UN Convention.
D. Member states must exercise jurisdiction over acts of corruption committed within their territories or by their nationals.
Black is investigating White for misconduct. Black and White both work for the ABC Company, which operates in a jurisdiction with civil laws for defamation, invasion of privacy, and conflict of interest. While Black’s investigation was ongoing, he told a large group of individuals that White was committing adultery, which happened to be true. Which cause of action would give White the best chance for success in a civil suit against Black?
C. Conflict of interest
D. Public disclosure of private facts
Greg is serving as an expert witness and is being cross-examined at trial. The questioning party gets Greg to state that he spent considerable time working on a certain issue in the case. Then, the questioning party asks many questions on a tangential issue in the case that Greg knows little about. Which of the following describes the questioning party’s method?
B. Personal attack
C. Myopic vision
D. Sounding board
A criminal has stolen more assets than he can store in a bank account without raising suspicion. He decides to launder the funds by purchasing an insurance contract and paying for several years of premiums in advance. Which of the following best describes the criminal’s money laundering scheme?
A. Prepayment scheme
B. Structuring scheme
C. Canceled policy scheme
D. Redemption scheme
Which of the following statements concerning expert witnesses in most inquisitorial jurisdictions is accurate?
A. Each party picks and presents its own expert witness at trial.
B. The jury votes to select the most qualified expert witness at trial.
C. The parties may ask the expert any questions they wish.
D. The qualification of experts is based on standardized requirements.
Bob receives a memo from his attorney that is protected by a legal professional privilege. If Bob transmits that memo to a third party who has no need to know the information in the memo, Bob might have waived the privilege attached to the memo.
Which of the following statements concerning trials in common law jurisdictions is MOST ACCURATE?
A. The plaintiff is typically the first party to present evidence in a civil trial.
B. In both civil and criminal cases, the burden of proof is the preponderance of the evidence.
C. Both civil and criminal jury trials usually must have the same number of jurors.
D. No common law jurisdiction allows the parties to adjust the number of jurors in civil trials.
Which of the following statements concerning examinations of expert witnesses in most inquisitorial jurisdictions is accurate?
A. The parties to the litigation are not allowed to question the expert’s credibility
B. Examinations in inquisitorial jurisdictions are less confrontational than in adversarial jurisdictions
C. The expert has the discretion to determine the scope of the examinations
D. All of the above
The Financial Action Task Force’s Recommendations state that a financial institution’s customer due diligence procedures should include continued monitoring of a customer’s business relationships and transactions.
Which of the following is the most accurate statement about securities laws and regulations?
A. Most securities markets are regulated on a national basis.
B. Securities regulation refers to laws enacted by securities markets.
C. National securities laws and regulations have no extraterritorial reach.
D. Securities exchanges are regulated entities that have no regulatory authority.
Michael, a fraud examiner, is investigating Deborah for embezzlement on behalf of her employer. During his investigation, Michael learns that Deborah has cheated on her husband, and he tells several of Deborah’s coworkers about it. Deborah discovers that Michael revealed the unflattering (albeit true) information about her and decides to file a claim of defamation against him. Which of the following is the best explanation of why Deborah will not win her defamation case?
A. The information was true.
B. The news was communicated to one or more persons.
C. The statement was not printed and distributed.
D. The communications to the subject’s coworkers were privileged.
Which of the following is the MOST ACCURATE statement about rules prohibiting securities broker-dealers from making unsuitable recommendations on investments or investment strategies?
A. A suitability violation occurs when a broker does not carry out a trade requested by or promised to a customer.
B. A suitability violation occurs when a broker trades in a client’s account without obtaining prior approval for making the transactions.
C. A suitability violation occurs when a broker enters into transactions and manages a client’s account for the purpose of generating commissions and in disregard of his client’s interests.
D. A suitability violation occurs when a broker recommends an investment or investment strategy that is inconsistent with the client’s objectives.
Which of the following is NOT an element that must be proven to establish a perjury offense?
A. The defendant made a false statement that was material.
B. The defendant made a false statement while under oath.
C. The defendant made the statement with knowledge of its falsity.
D. The defendant made a false statement in a court of law.
Susan obtained a substantial amount of drug proceeds, which she deposited into a domestic bank account. Next, she moved the funds to several foreign business accounts in the form of fake loans and transactions to confuse the audit trail. Finally, she transferred the funds back to a domestic account she controlled and eventually spent the money. Which of the following actions was the placement stage of Susan’s money laundering scheme?
A. When she first obtained the drug proceeds
B. When she first deposited the drug proceeds into a domestic account
C. When she moved the funds through foreign business accounts
D. When she spent the money
Which of the following is one of the determinations that judges in adversarial systems are generally required to make before allowing expert testimony?
A. Has the expert previously testified at trial?
B. Is the testimony likely to help the expert’s side in the litigation?
C. Is the expert biased toward one of the parties?
D. Is the expert’s testimony reliable?
Which of the following would be direct evidence that the criminal defendant, a former cashier for a home improvement store, committed a cash larceny scheme that resulted in the theft of more than $5,000 from the store?
A. A witness explains the store’s ethics policy.
B. A diagram is used to display the location of the store’s registers.
C. A witness testifies that the defendant was almost always the last cashier to leave the store.
D. A witness testifies that he saw the defendant take the money.
During a trial in an adversarial system, an attorney asks an expert witness, “Could you please describe the procedures you performed in your examination?” Based on this question, what type of testimony is most likely being presented?
C. Request for admission
D. Direct examination
Which of the following is a legal element that the government must show to prove a criminal conspiracy?
A. The defendant knew the identity of all the participants in the conspiracy.
B. The defendant knew all the details or objectives of the conspiracy.
C. The defendant knew the purpose of the conspiracy and intentionally joined it.
D. The conspirators accomplished the purpose of the conspiracy.
Which of the following statements concerning front businesses as a method of laundering money is the LEAST accurate?
A. Front businesses provide cover for delivery and transportation related to illegal activity.
B. Launderers benefit from front businesses by avoiding paying taxes on illegal income.
C. Front businesses benefit launderers by providing a safe place to manage criminal activities.
D. A red flag of a front business is the observation of minimal customers during peak operating hours.
Which of the following statements regarding civil lawsuits in most jurisdictions is CORRECT?
A. The plaintiff’s initial filing does not typically need to contain a summary of the evidence.
B. Civil lawsuits begin with the filing of a pleading, usually in the jurisdiction in which the defendant resides or where the claim arose.
C. The plaintiff’s initial filing with the court does not typically need to include the specific facts on which the claim relies.
D. All of the above are correct.
Common law is the body of law that is created by the judiciary as opposed to legislatures.
Which of the following is NOT an element generally required to establish a claim alleging the common law civil wrong for intentional infliction of emotional distress?
A. The victim suffered distress as a result of the defendant’s conduct.
B. The defendant acted intentionally or recklessly.
C. The victim was an employee of the defendant.
D. The defendant engaged in extreme and outrageous conduct.
Which of the following is a red flag that an entity is operating a security business without the proper license or registration?
A. There are justified gaps in the work history of promoters at the entity.
B. The agents working at the entity have criminal records.
C. The entity’s website contains detailed background information.
D. There is an unexplained absence of customer complaints against the entity.
In a particular country, the government system involves a national government, along with semi-autonomous provincial governments, which both have a role in creating substantive law. Which of the following best describes this system of government?
A. Confederate system
B. Unitary system
C. Federal system
D. Common law system
Which of the following statements concerning criminal proceedings in civil law systems is most accurate?
A. Juries are never used in civil law systems.
B. Judges most commonly serve as the fact finder, but some jurisdictions use juries or panels of professional judges and lay judges in serious cases.
C. Juries are more frequently used in civil law systems than in common law systems.
D. Judges do not make factual findings, but rather serve as a referee to maintain proper procedure.
Young was a client of Toler, an investment professional. Young had no investment experience and possessed limited means. In a ten-month period, Toler executed 132 options trades in Young’s account. Toler, who had control of Young’s account, entered into the transactions and managed the account for the purpose of generating commissions rather than furthering Young’s interests. In which of the following schemes did Toler engage?
B. Insider trading
The MAIN purpose for maintaining the chain of custody on an item of evidence is to establish that the evidence has not been altered or changed from the time it was collected through its production in court.
Which of the following organizations maintains the Recommendations, a comprehensive set of standards with which to measure a country’s anti-money laundering, counterterrorism, and nuclear proliferation laws and policies?
A. The Financial Crimes Enforcement Network
B. The United Nations
C. The Financial Action Task Force
D. The Egmont Group
Company A sued Company B to recover damages for the breach of a contract. In the same proceeding, Company B sought damages for an allegation that Company A fraudulently induced Company B into entering the contract. In this case, what would Company B’s claim against Company A be called?
B. Collateral attack
The OECD Recommendation on Combating Bribery in International Business (Recommendation) urges member states to combat the bribery of foreign public officials by taking steps to improve which of the following primary areas within their respective infrastructures?
A. Laws and regulations covering e-commerce
B. Public health and safety regulations
C. Consumer data protection laws
D. Laws and regulations related to public subsidies, licenses, and contract procurement
Which of the following statements concerning civil litigation evidence in civil law jurisdictions is MOST ACCURATE?
A. The civil trial record typically contains a verbatim account of all oral testimony.
B. The civil trial record is created throughout the trial process.
C. Oral testimony is valued more highly than documentary and written evidence.
D. The civil trial record is created by the parties to the litigation.
_____________ refers to the financial crime of disguising the existence, nature, source, control, beneficial ownership, location, and disposition of property derived from criminal activity.
B. Money laundering
Which of the following statements concerning litigation involving parties in multiple jurisdictions is most accurate?
A. If a party obtains a judgment against a defendant in one jurisdiction, that judgment will be effective in any jurisdiction.
B. The court will almost always follow the procedural law of the relevant foreign jurisdiction.
C. The court will almost always follow the substantive law of the relevant foreign jurisdiction.
D. If a party obtains a judgment against a defendant in one jurisdiction, that judgment might not be effective in other jurisdictions where the defendant resides.
In systems using adversarial processes, an attorney may impeach an opposing party’s witness by showing that the witness:
A. Has a keen ability to observe
B. Testified from personal knowledge
C. Made prior inconsistent statements
D. Has a reputation for truthfulness
Which of the following statements concerning emerging payment methods, such as digital currencies and mobile payments, is accurate?
A. Such payment methods are typically not money laundering threats
B. Money launderers are attracted to such payment methods because they often allow anonymous transactions
C. Due to the concern over these payment methods, they tend to be regulated more strictly than traditional payment methods
D. All of the above
At the end of a civil proceeding, the court finds the defendant, a company, liable and orders it to pay a large sum of money to compensate for the plaintiff’s losses. Which of the following best describes this type of remedy?
A. Declaratory relief
B. Equitable relief
Which of the following statements about the International Organization of Securities Commissions (IOSCO) is TRUE?
A. IOSCO is comprised of securities commissioners and administrators responsible for securities regulation and the administration of securities laws in their respective countries.
B. IOSCO’s primary aim is to establish a separate set of regulations for securities exchanges in developing nations.
C. IOSCO is an industry association that sets global accounting and financial reporting standards.
D. IOSCO is an oversight body responsible for issuing and enforcing regulatory standards that govern all international securities markets.
The _______________ provides that people in fiduciary relationships must act with the skill and attention normally exercised by ordinarily prudent persons in similar positions.
A. Duty of care
B. Duty of responsibility
C. Duty of loyalty
D. Duty of employee trust
Which of the following is NOT required for a contract, transaction, or scheme to be classified as an investment contract?
A. An investment of money or other asset
B. The expectation of making a profit
C. Profits derived solely from the investor’s management activity
D. Investment in a common enterprise
Fraud can best be defined as:
A. The offering, giving, receiving, or soliciting of anything of value to influence an act or a decision
B. The obtaining of property from another with the other party’s “consent” having been induced by wrongful use of actual or threatened force or fear
C. The wrongful appropriation of money or property by a person to whom it has been lawfully entrusted
D. Any intentional or deliberate act to deprive another of property or money by guile, deception, or other unfair means
Evidence that tends to make some fact at issue more or less likely than it would be without the evidence is called:
A. Relevant evidence
B. Authentic evidence
C. Real evidence
D. Direct evidence
To evade taxes, Angelo pretended to transfer assets to one of his relatives, but kept and used the assets for himself in all respects. Angelo’s scheme is an example of an excise tax evasion scheme.
Which of the following statements concerning disclosures in criminal proceedings in adversarial jurisdictions is FALSE?
A. The prosecution is typically entitled to fewer disclosures from the defendant than parties in civil litigation.
B. The defense is typically entitled to the attorney work product of the prosecution.
C. The defense is typically entitled to exculpatory information held by the prosecution.
D. The prosecution typically may access certain disclosures regarding the basis of the defendant’s case.
Which of the following is one of the three basic options by which organizations can legitimize cross-border transfers of personal information?
A. Obtain approval from a Certified Information Privacy Professional (CIPP).
B. Obtain a warrant granting permission to transfer the data.
C. Establish a contract between the entities exchanging the information.
D. Use a third-party transferring service.
Which of the following is a correct statement about employees’ legal rights during fraud investigations?
A. For a violation of an employee’s legal rights to occur, there must be some form of government action.
B. Employees’ privacy rights that can affect the employer-employee relationship may arise from both statutory law and contract law.
C. Private employers cannot be found guilty of violating the legal rights of their employees.
D. The International Treaty on Human Rights grants employees certain fundamental rights, and it applies equally to employees of private companies and government agencies.
Which of the following is generally NOT one of the goals of deferred prosecution agreements?
A. To postpone prosecution until a company conducts an extensive internal investigation
B. To reduce the risk of illegal practices at an organization
C. To allow prosecutors to resolve a case while still punishing malfeasance
D. To get an organization to reform its policies
Which of the following statements concerning inquisitorial judicial processes is most accurate?
A. The majority of common law countries implement an inquisitorial process.
B. The parties to the litigation are primarily responsible for questioning witnesses.
C. The court can generally require the defendant to testify.
D. Evidence-gathering is primarily the responsibility of a private examiner appointed by the court.
Blake is a purchasing official for the government, and White is a vendor who contracts with the government. After Blake awarded a government contract to White, White gave Blake a new luxury-brand watch to show his thanks. Under these facts, which of the following crimes would the government likely use to bring charges against Blake and White?
B. Illegal gratuity
D. Official bribery
Alicia has been charged with tax evasion. As a defense, Alicia claims that she made an honest mistake due to the tax law’s complexity, and she did not intentionally violate the jurisdiction’s tax laws. If the court finds that her mistake was in good faith, she will most likely not be found to have “willfully” engaged in fraudulent actions to avoid reporting or paying her taxes.
All of the following are elements required to prove fraud based on the concealment of material facts EXCEPT:
A. The defendant failed to disclose a material fact that he had a duty to disclose.
B. The defendant acted with intent to mislead or deceive the victim(s).
C. The defendant had knowledge of a material fact that he had a duty to disclose.
D. The defendant knew for certain the victim would be harmed.
In jurisdictions that allow criminal bargaining agreements, whether a bargaining agreement is available to the defendant is typically within the discretion of the defendant’s counsel.
In most civil law jurisdictions, which of the following best describes when a party’s requirement to take steps to preserve and produce relevant evidence arises?
A. When litigation is reasonably anticipated
B. When the charging documents are filed
C. When the court orders such steps to be taken
D. When the party receives a service of process
In what type of bankruptcy proceeding does the court sell off the debtor’s property, pay creditors with the proceeds, and discharge all of the debtor’s dischargeable debts?
A. Liquidation bankruptcy
B. Debt dismissal bankruptcy
C. Reorganization bankruptcy
D. Debt adjustment bankruptcy
Consents to searches by government agents that are obtained by force, duress, or bribery are not effective under the law and do not waive the consenting parties’ rights to be free from searches.
All of the following are common legal defenses for tax evasion EXCEPT:
A. Death of the taxpayer
B. Mental illness of the taxpayer
C. The actions were tax avoidance, not tax evasion
D. The taxpayer’s reliance on an attorney or accountant
Which of the following is the MOST ACCURATE statement about the UK Bribery Act?
A. Even if an organization’s anti-corruption program complies with the FCPA, it might not be sufficient for the purpose of complying with the UK Bribery Act.
B. Like the FCPA, the UK Bribery Act contains an explicit exception for facilitating payments.
C. Unlike the FCPA, the UK Bribery Act makes it a crime to bribe a foreign public official in connection with international business transactions.
D. The UK Bribery Act only exercises jurisdiction over individuals and corporate entities for acts of corruption when the offense occurs outside the UK.
The primary difference between tax avoidance and tax evasion is that tax evasion is illegal and tax avoidance is legal.
A missing trader scheme is a type of consumption tax evasion scheme in which a party collects a value-added tax from a large transaction, but disappears with the tax proceeds rather than properly turning the tax over to the government.
Which of the following is NOT considered an example of obstruction of justice?
A. Destroying documents related to a future proceeding
B. Showing disrespect to a judge
C. Impeding a government auditor in the performance of his duties
D. Influencing a witness with bribes
Which of the following examples of judicial systems would best be described as a common law system?
A. The courts are bound by codified principles or statutes, but are not bound by previous court decisions.
B. The courts are bound primarily by previous court decisions to resolve legal issues.
C. The courts are allowed to consider both codified statutes and previous court decisions, but are bound by neither.
D. The courts are bound by both previous court decisions and statutes passed by legislatures.
Which of the following is NOT one of the elements of an anti-money laundering program under the Financial Action Task Force’s Recommendations?
A. Development of internal policies, procedures, and controls to prevent money laundering
B. Inclusion of a moderate limit on the size of wire transfers
C. An ongoing training program for awareness in money laundering
D. Designation of a compliance officer at the management level
Which of the following statements concerning the appeals process in common law and civil law jurisdictions is CORRECT?
A. In common law jurisdictions, a court will usually review issues of fact independently of the trial court’s determinations
B. In civil law jurisdictions, a court usually may not review issues of fact independently of the trial court’s determinations
C. In common law jurisdictions, a court will usually review issues of law independently of the trial court’s determinations
D. All of the above
The OECD Recommendation on Combating Bribery in International Business (Recommendation) focuses primarily on the demand side of bribery (the solicitation and receipt of bribes), but does not address the supply side (the offering side of the bribery bargain).
Which of the following is NOT a right of the accused under the United Nations’ International Convention on Civil and Political Rights (ICCPR)?
A. Freedom from arbitrary arrests
B. Right to a trial by jury
C. Right to be presumed innocent until proven guilty
D. Right of the accused to be informed of criminal charges
Which of the following is the MOST ACCURATE statement regarding the judicial treatment of privileges from other jurisdictions in cross-border litigation?
A. The Hague Evidence Convention established a set of standardized rules of privilege for cross-border litigation.
B. Courts are inclined to apply the privilege laws of foreign jurisdictions.
C. Litigants involved in cross-border litigation should expect to have the privilege laws from their own jurisdiction applied when engaged in litigation abroad.
D. There are no standardized rules of privilege for litigation in cross-border disputes.
Which of the following statements concerning civil trials in civil law jurisdictions is NOT accurate?
A. The trial record is a summary of the evidence, as opposed to a word-for-word transcript.
B. The standard of proof for most civil trials is preponderance of the evidence.
C. Rather than a single trial event, civil trials are a continual series of meetings and correspondences.
D. The judge rules on issues of admissibility during the final hearing.
Which of the following can affect the rights that employees may have during an internal investigation?
A. Existence of interstate compacts
B. Existence of violation red flags
C. Existence of an employment contract
D. Existence of fraud risk factors
Which of the following is a legal element that must be shown to prove a claim for official bribery?
A. The government suffered damages as a result of the bribe.
B. The defendant failed to exercise due care.
C. The defendant gave or received a thing of value.
D. The defendant acted negligently.
All of the following are basic principles for the protection of data privacy on which most data privacy laws are built EXCEPT:
A. All personal information must be obtained fairly and lawfully.
B. All personal information must be used only for the original specified purpose.
C. All personal information must be kept accurate and up-to-date.
D. All personal information must be collected pursuant to the OECD Privacy Guidelines.
Allison works for a government contractor. She informs the government that her employer has been submitting false claims to the government for payment. Later, it is discovered that Allison has misappropriated more than $50,000 of her employer’s money. If Allison qualifies for protection as a “whistleblower” entitled to anti-retaliation protection under the law because of her report to the government, she cannot be fired or disciplined for any reason, including misappropriating funds from her employer.
Which of the following is TRUE in regard to authenticating evidence in most common law systems?
A. The purpose of authentication is to show that the evidence is what it purports to be.
B. Digital records cannot be authenticated by testimony from a witness with personal knowledge.
C. For evidence to be authenticated, it must be reviewed and voted on by a jury.
D. A party can introduce authenticated exhibits as evidence in trial even if the items are not relevant.
Most common law jurisdictions use either indictments or informations as criminal charging documents, while civil law jurisdictions might use indictments, criminal petitions, or arrest warrants as functional equivalents to charging documents.
Which of the following typically does NOT have to be present for communications between an attorney and his client to be protected by a legal professional privilege?
A. Communication between a legal advisor and a client
B. Intent to keep the communications confidential
C. Purpose of the communications was to seek or provide legal advice
D. A lawsuit has been filed
You are an accountant. One of your clients files bankruptcy. Several months later, the bankruptcy administrator calls and says that she wants to question you to obtain information regarding your client’s financial affairs. Assuming the administrator has the powers recommended under the World Bank Principles and Guidelines for Effective Insolvency and Creditor Rights Systems, which of the following is TRUE?
A. The administrator has the power to compel you to provide information regarding the client.
B. The administrator may request information regarding the client, but has no authority to compel you to provide it.
C. You cannot allow the administrator to review the documents without a separate court order.
D. You are prohibited from providing the documents without your client’s written permission.
The most common bankruptcy fraud scheme is:
A. A petition mill
B. Multiple filing
C. Concealment of assets
D. A planned bustout
A witness whose primary purpose at trial is to offer testimony concerning his firsthand experiences and factual observations is known as a lay witness.
Curtis is an employee at Chatham, a publicly traded corporation, and he owns shares of Chatham’s stock. Curtis learns that Chatham is about to announce poor earnings, so he sells his shares of Chatham’s stock. Assuming that his conduct was illegal in the jurisdiction in which he works and resides, what type of crime did Curtis most likely commit?
A. Insider trading
B. Unauthorized trading
C. Public fraud
D. Market manipulation
Which of the following is NOT one of the elements the government must prove to establish a violation of a law criminalizing false statements to government agencies?
A. The defendant knew the statement was false.
B. The defendant made a false statement.
C. The government relied on the false statement.
D. The false statement was material.
When perpetrating a bustout scheme, otherwise known as a planned bankruptcy, an individual or business typically performs which of the following actions?
A. Files a bankruptcy petition in another (uninvolved) person’s name
B. Hires several employees
C. Takes out a small business loan
D. Purchases large quantities of goods on credit
What is the primary purpose of securities regulation?
A. To restrict the exchange of securities between buyers and sellers
B. To balance the legitimate needs of businesses to raise capital against the need to protect investors
C. To increase stock exchange trading volume
D. To prevent the sale of unregistered securities
The same customer comes into a bank each day and purchases bearer instruments with cash in amounts just under the mandatory reporting requirements in the jurisdiction. The bank employees suspect that the customer is attempting to violate the jurisdiction’s money laundering regulations. Assuming that the jurisdiction’s anti-money laundering regulations adhere to the Financial Action Task Force’s Recommendations, the bank:
A. Is required to file a cash transaction report for possible criminal activity with appropriate authorities since the purchase involved cash
B. Is required to file a report of suspicious transactions with appropriate authorities because the employees suspect money laundering violations
C. May not file a report of suspicious transactions related to potential criminal activity with appropriate authorities
D. May, but is not required to, file a report of suspicious transactions related to possible money laundering with appropriate authorities
Which of the following statements is MOST ACCURATE regarding cross-examination of witnesses in adversarial systems?
A. The primary purpose of cross-examination is for opposing counsel to discover information previously unknown to opposing counsel.
B. If opposing counsel asks an overly complex question during cross-examination, witnesses should ask for the question to be rephrased.
C. If an expert witness’s opinion is at risk of being distorted during cross-examination, he should avoid answering the question.
D. The general rule is for opposing counsel to cross-examine all witnesses to ensure that important details are not missed by the fact finder.
Countries A and B both follow the Financial Action Task Force’s Recommendations concerning cross-border transfers of currency. Trevor is traveling from Country A to Country B while carrying an amount of currency above Country B’s designated threshold. Trevor is required to disclose the amount of currency he is carrying to authorities in Country B.
Lane is a CFE who works for Penn National, a private company. Lane suspects that Payne, a warehouse attendant for Penn National, has stolen numerous materials and products from the company. Lane plans to conduct an internal investigation into the missing items. Based on these facts, which of the following is the MOST ACCURATE statement?
A. Payne has a duty to cooperate with the investigation even if what is requested from him is not reasonable.
B. Payne likely has a duty to cooperate with the investigation as part of the employer-employee relationship.
C. Payne can refuse to cooperate with the investigation because he has a common law right of privacy.
D. Payne can refuse to cooperate with the investigation because he has a fundamental right to remain silent.
Which of the following is NOT one of the three basic forms of evidence?
Which of the following statements concerning alternative remittance systems is INCORRECT?
A. Funds are sent and received without the use of traditional financial institutions.
B. The systems are characterized by a lack of physical or digital transfer of currency between payers and payees.
C. The ledgers used typically contain information regarding payers and payees, such as names and account numbers.
D. The systems are not necessarily illegal.
Leslie owns a company and submits tax information regarding the company’s finances. The jurisdiction taxes the company’s sales of goods, but only after the costs of producing the goods are subtracted. To reduce her tax liability, Leslie artificially inflates the costs of production in her tax records. Which of the following statements is MOST ACCURATE?
A. Leslie is committing a sales tax scheme.
B. Leslie is committing a tax credit evasion scheme.
C. Leslie is not liable for tax evasion.
D. Leslie is committing a falsified tax deduction scheme.
Country A requires banks to report to the government all instances where a customer deposits or withdraws over $10,000 in a single day. In an attempt to escape attention regarding his illicit assets, Charles deposits $9,000 each day. In which of the following schemes is Charles engaging?
A. Integration scheme
B. Reverse deposit scheme
C. Smurfing scheme
D. Mobile payment scheme
Which of the following statements concerning the evidentiary record in a criminal proceeding in an inquisitorial jurisdiction is FALSE?
A. The evidentiary record is created during the examining phase of litigation.
B. The defendant(s) and prosecution create the initial evidentiary record.
C. The judge may collect evidence to add to the evidentiary record during the examining phase.
D. The evidentiary record is already available by the time of the trial.
All of the following are objectives on which the International Organization of Securities Commissions Objectives and Principles of Securities Regulation are based EXCEPT:
A. Ensuring that markets are fair, efficient, and transparent
B. Reducing systematic risk
C. Protecting investors
D. Eliminating market risk
Which of the following describes the purpose of an expert witness’s testimony at trial?
A. To give a firsthand account of the facts of the case on the record
B. To give an opinion when the fact finder needs specialized knowledge
C. To offer an opinion as to a party’s guilt or innocence
D. None of the above
Jackson believes he has a legal cause of action against Alice, who lives in a foreign country. The fact that Jackson is the plaintiff allows him to bring the lawsuit against Alice in any court in the country where he lives.
In jurisdictions that distinguish between secured and unsecured creditors during bankruptcy proceedings, if there are both creditors with secured interests in the debtor’s property and creditors with unsecured interests, the unsecured creditors are typically paid before the secured creditors.
White, a CFE, works for the ABC Company, a private company that operates in a jurisdiction with civil laws for defamation, invasion of privacy, and conflict of interest. ABC’s president told White to investigate Green, an employee of ABC, even though Green was not suspected of any wrongdoing. If White searches Green’s private workspace without legitimate interest or authority, under which of the following claims would Green most likely be able to recover damages from White and ABC?
B. Intrusion into Green’s private matters
C. Publicity of private facts
D. Conflict of interest
During an internal investigation, Todd, a Certified Fraud Examiner, interviewed Rangel, a fraud suspect. Although Rangel wanted to leave in the middle of the interview, Todd blocked the exit and prevented him from leaving. Rangel subsequently confessed to committing fraud. If, under these facts, Rangel files a lawsuit for false imprisonment against Todd, Todd will likely:
A. Win the case if he did not know the conduct was illegal
B. Win the case because he is protected under the qualified business privilege
C. Lose the case if a trier of fact concludes that he restrained Rangel without consent or legal justification
D. Lose the case because Rangel did not leave the interview
An investigator at IBC Manufacturing, a private company, searches the desk of Baker, an IBC employee, and finds illegal narcotics. Although no judicial officer or other sanctioned official authorized the search, the IBC investigator seizes the narcotics and turns them over to members of law enforcement. Assuming that these facts occur in a jurisdiction with laws that provide the public with the right to be free from unreasonable search and seizure by government authorities, which of the following is the MOST ACCURATE statement?
A. The search did not violate Baker’s right to be free from unreasonable search and seizure by government authorities because such rights do not apply in the workplace.
B. Baker’s right to be free from unreasonable search and seizure by government authorities was not violated because IBC is not a government authority.
C. IBC’s actions likely violated Baker’s right to be free from unreasonable search and seizure by government authorities because the search involved criminal matters.
D. Baker’s right to be free from unreasonable search and seizure by government authorities was likely violated because the IBC investigator turned the illegal narcotics over to members of law enforcement.
To determine if a misrepresentation in the offer or sale of any securities is material, a fraud examiner should answer which of the following questions?
A. “Would a reasonable investor wish to know the information to make an informed decision?”
B. “Is the person who made the misrepresentation registered?”
C. “Did the person who made the representation have authorization to make the statements at issue?”
D. “Were potential investors promised guaranteed returns in the misrepresentation?”
Black is a Certified Fraud Examiner for the ABC Company. Green, an employee in ABC’s accounting department, steals $40,000 worth of merchandise from ABC’s warehouse. Black eventually refers Green’s case to law enforcement, and the government decides to charge Green with a crime. Which of the following offenses will the government most likely charge Green with committing (assuming that all of the following are criminal offenses in the jurisdiction in which the incident occurred)?
A. Breach of contract
C. Breach of fiduciary duty
David L. Wilson is a bank manager who is lawfully entrusted with large sums of money. One day, he figures out a way to steal $99.99 per day in cash from his employer without getting caught. For six months, Wilson fraudulently takes $99.99 in cash per day. Under these facts, Wilson is guilty of embezzlement because he was lawfully entrusted with the money that he stole.
Which of the following statements concerning the appointment of expert witnesses at trial is accurate?
A. Generally, the court selects the primary expert witnesses in adversarial jurisdictions.
B. Generally, only the parties may select experts to introduce testimony in adversarial jurisdictions.
C. Generally, only the parties may select expert witnesses in inquisitorial jurisdictions.
D. Generally, the court appoints the primary expert witnesses in inquisitorial jurisdictions.
Which of the following situations would constitute a violation of the U.S. Foreign Corrupt Practices Act (FCPA)?
A. A private U.S. company transfers $45,000 to a foreign official to influence the award of a public construction contract.
B. A private U.S. company transfers $100,000 to the sole proprietor of a Brazilian company to influence the award of a commercial imports contract.
C. A private U.S. company pays a $2,000 foreign corporation fee that is required in order to do business within the country.
D. A private UK company transfers $25,000 to a Chilean public official to influence the award of lucrative overseas contracts.
In jurisdictions that allow for corporate criminal liability, which of the following is typically required for the corporation to be vicariously liable for the acts of one of its employees?
A. The corporation had previous violations of a similar nature.
B. The employee was acting within the scope of his employment.
C. Management knew of the underlying offense but did not correct it.
D. Management was directly involved with the offense.
Which of the following is a method of disguising money from illegal nonbusiness sources by recording more income on a business’s books than the business actually generates?
A. Recording, but not depositing, revenue
B. Real estate purchases
C. Overstating revenues
D. None of the above
According to the best practices listed in the Financial Action Task Force’s Recommendations concerning large cash transactions with customers, which of the following transactions would require a report to be filed with the government?
A. A lump-sum purchase in cash of warehouse supplies above the jurisdiction’s designated threshold
B. A lump-sum purchase in cash of casino credits above the jurisdiction’s designated threshold
C. A domestic cash deposit into a depository institution (bank) below the jurisdiction’s designated threshold
D. All of the above
Which of the following is NOT a method of pretrial civil discovery commonly found in common law jurisdictions?
A. Written examinations
B. Oral examinations
C. Affidavits of documents or records
D. Requests for agreement
Under the World Bank Principles and Guidelines for Effective Insolvency and Creditor Rights Systems, which of the following parties should administer the debtor’s estate in liquidation bankruptcy proceedings?
A. An independent insolvency representative
B. The jurisdiction’s commerce department or equivalent agency
C. The debtor, supervised by an independent insolvency representative
D. The creditor with the largest claim against the debtor
Which of the following is the MOST ACCURATE statement about litigation privileges and other similar evidentiary protections, such as the U.S. attorney work-product doctrine?
A. Their primary purpose is to protect confidential communications between a client and his attorney.
B. They apply only while a trial is underway.
C. They protect documents and materials prepared by third parties.
D. They will only protect documents and materials prepared after litigation commences.
Which of the following is the MOST ACCURATE statement about the circumstances under which a conflict of interest claim would be actionable against an agent?
A. The agent must have informed the principal of his actions.
B. The agent must have breached the duty of fidelity that he owed to his principal.
C. The agent must have received written notice that conflicts are prohibited.
D. The agent must have had an undisclosed interest in a matter that could influence his professional role.
Which of the following statements concerning money services businesses (MSBs) is MOST ACCURATE?
A. MSBs are generally at a lower risk of money laundering than consumer banks.
B. A depository investment bank is classified as an MSB.
C. MSBs generally have a more stringent regulatory regime than other financial institutions.
D. A currency exchange is classified as an MSB.
Which of the following is the MOST ACCURATE statement about the different types of alternative dispute resolution?
A. In an arbitration proceeding, the arbitrator acts as a judge or jury by deciding the dispute at issue on its merits.
B. In a mediation session, the mediator decides who should win the dispute at issue.
C. The agreements reached in mediations are generally nonbinding.
D. The decisions reached in all arbitrations are always binding.
In a particular country’s judicial process, the parties to a legal proceeding are primarily responsible for gathering evidence for trial. Additionally, the parties or their legal counsel conduct the questioning of witnesses. Which of the following best describes this type of judicial process?
A. Civil law process
B. Inquisitorial process
C. Adversarial process
D. Unitary process