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ACFE EXAM > Law > Flashcards

Law Flashcards

1
Q

What are the 5 different bodys of law that determine the outcome of legal disputes?

A
  • Constitutional Law
  • Statutory Law
  • Common Law
  • Administrative Law
  • International Law
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2
Q

Constitutional Law

A

Establishes/empowers branches of government and sets up the rights/obligations of individuals under the governments jurisdiction

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3
Q

Statutory Law

A

Federal or State law passed by a legislature (via legislation)

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4
Q

Common Law

A

Case law in which the decisions of individuals cases by judges/courts establish precedents that guide how future cases are decided

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5
Q

What’s the difference between substantive law and procedural law?

A

substantive law sets the terms of any dispute (eg, you broke this law)

procedural law dictates how a legal dispute is handled (eg, rules of legal system, how case is decided, procedures to hear grievance)

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6
Q

What is the doctrine of stare decisis?

A

“Stand by things that are decided”

that lower courts are bound to follow the precedents of higher courts until or unless the rule of law established is overturned by a higher court or the legislature

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7
Q

Civil Law

A

the body of law providing for remedies for violations of private rights between two private parties

based on codified principles or statutes

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8
Q

Criminal Law

A

the body of law pertaining to crimes against the state or conduct that harms society

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9
Q

Adversarial Processes

A

When the parties to a litigation drive the discovery process (with the judges facilitating production of evidence), gathering the information and presenting it to the court

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10
Q

bench trials

A

cases that are decided factually and legally by a judge (versus a jury trial, where the juries are the fact-finding body and the judge decides issues of the law)

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11
Q

Jurisdiction

A

The power of a court to hear/decide a case based on the subject matter/persons over which they can lawfully exercise authority

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12
Q

Superior Courts

A

State courts that try felony cases and civil disputes ABOVE a certain amount

aka a higher level court / Circuit Court / Trial Court

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13
Q

In a civil case, to rule for the plaintiff, the burden of proof is usually…

A

a preponderance of the evidence (eg, a lower standard than a criminal case, which is beyond a reasonable doubt)

-means that a party has to show that a certain set of facts “more likely than not” occurred

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14
Q

The three principal types of civil remedies

A

1- monetary remedies (damages)
2- Declaratory remedies
3- Equitable remedies

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15
Q

Compensatory damages

A

A civil monetary remedy

awarded to compensate plaintiff for loss/injury/harm with the goal being to put the plaintiff in the position they would have been in if the offense hadn’t occurred

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16
Q

Restitutionary damages

A

A civil monetary remedy that takes back any profits that a defendant made as a result of the offense and award them to the plaintiff

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17
Q

Punitive damages

A

A civil monetary remedy that is designed to punish the defendant to deter similar conduct (rather than compensating the plaintiff for harm suffered)

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18
Q

Declaratory remedies

A

remedies where the court states or declares the rights of the parties (eg, deciding the fate of a will/contract/personal property)

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19
Q

Equitable remedies

A

used when a monetary legal remedy alone would be inadequate to compensate for the wrong suffered

example would be an injunction

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20
Q

An injunction

A

where the court orders a party to perform or restrain form performing a specific act

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21
Q

Affirmative Defenses

A

a defense in which the defendant offers evidence that, if found credible, would negate liability, even if the defendant committed the alleged act

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22
Q

Vicarious Liability

A

An offense in which a person without personal fault is held liable

(e.g, a corporation for the act of an employee)

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23
Q

The Doctrine of Respondeat Superior

A

States that a corporation is liable for the acts of their employees if those acts occur within the scope of employment and with some intent to benefit the corporation

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24
Q

To establish criminal liability for most crimes, the US Government must prove that the defendant acted with a ______

A

a culpable mens rea (a guilty mind)

for fraud, means that there was an intent to defraud

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25
Q

The legal definition of fraud

A

a knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment

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26
Q

What is the main difference between fraudulent misrepresentation and negligent misrepresentation?

A
  • fraudulent misrepresentation requires that the statements be made intentionally and as a part of a deliberate scheme to defraud
  • negligent misrepresentation only requires that the statement was made while having no reasonable basis to believe it was true
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27
Q

Illegal Gratuities

A

items of value given to reward a decision, often after the recipient has made the decision

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28
Q

What is the crime of “uttering a forged instrument”?

A

when an individual, with intent to defraud, offers as genuine a forged instrument

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29
Q

Larceny

A

the wrongful taking of money or property of another with the intent to convert or to deprive the owner of its possession or use

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30
Q

What’s the difference between larceny and embezzlement?

A

Whether the thief had been lawfully entrusted with the stolen articles

Larcenists take the item without ever having had legal custody of the item. Embezzlers take something in which they have lawful possession

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31
Q

Establishing a breach of fiduciary duty claim is easier than establishing a claim for fraud because….

A

Because a breach of fiduciary duty claim does not require proof of wrongful intent

(eg, you just need to prove that they occupied a position of trust and breached that duty to advance a personal interest)

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32
Q

The business judgement rule

A

-protects O&D from liability in duty of care judgements that were made in good faith (eg, free of self-dealing or conflicts) and appeared prudent based on the then-known circumstances

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33
Q

Gross Negligence

A

the intentional failure to perform a duty in reckless disregard of the consequences to the victim

-a civil cause of action

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34
Q

Conspiracy

A

where two or more people agree to commit an illegal act

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35
Q

The OECD

A

The Organization for Economic Cooperation and Development

-goal is to cultivate democracy and the market economy

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36
Q

Wire Fraud

A

the use of wire communications (computer, telephone, radio, TV) to perpetuate a scheme to defraud a victim of money or property

-only applies to interstate or international communications

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37
Q

RICO

A

The Racketeer Influenced and Corrupt Organizations Act

-prohibits investment of ill gotten gains in another enterprise

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38
Q

Misprision of Felony

A

a crime dealing with the failure to report a crime where there is a legal duty to do so

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39
Q

A Qui Tam Suit

A

when a private individual sues on behalf of the government to recover damages for criminal or fraudulent actions committed against the government

-usually relates to false claims made by government contractors (defense, health care providers)

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40
Q

Adequate Protection Payment

A

Payments made to creditors to compensate them for declines in the value of collateral (property, etc)

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41
Q

To qualify as a secured creditor in a bankruptcy proceeding, the creditor must….

A

Hold a claim for which there is a properly perfected security interest

(eg a UCC filing for personal property or a lien recoded in the county a property is located in)

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42
Q

Administrative expenses in bankruptcy

A

costs associated with the operation of the business and professional fees during the case

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43
Q

Preferential Creditors

A

a third type of creditor that, depending on the jurisdiction, may be paid before GUCs or sometimes secured creditors

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44
Q

USTP

A
  • the U.S. Trustee Program
  • responsible for administering bankruptcy cases (appointing committees, reviewing applications, appearing before the court on certain matters)
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45
Q

A transfer is a fraudulent conveyance if…

A

if the purpose of the asset transfer is to hinder, delay or defraud a creditor

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46
Q

A bustout

A

-a planned and fraudulent bankruptcy

eg, ordering a bunch of stuff on credit and quickly converting those goods into cash

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47
Q

A viatical settlement

A

when a terminally ill patient sells the accelerated death benefit (usually ~80% of value within last year of life) at a discount to a third party

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48
Q

Rule 10b-5

A

the anti-fraud provision of the Securities Exchange Act

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49
Q

consent decrees

A

a form of civil settlement where the party agrees to stop the offending practice but doesn’t admit or deny that they did it

-common for settling SEC civil actions

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50
Q

How did SOX amend the bankruptcy code?

A

made judgements/fines/etc from violating federal securities laws non-dischargeable, so wrongdoers couldn’t shelter assets under bankruptcy protection

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51
Q

Arbitration

A

the process whereby a dispute is submitted to an impartial third person who then decides the outcome of the case

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52
Q

Blue sky laws

A
  • state securities laws
  • origin: judge decision where he describes purpose of these laws as to prevent “schemes that have no more basis than so many feet of blue sky”
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53
Q

Selling Away

A

A securities fraud scheme where an investment professional trades securities that aren’t held or offered by his brokerage firm

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54
Q

Parking

A

A securities fraud scheme where a security is sold with the understanding that the seller will repurchase it later at an agreed-upon price

55
Q

A constructive insider

A

a professional that temporarily has confidential information (accountant/banker/etc) rather than an employee/fiduciary

56
Q

Money laundering

A

the process by which criminals take the proceeds from illegal activity and cause them to appear to be from a legitimate source

57
Q

The three stages of money laundering

A

1- Placement (moving illegal profits to the financial system)
2- Layering (transactions to avoid detection once funds haven’t been deposited and not detected)
3- Integration (integrating illicit funds back into the economy in a way that appears to be a legitimate business transaction)

58
Q

Smurfing

A

Breaking up large deposits into smaller deposits to avoid financial institution reporting thresholds (e.g, >$10K)

59
Q

OCC (Regulator)

A
  • office of the comptroller of currency

- charters, regulates and supervises many national banks

60
Q

OFAC

A
  • office of foreign assets control (within the Treasury)

- administers and enforces sanction policies against foreign orgs (terrorists, drug traffickers’, etc)

61
Q

Circumstantial Evidence

A

evidence that tends to prove or disprove facts in issue indirectly, by inference

62
Q

The IRS statute of limitations for tax fraud

A

three years unless the investigation reveals the taxpayer omitted 25% or more of their income. In that case, it’s six years

63
Q

The Sixth Amendment

Under what circumstances does it apply?

A

grants subjects in a criminal investigation the right to counsel

only applies to state action (eg, an individual being questioned by a private investigator has the right to request an attorney, but there is no legal obligation of the investigator to clear the interview with that attorney or conduct the interview with the attorney present)

64
Q

An Upjohn Warning

A

when company counsel explicitly states that they represent the interests of the company and not those of an employee being interviewed

65
Q

Libel

A

defamation that occurs in written form

66
Q

Slander

A

defamatory remarks that are only spoken

67
Q

Spoliation

A

destroying evidence or making it unavailable

68
Q

The Fourth Amendment

Under what circumstances does it apply?

A

Guarantees the right to be free from unreasonable searches, seizures, arrests

Only applies to actions by the police or other government authorities (eg, certain reasonable private employee searches by their employee are ok)

69
Q

What does a plea of “no lo contendre” mean?

A

That the defendant does not contest the charges but will not formally admit or deny them

-treated same as guilty plea for criminal punishment but, by avoiding admission of guilt, can help defend against civil litigation

70
Q

A Deferred Prosecution Agreement

A

when prosecutors file criminal charges against a company but they agree to not prosecute the claims as long as the company successfully complies with the deferral agreements terms

71
Q

Discovery

A

the formal process by which parties to a litigation collect evidence and learn the details of the opposing side’s case

72
Q

A peremptory challenge

A

allows a litigant to remove someone from the jury panel without comment or justification

AKA - a strike

73
Q

a summons

A

a delivery to tell them that a defendant that a civil suit has been filed against them and they have a certain amount of time to answer (usually 20 days) or suffer a default judgement
-complaint needs to be delivered at same time

74
Q

an answer

A

a written response to the plaintiffs initial complaint

75
Q

a pretrial conference

A

a mandatory conference in a civil action to plan the discovery process

76
Q

Form 35 report

A

sets forth a description of how discovery in a civil action will be handled and will lead to a scheduling order from the court that sets time limits for competing discovery

77
Q

An interrogatory

A

Like a deposition but with written questions that require a written response rather than oral questioning

78
Q

ESI

A

electronically stored information produced in e-discovery

79
Q

metadata

A

data about data, such as the date and user of the last modification of the data

80
Q

A writ of attachment

A

a pretrial motion seeking to secure assets before a trial and prevent the defendant from disposing those assets while the lawsuit is pending

81
Q

Sequestration

A

the act of seizing property that is the subject of a civil action and placing it in the custody of the court

82
Q

a TRO

A
  • Temporary Restraining Order

- an emergency, temporary injunction ordering the defendant to perform/not perform some act

83
Q

The two primary differences between a preliminary injunction and a TRO

A
  • TROs can be entered without a defendant being present and without notice to the other party
  • TROs only last a few days until there is time for a full, adversarial hearing on the merits
84
Q

a dismissal with prejudice vs without prejudice

A
  • with prejudice dismissal means that the court has made a judgment on the merits of the case and the complaint can’t be refiled (only appealed)
  • without prejudice dismissal means that the current proceeding will not continue but the plaintiff may refile the complaint (usually occurs because of a procedural deficit)
85
Q

a motion in limine

A

a pretrial motion that requesting the court to rule that evidence is inadmissible

86
Q

a motion for continuance

A

a pretrial motion that asks the court to postpone a hearing, conference or the upcoming trial

87
Q

the work product doctrine

A

protects an attorneys (and in some cases a consultants) notes and materials from when they’re preparing for civil litigation

88
Q

post-judgement discovery

A

civil action procedures that give a judgment creditor a method of determining the amount and location of the assets that can be used to satisfy a judgement

89
Q

The three basic types of evidence

A

1- testimonial (oral/written statements)
2- real (physical objects/documents)
3- Demonstrative (a visual aid illustrating something but that was not part of the underlying event [eg a map])

90
Q

Inculpatory Evidence

A

shows that an individual is guilty or at fault

91
Q

Exculpatory Evidence

A

clears an individual from fault or guilt

92
Q

The best-evidence rule

A

prohibits a party from orally testifying about the contents of a document without producing the document itself (or proving there is a valid reason why the document can’t be produced)

93
Q

Hearsay

A

A statement that repeats what some other person said while outside of court

94
Q

Impeachment

A

Questioning a witness’s knowledge or credibility in cross-examination

95
Q

Work product protection applies only to documents or things _____.

A

prepared in anticipation of litigation or for the trial

96
Q

Treasury regulations require citizens of the United States and resident aliens to file a ____ when they maintain a financial interest or signature authority over a foreign bank account/s with a balance (or aggregate balance) of more than $10,000 during the calendar year

A

a Report of Foreign Bank and Financial Accounts (FBAR)

97
Q

What legal elements that must be shown to prove a claim for commercial bribery?

A

That the defendant, while acting with corrupt intent and without the victim’s knowledge or consent, gave or received a thing of value that was intended to influence the recipient’s action in a business decision.

98
Q

Commercial Bribery

A

When something of value is offered to a private individual to influence a business decision

99
Q

In cross-examination of an expert witness, the questioning party often will use the “Is it not true?” and “Would you agree with me?” approach. This technique of cross-examination is known as ___.

A

The sounding board cross-examination method

-Makes the witness appear to be a sounding board by generally agreeing with the questioning party’s position

100
Q

____ resulted in U.S. laws prohibiting deceptive and fraudulent practices commonly used in email

A

The CAN-SPAM Act

  • prohibits several deceptive/fraudulent practices commonly used in spam, including using deceptive subject lines, using deceptive header information, and requiring sender identification.
101
Q

The two principal components of the FCPA

A

1- anti-bribery provisions related to foreign govt officials
2- accounting provisions requiring publicly traded companies subject to the FCPA’s jurisdiction to keep accurate books and records and adopt internal controls to prevent improper use of corporate funds.

102
Q

Under FRE, experts can rely on inadmissible hearsay or other inadmissible evidence as long as….

A

it is the type reasonably relied upon by experts in the particular field—a determination that is left to the discretion of the trial judge

e.g, an expert may rely on a table of interest rates taken from a U.S. Department of Commerce (DOC) publication even if the table is not admissible

103
Q

How does an alternative remittance system work?

A

The payer transfers funds to a local broker who has a connection to another broker in the region where the payee is located. The latter broker then distributes the funds to the payee.

-the ledgers kept by the brokers will only keep track of amounts owed and won’t include info about the payers or payees (name, bank account, etc)

104
Q

Brady Material

A

The exculpatory evidence that the prosecution must disclose that is material to guilt or punishment in U.S. criminal cases

105
Q

After a civil jury trial in the United States, the ___ side may appeal from an adverse verdict

A

Either side may appeal, either as to liability or damages

106
Q

A cross-claim

A

an action between parties on the same side of a lawsuit (i.e., suing the person who sues you)

107
Q

Under the U.S. Uniform Securities act, what three conditions that need to be in place before a security can be offered for sale?

A

-A model act guiding state securities laws

1- registration covering the security
2- a registered securities professional
3- full disclosure of material information

108
Q

In a criminal trial, when does the defendant have a right to see prior written statements made by a witness against the accused?

A

After that witness testifies at trial

In practice, these are frequently furnished to the defendant earlier

109
Q

What three things must the plaintiff prove to recover for infliction of emotional distress?

A
  • that the defendant engaged in extreme/outrageous conduct
  • that defendant acted intentionally or recklessly
  • that they actually suffered emotional distress from what the defendant did
110
Q

What federal US Statute criminalized trade secret misappropriation?

A

The Economic Espionage Act

outlawed economic espionage and theft of commercial trade secrets

111
Q

Economic espionage

A

the theft of a trade secret to benefit a foreign government

112
Q

To establish criminal liability for tax evasion, most jurisdictions require….

A

a willful (eg no honest mistake or good faith misunderstanding) attempt to evade taxes

113
Q

When must a miranda warning be read to a suspect?

A

when the suspect is:
1- interrogated
2- while held in custody
3- by government authorities

114
Q

In the United States, when does an arrest occur?

A

When a reasonable person feels they are no longer free to leave

115
Q

What three criteria are necessary to determine before a judge will allow an expert to testify before a jury?

A

1- the expert is qualified
2- the proposed testimony is relevant to the fact at issue
3-the testimony is reliable

116
Q

Section 1001 of the US Code

A

prohibits a person from lying to, or concealing material information from, a federal official

117
Q

Under U.S. federal law, what three criteria need to be proven if a charge for a bankruptcy crime is to be sustained?

A

1- crimes must have been committed during the pendency of a bankruptcy proceeding
2-with the defendant’s knowledge
3- with a fraudulent intent to defeat the bankruptcy laws

118
Q

Generally, in the United States, an appeal may be made only for…..

A

errors of law to which the defendant made timely objection at trial or in pretrial proceedings. The failure to object is said to waive any claims of error.

119
Q

During the opening statement by the prosecution in U.S. criminal trials, they are not allowed to ___

A

argue the case

120
Q

How many judicial circuits are there?

A

12 - 11 numbered judicial circuits and the District of Columbia

121
Q

Money laundering regulations require U.S. financial institutions to implement programs called ____, which are designed to verify the identity of any person seeking to open an account

A

Customer Identification Programs (CIPs)

122
Q

Police must have ___ to briefly detain and question a person for investigative purposes.

A

specific “articulable” reasons

a lesser standard than probably cause

123
Q

How does the fifth amendment privilege work in civil proceedings?

A

It can be invoked but, if it is, the refusal can be disclosed to the jury and the judge may enter sanctions against the party refusing to produce evidence up to and including the entry of a judgment against such party

124
Q

What are the three primary benefits of utilizing a front business for money laundering?

A

1- it provides a safe space for overseeing criminal activity
2- foot traffic won’t arouse undue suspicion
3- provides cover for delivery/transportation related to criminal activity

125
Q

What are “facilitating payments”?

A

aka grease payments

an exception to the FCPA that permits payments made to foreign officials to facilitate the officials’ ability to perform their duties

126
Q

In money laundering, what is the difference between “overstating revenues” and “fictitious revenue”?

A

Overstating revenues occurs when the money launderer records more income on a business’s books than the business actually generates

Fictitious revenue accounts for the illegal funds that are secretly inserted into the company.

127
Q

In order for exhibits to be admissible, they must be…..

A

relevant and established as authentic

128
Q

A frivolous tax return

A

returns that are incorrect on their face or that do not contain enough information to make tax liability determinations

129
Q

Interrogatories are not….

A

binding, and the responding party may offer testimony that is inconsistent with its responses to interrogatories

However, an inconsistent response to an interrogatory can be used to impeach (discredit the testimony of) the witness at trial.

130
Q

What is the purpose of the U.S. Truth in Negotiations Act?

A

Designed to provide for full and fair disclosure by contractors when negotiating with the government.

Requires that government contractors submit cost or pricing data and certify that such information is current, accurate, and complete before the award of any negotiated contract

131
Q

What is “aiding and abetting”?

A

when someone induces another to commit an offense or who aids in its commission

132
Q

The purpose of the authentication requirement in most common law systems is to….

A

ensure that evidence is what it purports to be and is genuine, not a forgery.

133
Q

An insurance prepayment scheme

A

When a money launderer makes advance payments on insurance premiums and uses the policy as a means of legitimate storage of illicit funds

ACFE EXAM (4 decks)

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