Covert Examinations Flashcards
Spencer, a fraud examiner, plans to use a confidential informant. The informant agrees to aid Spencer in exchange for cash. Spencer prepares a receipt for the transfer of cash to the informant and asks the informant to sign it, but the informant refuses. What should Spencer do?
A. Have a witness observe the transfer of cash and sign a statement attesting to the transaction
B. Give the informant the cash, but make no record of the transaction
C. Refuse to pay the cash without a receipt, even if it means the informant will not aid Spencer
D. None of the above
C. Refuse to pay the cash without a receipt, even if it means the informant will not aid Spencer
If the fraud examiner decides to pay an informant or source, he should make the payment in cash and obtain a receipt. If the source will not sign a receipt, the fraud examiner should not pay him. There have been numerous instances where a receipt was not obtained and the informant subsequently denied receiving funds or challenged the amount paid. If this happens, the fraud examiner will have to defend himself without proof; indeed, some investigators have been accused of having embezzled the payments. Payments should only be made on a cash on delivery (COD) basis.
When a fraud examiner prepares a memorandum reflecting the information furnished by a confidential source, how should the fraud examiner identify the source?
A. The fraud examiner should not write confidential source information in a memorandum.
B. The fraud examiner should identify the source by his or her full name.
C. The fraud examiner should identify the source using his or her initials.
D. The fraud examiner should use symbols to denote the source’s identity.
D. The fraud examiner should use symbols to denote the source’s identity.
It is recommended that all contact with informants and sources be reported on a memorandum, although the confidential source or informant’s identity should not be included in the report. Instead of including the source or informant’s identity, the fraud examiner should use symbols to denote the source’s identity. It is further recommended that sources be preceded with an “S,” followed by a unique identifier (i.e., source #1 would be “S-1”; source #2 would be “S-2”). The symbols for informants would then be “I-1” and “I-2.”
A fraud examiner is deciding whether to conduct a traditional or a covert examination for a suspected fraud. Which of the following factors would be most favorable to conducting a covert examination?
A. The fraud examiner finds it important to collect information in a direct manner from people possessing it.
B. The fraud examiner would like to determine who is responsible for known losses occurring in a certain area.
C. There are sufficient details at the present time to apprehend the suspect.
D. The fraud examiner is fairly certain about who is responsible for the suspected fraud.
B. The fraud examiner would like to determine who is responsible for known losses occurring in a certain area.
The following situations are those in which covert operations have traditionally worked well:
• There is reliable information about criminal activity or asset losses, but insufficient detail for prevention or apprehension.
• Losses are known to be occurring in an area, but there is no information as to how they are occurring or who is responsible.
• It is desirable to gather information concerning personal relationships or to identify the contacts made with or by certain people.
• It is desirable to compare actual practices with supposed or required practices.
• It is important to obtain information in an indirect manner from people believed to possess it.
Two people are having a conversation in a public park, but they are nowhere near any other people. Sandy, a private investigator, hid an audio recorder nearby without their knowledge and captures the conversation. Sandy’s action is likely prohibited by law. T/F
True
Although it is generally not a crime to take a video recording of a person in public if the recording is not to be used for commercial purposes (i.e., the recording will not be sold), the recording is subject to all of the laws and rules regarding the recording of conversations if any part of the person’s conversation or words are picked up on the tape. That is, if a person’s words are recorded on a camcorder, the law treats the recording like a recorded telephone conversation. Thus, a fraud examiner may be prohibited from recording a conversation if he is not a party to it or he does not have the person’s consent.
It is legal to take a video and audio recording of a suspect without his consent, as long as the suspect is in a public place when the recording is done. T/F
False
Recording the conversations of others with eavesdropping devices (supersensitive microphones that listen from behind closed doors, for example) usually is illegal. People behind closed doors have a reasonable expectation of privacy. Taking a video recording or photograph of someone in a public place is legal, if the person does not have a “reasonable expectation” of privacy in such a place.
Although it is generally not a crime to take a video recording of a person in public if the recording is not to be used for commercial purposes (i.e., the recording will not be sold), the recording is subject to all of the laws and rules regarding the recording of conversations if any part of the person’s conversation or words are picked up on the tape. That is, if a person’s words are recorded on a camcorder, the law treats the recording like a recorded telephone conversation. Thus, a fraud examiner may be prohibited from recording a conversation if he is not a party to it or he does not have the person’s consent.
As long as the fraud examiner is not a government employee, promises of unqualified confidentiality for informants or sources are encouraged to get them to participate. T/F
False
Whether working in private or government sectors, fraud examiners are not in a position to offer unqualified confidentiality to informants. Therefore, any promises made to an informant or source should be qualified with the caveat that no absolute assurances of confidentiality can be given. For example, a fraud examiner might say that he cannot guarantee that the source’s identity will be kept secret, but that he will do so if possible. In the case of a fraud examiner who is employed by a governmental agency, there might be an absolute duty not to hold sources and informants in confidence. In many law enforcement agencies, an investigator might not have informants or sources who are unknown to the agency. Investigative agencies also regularly share information on criminal investigations with prosecutors, including the identity of the source of information. The same regulations and considerations could govern business entities.
Which of the following is a valid legal defense to allegations of entrapment against a fraud examiner who is a federal law enforcement officer?
A. There is proof of the suspect’s modus operandi.
B. The fraud examiner acted with adequate predication.
C. The suspect made exculpatory statements.
D. The fraud examiner had suspicion of foul play.
B. The fraud examiner acted with adequate predication.
Entrapment occurs when law enforcement officers or government agents induce a person to commit a crime that he is not previously disposed to commit. Entrapment poses the biggest legal problem in covert operations, particularly in undercover operations. Therefore, it is imperative that adequate predication exists before the operation is commenced. The law enforcement officer or government agent must act based on more than mere suspicion. For example, if the officer received a reliable tip that a suspect committed fraud, then that could serve as adequate predication. Covert operations must not be used for “fishing expeditions.”
Which of the following facts would best support the defense of a law enforcement officer against an allegation of entrapment?
A. The officer acted based on a tip from a reliable source
B. The officer acted without malice
C. The officer acted based on his suspicion of fraud
D. All of the above
A. The officer acted based on a tip from a reliable source
Entrapment occurs when law enforcement officers or government agents induce a person to commit a crime that he is not previously disposed to commit. Entrapment poses the biggest legal problem in covert operations, particularly in undercover operations. Therefore, it is imperative that the operation be properly predicated. The law enforcement officer or government agent must act based on more than mere suspicion. For example, if the officer received a reliable tip that a suspect committed fraud, then that could serve as adequate predication. Covert operations must not be used for “fishing expeditions.”
