Punishing Offenders

Question 1

Which of the following BEST describes the standard of proof for civil trials in civil law jurisdictions?

A. Preponderance of the evidence
B. Clear and convincing
C. More likely than not
D. The inner conviction of the judge

Answer 1

D. The inner conviction of the judge

See pages 2.909 in the Fraud Examiner’s Manual

The standard of proof in civil law jurisdictions typically does not change in criminal and civil trials; it is often described as the inner conviction of the judge, sometimes called the conviction intime standard. This standard requires stronger evidence than the common law preponderance of the evidence standard used in civil trials but not as much as the common law beyond a reasonable doubt standard used in criminal trials.

Question 2

Which of the following is a method of pretrial civil discovery that is used in most common law jurisdictions?

A. Injunctions
B. Pretrial written examinations
C. Indictments
D. Requests for agreement

Answer 2

B. Pretrial written examinations

See pages 2.904 in the Fraud Examiner’s Manual

In common law jurisdictions, a party may be examined or questioned by the other party either orally or through written questions during the pretrial stage of litigation. A pretrial written examination for discovery, or interrogatory, is a list of questions that the party, usually through a lawyer, is required to answer in writing.

Question 3

XYZ Manufacturing has a document retention policy in which emails are automatically deleted after a specified period. A trading partner filed a civil lawsuit against XYZ in a civil law jurisdiction, claiming that XYZ sent fraudulent invoices via email. Under most civil law systems, the court would establish when XYZ should preserve and produce documents.

A. True
B. False

Answer 3

A. True

See pages 2.903 in the Fraud Examiner’s Manual

Most civil litigation concerning fraud involves many documents, tangible items, or digital information that might serve as evidence. Each jurisdiction has rules for how potential evidence should be handled.

Typically, in civil law jurisdictions, the issue of when to take affirmative steps to preserve evidence is established by the court, meaning the court will dictate what evidence must be preserved and produced by the parties or others with relevant information. Due to privacy requirements in many civil law jurisdictions, retaining personal information (a very broad class of information regarding individuals) for longer than necessary might be illegal without a court order.

By contrast, common law jurisdictions generally impose a duty on parties in civil litigation to take affirmative steps to preserve relevant evidence, and this duty might begin prior to the commencement of litigation. For litigation occurring in common law courts, the duty to preserve relevant evidence typically begins when the litigation in question is reasonably anticipated.

Question 4

Prosecutorial bargaining does NOT occur in civil law systems.

A. True
B. False

Answer 4

B. False

See pages 2.805 in the Fraud Examiner’s Manual

A method of disposing of cases in a growing number of countries is through bargaining agreements, which occur when a defendant makes an agreement with prosecutors to plead guilty or submit a recorded confession in exchange for lesser charges or a reduced sentence. Most civil law countries do not have pleas, per se (i.e., there is no option to enter a guilty plea), but there can still be bargaining agreements. A defendant can enter a confession, but the confession is submitted as evidence in an otherwise standard proceeding. However, a confession in evidence clearly reduces the difficulty of prosecuting the case, so the prosecution, the defendant, and the court can agree to reduce the sentence in exchange for a voluntary confession.

Question 5

Under the United Nations’ (UN) International Covenant on Civil and Political Rights (ICCPR), those accused of criminal charges are generally entitled to a fair hearing that is private, the results of which should NOT be disclosed to the public.

A. True
B. False

Answer 5

B. False

See pages 2.801-2.802 in the Fraud Examiner’s Manual

Most countries have signed and ratified the United Nations’ (UN) International Covenant on Civil and Political Rights (ICCPR), which commits them to recognizing various rights of citizens. Part III of the ICCPR includes the rights of those accused of crimes. As one of these rights, the ICCPR states that all people accused of crimes are entitled to a fair hearing before a court or other tribunal and that the results of the trial should be made public to protect the system’s transparency. This right includes:

• Adequate time to prepare a defense
• The ability to be represented by legal counsel of the defendant’s choosing and to freely communicate with counsel
• The right to have accusations and the procedures explained through a translator for free, if necessary
• The right to be tried for charges without undue delay
• The right to examine or have examined the witnesses against the accused
• Freedom from testifying against oneself or compelled confessions

Question 6

The United Nations’ (UN) International Covenant on Civil and Political Rights (ICCPR) guarantees which of the following rights?

A. Right of the accused to be informed of criminal charges
B. The presumption of innocence until the accused is proven guilty according to law
C. Freedom from arbitrary arrests
D. All of the above

Answer 6

D. All of the above

See pages 2.801-2.803 in the Fraud Examiner’s Manual

Most countries have signed and ratified the United Nations’ (UN) International Covenant on Civil and Political Rights (ICCPR), which commits them to recognizing various rights of citizens. Part III of the ICCPR includes the rights of those accused of crimes. Among the rights most relevant to fraud examiners, the ICCPR entitles the criminally accused to the following:

• Freedom from arbitrary arrest or detention
• Right of the accused to be informed of criminal charges
• Right to a fair hearing
• Presumption of innocence until proven guilty according to law
• Right to appeal a criminal conviction and sentence
• Right to privacy and protection from privacy violations

Question 7

Fidelity insurance financially covers a party against losses caused by customers.

A. True
B. False

Answer 7

B. False

See pages 2.911 in the Fraud Examiner’s Manual

Given the prevalence of fraud and that it is difficult to recover all losses from fraud, many businesses have fidelity insurance that covers fraud losses. Fidelity insurance (also known as crime insurance and employee dishonesty insurance) is often overlooked as a method of recovery for losses due to internal fraud. Fidelity insurance is a type of insurance under which the insured entity is covered against losses caused by the dishonest or fraudulent acts of its employees. Dishonest or fraudulent acts are typically defined as those acts committed with the intent to:

• Cause the insured to sustain a loss.
• Obtain a financial benefit for the employee or for any third party intended by the employee, other than their proper compensation.

Question 8

Gerald is involved in pretrial civil litigation in a common law jurisdiction and believes the other party knows several facts that are relevant to the case. Which of the following statements is MOST ACCURATE?

A. Gerald must wait for the judge to obtain the information during the judge’s investigation.
B. Gerald may not request any information from the other party in pretrial civil litigation.
C. Gerald will have to wait until trial to request that the other party provide this information.
D. Gerald may request the information from the party through a written pretrial examination.

Answer 8

D. Gerald may request the information from the party through a written pretrial examination.

See pages 2.903-2.904 in the Fraud Examiner’s Manual

After the parties have submitted pleadings to the court, the evidence-gathering process begins. The system for collecting evidence varies from country to country, especially along the lines of adversarial processes (generally common law systems) and inquisitorial processes (generally civil law systems).

In common law jurisdictions, a party may be examined or questioned by the other party either orally or through written questions. Some common law jurisdictions might not allow for pretrial oral discovery although pretrial written discovery is still available. A written examination for discovery, or interrogatory, is a list of questions that the party, usually through a lawyer, is required to answer in writing.

Question 9

The judge primarily drives the criminal discovery process in both adversarial and inquisitorial jurisdictions.

A. True
B. False

Answer 9

B. False

See pages 2.812 in the Fraud Examiner’s Manual

In adversarial jurisdictions, the parties involved in litigation primarily drive the discovery process while the judge ensures that discovery procedures are followed correctly.

A judge drives criminal discovery in inquisitorial jurisdictions. Some inquisitorial jurisdictions have two types of judges: the examining judge and the trial judge. Examining judges oversee the evidence-collection process in criminal proceedings while trial judges preside over the trial. The trial judge presents evidence collected previously, questions witnesses, hears arguments, and makes rulings. In some jurisdictions, however, prosecutors share or replace the role of examining judges while other jurisdictions have a single type of judge who is responsible for both overseeing investigations and performing trial functions.

Question 10

During the examining phase of a criminal proceeding in inquisitorial jurisdictions, a judge or magistrate reviews evidence from the investigation, collects further evidence, and creates the written evidentiary record to be used at trial.

A. True
B. False

Answer 10

A. True

See pages 2.812-2.813 in the Fraud Examiner’s Manual

Criminal proceedings in inquisitorial jurisdictions are typically divided into three phases: the investigative phase, the examining phase, and the trial. The discovery process occurs primarily in the first two of these three phases.

• In the investigative stage, the public prosecutor, judge, or both (depending on the jurisdiction’s process) collect documentary and tangible evidence regarding the case. The investigating party then decides whether there is sufficient evidence to submit the case for prosecution.
• If there is sufficient evidence, the case moves to the examining phase, which is mostly conducted in writing. The judge completes a written record of the evidence and may also collect testimony and additional evidence. If the judge certifies that there is a valid case against the accused, the matter moves to trial.
• The trial commences with the exhibition of the examining record before the parties and the trial judge, jury, or panel. The parties argue their case before the trial judge (or jury, if applicable).

In inquisitorial trial proceedings, the evidentiary record is already available at the outset of the trial whereas the entirety of each party’s evidence is produced and recorded at trial in adversarial jurisdictions.

Question 11

In most common law countries, a criminal appellate court is generally permitted to make its own legal conclusions but NOT its own factual determinations when reviewing a case.

A. True
B. False

Answer 11

A. True

See pages 2.819 in the Fraud Examiner’s Manual

Common law and civil law systems approach appeals in different ways. In most common law countries, appellate courts consider potential errors of law de novo (meaning they evaluate them independently of the trial court’s determinations), but they generally adopt the factual findings of the trial court. No jury is present, and there is typically no new evidence entered into the record. Therefore, appeals in common law systems are typically limited to issues of law. Very rarely will an appellate court reverse a factual finding of the trial court in a common law jurisdiction, such as when there is an egregious and obvious mistake.

In most civil law systems, courts can review cases for both issues of fact and law. The appellate court can usually perform de novo reviews of both the factual and legal determinations by evaluating the compiled evidentiary record.

Question 12

In most common law systems, relevant documents in civil cases are listed and described by the party that holds them in which of the following formats?

A. Writ of attachment
B. Affidavit of documents or records
C. Injunctions list
D. Subpoena coram non judice

Answer 12

B. Affidavit of documents or records

See pages 2.904 in the Fraud Examiner’s Manual

After statements of claim and defense are filed in common law jurisdictions, each party is entitled to pretrial discovery. In most common law jurisdictions, each party must file an affidavit of documents, or affidavit of records, which lists and describes all documents in its possession that are relevant to any matter in the case. The party filing the affidavit must allow the other party to inspect or copy any such documents. If any of the documents are privileged, the privilege should be asserted in the affidavit of documents. If requested, the judge will examine the documents to determine if the privilege applies.

Some jurisdictions also allow the parties to make a request for documents or records, in which they ask another party to turn over a specific document or other record.

Question 13

In jurisdictions that recognize corporate criminal liability, to find a corporation vicariously liable for the acts of one of its employees, it is typically necessary that someone in management was involved in the offense or knew about the offense and should have stopped it.

A. True
B. False

Answer 13

B. False

See pages 2.819-2.820 in the Fraud Examiner’s Manual

In many jurisdictions, corporations and similar business entities may be vicariously liable (the absolute liability of one party for the misconduct of another party) for criminal and civil violations. Typically, a business entity is liable for the acts of its employees if those acts occur within the scope of employment and with some intent to benefit the corporation. Therefore, the employee needs to have committed each element of the crime for liability to be transferred to the corporation.

Generally, vicarious liability is very broad and imposes liability on a corporation even if those in management had no knowledge of or participation in the underlying events. Moreover, the acts of any employee, from the lowest clerk to the chief executive officer (CEO), can impute liability upon a corporation, and a corporation may be liable for the acts of its employees that violate securities laws, banking laws, anti-bribery laws, and many others.

Question 14

Which of the following accurately describes a benefit of deferred prosecution agreements?

A. They help the justice system resolve a corporate case while still punishing misconduct
B. They help reduce the risk of illegal practices within an organization
C. They encourage an organization to reform poor policies
D. All of the above

Answer 14

D. All of the above

See pages 2.821 in the Fraud Examiner’s Manual

Some jurisdictions that allow for corporate criminal liability also use deferred prosecution agreements. Generally, deferred prosecution agreements occur when prosecutors file criminal charges against a company, but then they agree not to prosecute the claims if the company successfully complies with the deferral agreement’s terms. These requirements typically focus on getting the business to reform its policies and reduce the risk of illegal practices. Essentially, deferred prosecution agreements help companies avoid indictment, trial, and conviction while providing a jurisdiction’s justice system with another channel for resolving a corporate case that punishes misconduct and effectuates changes in a company’s culture.

Similar to plea bargaining, deferred prosecution agreements are controversial, and many countries do not provide for such resolutions of criminal cases. However, the complexity and public cost of trying massive fraud cases have caused more jurisdictions to adopt such strategies.

Question 15

In common law jurisdictions, civil juries must be composed of the same number of jurors as in the jurisdiction’s criminal trials.

A. True
B. False

Answer 15

B. False

See pages 2.907 in the Fraud Examiner’s Manual

When juries are used for civil trials in common law jurisdictions, the requirements are typically less stringent than in criminal trials. For instance, it is common for the minimum number of jurors to be lower for civil cases. Additionally, in many jurisdictions, civil trials are less likely to require a unanimous jury verdict than criminal trials.

Question 16

Generally, after a civil trial, only the losing side may appeal from an adverse judgment.

A. True
B. False

Answer 16

B. False

See pages 2.909 in the Fraud Examiner’s Manual

Generally, both sides in a civil case may appeal from an adverse judgment, either as to liability or damages.

In common law systems, the appellate court is largely limited to reviewing the legal decision of the trial court, rather than the factual determination of the judge or jury. The appeals court may reverse and remand for a new trial on some or all of the issues; order that a certain portion of the awarded damages be remitted; or enter final judgment, if legal grounds are clear, in favor of either party.

In most civil law systems, the civil appellate court may review issues of both law and fact, meaning it may obtain additional witness testimony, gather new documentary evidence, and obtain new expert opinions. The appellate court may reverse, affirm, remand for additional proceedings, and (in some jurisdictions) modify the trial court’s decision.

Question 17

Which of the following is a criminal sanction that requires defendants to pay back victims for the money or property that they lost?

A. Restitution
B. Criminal forfeiture
C. Criminal fine
D. Determinate sentence

Answer 17

A. Restitution

See pages 2.817-2.818 in the Fraud Examiner’s Manual

When a defendant is found guilty of a crime, there are a variety of sanctions available to the judge or the jury. Depending on the jurisdiction and the crime, available sanctions may include probation, imprisonment, fines, restitution, and forfeiture.

In most jurisdictions, courts can order defendants to make restitution (i.e., pay money) to crime victims for the money or property they lost. For example, a defendant who is convicted of embezzling $10,000 from their employer might be sentenced to 5 years in prison and ordered to make restitution to the employer in the amount of $10,000.

In some jurisdictions, defendants can be ordered to transfer specific property to the government as part of their sentence. This is called criminal forfeiture, and it generally involves property that was used to commit a crime. For example, if a defendant used their house to manufacture illegal drugs, the government might be able to seize the house.

If the defendant is sentenced to imprisonment, the sentence may be made under rules that dictate a determinate sentence (e.g., 5 years) or an indeterminate sentence (e.g., 5–10 years).

Question 18

Which of the following is the alternative dispute process whereby an impartial third person assists the parties in a dispute with reaching a mutually agreeable settlement?

A. Propitiation
B. Court-annexed conciliation
C. Mediation
D. Arbitration

Answer 18

C. Mediation

See pages 2.912 in the Fraud Examiner’s Manual

Alternative dispute resolution in fraud cases usually involves one of two types of methods: mediation or arbitration. Mediation is the process whereby an impartial third person (i.e., a mediator) assists the parties in reaching a resolution to the dispute. The mediator does not decide who should win but instead works with the parties to reach a mutually agreeable settlement. Arbitration is the process whereby a dispute is submitted to an impartial third person (known as an arbitrator) who then decides the outcome of the case (i.e., which party should win). The arbitrator acts as a judge or jury by deciding the case on its merits.

Question 19

When does the duty to preserve relevant evidence regarding civil litigation typically begin in common law countries?

A. A short period after the plaintiff files the lawsuit, typically thirty days
B. When litigation is reasonably anticipated
C. As soon as the defendant files an answer or response to the plaintiff’s pleading or complaint
D. As soon as the plaintiff files the lawsuit

Answer 19

B. When litigation is reasonably anticipated

See pages 2.903 in the Fraud Examiner’s Manual

Most civil litigation concerning fraud involves many documents, tangible items, or digital information that might serve as evidence. Each jurisdiction has rules for how potential evidence should be handled.

Generally, common law jurisdictions impose a duty on parties in civil litigation to take affirmative steps to preserve relevant evidence, and this duty might begin prior to the commencement of litigation. For litigation occurring in common law courts, the duty to preserve relevant evidence typically begins when the litigation in question is reasonably anticipated. For instance, if a company receives a letter from a vendor making a credible allegation of fraud and a threat to sue, then the company’s duty to preserve evidence has most likely begun.

By contrast, in civil law jurisdictions, the issue of when to take affirmative steps to preserve evidence is established by the court, meaning the court will dictate what evidence must be preserved and produced by the parties or others with relevant information.

Question 20

In civil cases in some common law jurisdictions, the jury verdict does NOT need to be unanimous.

A. True
B. False

Answer 20

A. True

See pages 2.907 in the Fraud Examiner’s Manual

When juries are used for civil trials in common law jurisdictions, the requirements are typically less stringent than in criminal trials. For instance, it is common for the minimum number of jurors to be lower for civil cases. Additionally, in many jurisdictions, civil trials are less likely to require a unanimous jury verdict than criminal trials.

Question 21

In most jurisdictions, police must always have a warrant to arrest a person for investigative purposes.

A. True
B. False

Answer 21

B. False

See pages 2.801-2.802 in the Fraud Examiner’s Manual

Most countries provide some degree of protection from unreasonable arrests by the government. Generally, the government may not make an arrest unless there is a good reason to believe that the suspect committed an offense. Many countries require a warrant signed by a judge or magistrate to authorize an arrest. However, even where warrants are required, there are typically exceptions that allow law enforcement officials to make arrests without warrants. Examples of such exceptions include:

• An offense that occurred in the presence of an officer
• The discovery of contraband in the suspect’s possession
• Emergency situations

Question 22

In an arbitration proceeding, the arbitrator acts as a judge or jury by deciding the outcome of the case.

A. True
B. False

Answer 22

A. True

See pages 2.912-2.913 in the Fraud Examiner’s Manual

Arbitration is the process whereby a dispute is submitted to an impartial third person (known as an arbitrator) who then decides the outcome of the case (i.e., which party should win). The arbitrator acts as a judge or jury by deciding the case on its merits. Arbitration can be either binding or nonbinding. If the arbitration is binding, then the decision of the arbitrator is final, and the parties cannot later submit their dispute to a judge or jury for determination. Conversely, if the arbitration is nonbinding, the arbitrator’s determination is not binding upon the parties.

Question 23

Two parties entered into a real estate contract for various properties, but the vague nature of the contract led to confusion about who owned a particular property. The parties took the issue to court, and the court interpreted and stated the rights of each party under the contract. What type of remedy did the court provide?

A. Monetary relief
B. Exemplary damages
C. Declaratory relief
D. Punitive damages

Answer 23

C. Declaratory relief

See pages 2.910-2.911 in the Fraud Examiner’s Manual

If the plaintiff in a civil case prevails, the remedy to which the plaintiff is entitled depends upon a number of factors, such as the relief sought, the facts, and the authority given to the court to grant specific relief. There are various types of civil remedies, but the following three types are most common: monetary remedies (damages), declaratory remedies, and equitable remedies.

Declaratory remedies are those in which the court states or declares the rights of the parties. For example, when a court interprets a will or a contract, its decision is declaratory in nature. Similarly, the decision of a court as to the ownership of personal property or land is also declaratory.

Question 24

In jurisdictions that recognize corporate criminal liability, which of the following is required to hold the corporation vicariously liable for the acts of one of its employees?

A. The employee was acting for the benefit of the corporation
B. The employee was acting within the scope of their employment
C. An employee committed each element of a criminal violation
D. All of the above

Answer 24

D. All of the above

See pages 2.819-2.820 in the Fraud Examiner’s Manual

In many jurisdictions, corporations and similar business entities may be vicariously liable (the absolute liability of one party for the misconduct of another party) for criminal and civil violations. Typically, a business entity is liable for the acts of its employees if those acts occur within the scope of employment and with some intent to benefit the corporation. Therefore, the employee needs to have committed each element of the crime for liability to be transferred to the corporation.

Generally, vicarious liability is very broad and imposes liability on a corporation even if those in management had no knowledge of or participation in the underlying events. Moreover, the acts of any employee, from the lowest clerk to the chief executive officer (CEO), can impute liability upon a corporation, and a corporation may be liable for the acts of its employees that violate securities laws, banking laws, anti-bribery laws, and many others.

Question 25

Which of the following statements concerning criminal bargaining agreements is MOST ACCURATE?

A. Bargaining agreements are more commonly accepted in common law jurisdictions than in civil law jurisdictions.
B. Bargaining agreements are more commonly accepted in civil law jurisdictions than in common law jurisdictions.
C. Bargaining agreements are only allowed in civil law jurisdictions.
D. Bargaining agreements are only allowed in common law jurisdictions.

Answer 25

A. Bargaining agreements are more commonly accepted in common law jurisdictions than in civil law jurisdictions.

See pages 2.805 in the Fraud Examiner’s Manual

A method of disposing of cases in a growing number of countries is through bargaining agreements, which occur when a defendant makes an agreement with prosecutors to plead guilty or submit a recorded confession in exchange for lesser charges or a reduced sentence. It is usually within the prosecutor’s discretion as to whether to offer a bargain. The practice has become more popular in the last few decades, and many countries that previously resisted using bargaining agreements have introduced them in various circumstances. The bargaining process works differently in common law and civil law countries. Bargaining agreements are controversial in many countries and are not as widely used in civil law jurisdictions as in common law jurisdictions. Additionally, when they are allowed in civil law jurisdictions, the circumstances under which they are available are typically more limited.

Question 26

In criminal trials in common law jurisdictions, a jury must serve as the fact finder.

A. True
B. False

Answer 26

B. False

See pages 2.810 in the Fraud Examiner’s Manual

While jury trials are typically used in criminal proceedings in common law jurisdictions, this is not always the case. For some cases, usually minor criminal offenses, a jury trial might not be available. In serious cases, however, jury trials are typically available. Additionally, many common law jurisdictions allow the defendant to waive the right to trial by jury. When no jury is present, the judge serves as the fact finder.

Question 27

The commencement of a civil action begins with the filing of a(n):

A. Supposition, usually in the jurisdiction in which the defendant resides
B. Information, usually in the jurisdiction in which the plaintiff resides
C. Pleading, usually in the jurisdiction in which the defendant resides or where the claim originated
D. Information, usually in the jurisdiction in which the defendant or plaintiff resides or where the claim arose

Answer 27

C. Pleading, usually in the jurisdiction in which the defendant resides or where the claim originated

See pages 2.901 in the Fraud Examiner’s Manual

A civil action begins when the plaintiff files a pleading with the appropriate court, usually in the jurisdiction in which the defendant resides or where the claim originated. The pleading sets out the complaint against the defendant and the remedy that the plaintiff is seeking. Depending on the practice and procedure of the court in which the action is commenced, such a document may be called a writ of summons, a statement of claim, a complaint, a declaration, a petition, or an application.

Question 28

Which of the following statements concerning the United Nations’ (UN) International Covenant on Civil and Political Rights (ICCPR) is FALSE?

A. It states that the right of the accused to a fair hearing includes the right to examine or have examined witnesses against the accused.
B. It states that the right of the accused to a fair hearing includes the right to a trial by a jury.
C. It states that the right of the accused to a fair hearing includes adequate time to prepare a defense.
D. It states that the results of criminal hearings should be publicized in most cases to promote transparency in the system.

Answer 28

B. It states that the right of the accused to a fair hearing includes the right to a trial by a jury.

See pages 2.801-2.802 in the Fraud Examiner’s Manual

Most countries have signed and ratified the United Nations’ (UN) International Covenant on Civil and Political Rights (ICCPR), which commits them to recognizing various rights of citizens. Part III of the ICCPR includes the rights of those accused of crimes. As one of these rights, the ICCPR states that all people accused of crimes are entitled to a fair hearing before a court or other tribunal and that the results of the trial should be made public to protect the system’s transparency. This right includes:

• Adequate time to prepare a defense
• The ability to be represented by legal counsel of the defendant’s choosing and to freely communicate with counsel
• The right to have accusations and the procedures explained through a translator for free, if necessary
• The right to be tried for charges without undue delay
• The right to examine or have examined the witnesses against the accused
• Freedom from testifying against oneself or compelled confessions

While the ICCPR states that countries should establish a right to a fair and impartial hearing, it does not specifically require a trial by a jury.

Question 29

Which of the following types of remedies in civil litigation involves the victim recovering money from the defendant for compensation, reimbursement, or reparation for the defendant’s offense?

A. Declaratory relief
B. Damages
C. Injunction
D. Equitable relief

Answer 29

B. Damages

See pages 2.910 in the Fraud Examiner’s Manual

If the plaintiff in a civil case prevails, the remedy to which the plaintiff is entitled depends upon a number of factors, such as the relief sought, the facts, and the authority given to the court to grant specific relief. There are various types of civil remedies, but the following three types are most common: monetary remedies (damages), declaratory remedies, and equitable remedies.

Damages are remedies for the victim’s recovery of money from the defendant because of, and as compensation, reimbursement, or reparation for, the defendant’s legal offense. Damages are the remedy most commonly available to the successful plaintiff, and the main purpose of damages is to compensate the plaintiff for the loss caused by the defendant.

Question 30

In connection with a multimillion-dollar Ponzi scheme, Bart often held presentations for potential investors at his mansion in Florida. When Bart was later convicted of fraud at a criminal trial, he was ordered to transfer ownership of his mansion to the government as part of his sentence. Which type of criminal sanction does this MOST ACCURATELY describe?

A. Indeterminate sentence
B. Probation
C. Restitution
D. Criminal forfeiture

Answer 30

D. Criminal forfeiture

See pages 2.817-2.818 in the Fraud Examiner’s Manual

When a defendant is found guilty of a crime, there are a variety of sanctions available to the judge or the jury. Depending on the jurisdiction and the crime, available sanctions may include probation, imprisonment, fines, restitution, and forfeiture.

In some jurisdictions, defendants can be ordered to transfer specific property to the government as part of their sentence. This is called criminal forfeiture, and it generally involves property that was used to commit a crime. The order requiring Bart to transfer ownership of his mansion to the government is an example of criminal forfeiture.

In most jurisdictions, courts can order defendants to make restitution (i.e., pay money) to crime victims for the money or property they lost. For example, a defendant who is convicted of embezzling $10,000 from their employer might be sentenced to 5 years in prison and ordered to make restitution to the employer in the amount of $10,000.

If the defendant is sentenced to imprisonment, the sentence may be made under rules that dictate a determinate sentence (e.g., 5 years) or an indeterminate sentence (e.g., 5–10 years).

Probation is the suspension of an offender’s sentence in return for a promise of good behavior. Unlike parole, probation is typically a sentence imposed prior to (and instead of) imprisonment.

Question 31

In common law jurisdictions, which of the following parties typically serves as the fact finder in criminal trials?

A. The prosecution
B. A jury
C. The judge
D. One professional judge and a panel of lay judges

Answer 31

B. A jury

See pages 2.810 in the Fraud Examiner’s Manual

While jury trials are typically used in criminal proceedings in common law jurisdictions, this is not always the case. For some cases, usually minor criminal offenses, a jury trial might not be available. In serious cases, however, jury trials are typically available. Additionally, many common law jurisdictions allow the defendant to waive the right to trial by jury. When no jury is present, the judge serves as the fact finder.

Question 32

Which of the following statements concerning probation is MOST ACCURATE?

A. Probation typically occurs when an offender’s jail sentence is suspended in exchange for a promise of good behavior and being placed under supervision within the community.
B. Probation is an alternative to incarceration whereby the offender’s conviction is reversed in exchange for paying a fine and promising good behavior.
C. Probation typically occurs after the defendant has been incarcerated.
D. Probation typically occurs before the prosecutor brings charges against the defendant.

Answer 32

A. Probation typically occurs when an offender’s jail sentence is suspended in exchange for a promise of good behavior and being placed under supervision within the community.

See pages 2.817 in the Fraud Examiner’s Manual

When a defendant is found guilty of a crime, there are a variety of sanctions available to the judge and, when they are charged with imposing sentences, the jury as well. Depending on the jurisdiction and the crime, available sanctions may include probation, imprisonment, fines, restitution, and forfeiture.

Probation is the suspension of an offender’s sentence in return for a promise of good behavior. Unlike parole, which involves a supervised release from prison after part of a sentence has been served, probation is typically a sentence imposed prior to (and instead of) imprisonment. Probation laws vary by jurisdiction, but the offender is generally placed under the control and guidance of a government agent (e.g., probation officer), who ensures that the conditions of probation are met.

Question 33

In countries that require arrest warrants, which of the following is NOT a typical exception to the warrant requirement?

A. The person is arrested at home.
B. An emergency situation occurs.
C. Contraband is discovered in the suspect’s possession.
D. The offense occurs in the presence of a police officer.

Answer 33

A. The person is arrested at home.

See pages 2.801-2.802 in the Fraud Examiner’s Manual

Most countries provide some degree of protection from unreasonable arrests by the government. Generally, the government may not make an arrest unless there is a good reason to believe that the suspect committed an offense. Many countries require a warrant signed by a judge or magistrate to authorize an arrest. However, even where warrants are required, there are typically exceptions that allow law enforcement officials to make arrests without warrants. Examples of such exceptions include:

• An offense that occurred in the presence of an officer
• The discovery of contraband in the suspect’s possession
• Emergency situations

Question 34

In jurisdictions that allow criminal bargaining agreements, which of the following parties generally has the discretion to decide whether to settle charges with a bargaining agreement?

A. The jury
B. The defendant’s counsel
C. The prosecution
D. All of the above

Answer 34

C. The prosecution

See pages 2.804-2.805 in the Fraud Examiner’s Manual

Whether criminal cases are brought to trial might depend on prosecutorial discretion, meaning that the decision to prosecute and the decision to allow a bargaining agreement are left to the discretion of the appropriate jurisdictional authority. All countries provide some measure of prosecutorial discretion; the prosecutor will not (theoretically) pursue cases for which there is no evidence. However, countries vary widely on how much discretion the government has to prosecute criminal cases—from almost total discretion to almost none. Where bargaining agreements are acceptable practice, the discretion is generally with the prosecution.

Question 35

An injunction is a type of equitable remedy in which a court orders a party to perform, or refrain from performing, a specific act.

A. True
B. False

Answer 35

A. True

See pages 2.910-2.911 in the Fraud Examiner’s Manual

If the plaintiff in a civil case prevails, the remedy to which the plaintiff is entitled depends upon a number of factors, such as the relief sought, the facts, and the authority given to the court to grant specific relief. There are various types of civil remedies, but the following three types are most common: monetary remedies (damages), declaratory remedies, and equitable remedies.

Equitable remedies are remedies used when the legal remedy by itself would be inadequate compensation for the wrong suffered. That is, equitable remedies are used when the plaintiff has no adequate remedy at law (i.e., damages are inadequate). One of the primary equitable remedies is the injunction, which is a court order by which a party is required to perform, or is restrained from performing, a specific act.

Question 36

In most common law jurisdictions, to prevail in a criminal case, the prosecution must prove its case ___________________.

A. True beyond any possible doubt
B. Beyond a reasonable doubt
C. With clear and convincing evidence
D. By a preponderance of the evidence

Answer 36

B. Beyond a reasonable doubt

See pages 2.807-2.808 in the Fraud Examiner’s Manual

The burden of proof is the evidence one party must present to prove each element of a cause of action. In criminal cases, the burden of proof is typically the highest level found in the jurisdiction. In most common law systems, the burden is phrased as beyond a reasonable doubt; therefore, the verdict must be based on assurance beyond a reasonable doubt. Plainly put, “beyond a reasonable doubt” requires the fact finder to be as certain as possible that the defendant is guilty of the charges against them.

Question 37

In both adversarial and inquisitorial jurisdictions, most criminal discovery occurs during the trial stage.

A. True
B. False

Answer 37

B. False

See pages 2.812 in the Fraud Examiner’s Manual

The adversarial process can be divided into the pretrial and trial stages. Most discovery between the parties is conducted in the pretrial stage.

Criminal proceedings in inquisitorial jurisdictions are typically divided into three phases: the investigative phase, the examining phase, and the trial. The discovery process occurs primarily in the first two of these three phases.

Question 38

In adversarial jurisdictions, the parties involved in litigation typically cannot request evidence from each other until the trial begins.

A. True
B. False

Answer 38

B. False

See pages 2.812 in the Fraud Examiner’s Manual

In adversarial jurisdictions, the parties involved in litigation primarily drive the discovery process while the judge ensures that discovery procedures are followed correctly.

The adversarial process can be divided into the pretrial and trial stages. Most discovery between the parties is conducted in the pretrial stage. Both parties may request limited information from each other, and alleged failures to comply with evidentiary rules may be submitted to the judge, who may then order a party to comply. The prosecution, working with law enforcement, gathers all evidence on the government’s behalf. Some evidence, however, will not be available to a party until the opposing party introduces it as evidence during the trial.

Question 39

In a civil action for fraud, a court orders a defendant not to spend the proceeds of the alleged fraud or transfer any property while the lawsuit is ongoing. Which type of provisional remedy does this BEST describe?

A. Writ of summons
B. Prejudgment attachment
C. Summary judgment
D. Declaratory judgment

Answer 39

B. Prejudgment attachment

See pages 2.907 in the Fraud Examiner’s Manual

In most jurisdictions, plaintiffs in fraud cases can seek a court order to prevent the defendant or a third party from disposing of, spending, damaging, transferring, or concealing assets or property while the lawsuit is pending. These court orders are generally known as prejudgment attachments. Depending on the jurisdiction, however, the order may be called a freezing order, a precautionary attachment, a preventative injunction, or a similar term. In some jurisdictions, courts also have the authority to seize assets or property temporarily while the lawsuit is pending.

Question 40

In civil law jurisdictions, the judge typically serves as the fact finder in criminal proceedings.

A. True
B. False

Answer 40

A. True

See pages 2.811 in the Fraud Examiner’s Manual

In civil law systems, the judge typically serves as the fact finder. Juries are less frequently used in civil law systems; they are usually reserved for serious crimes, and some countries do not use them at all. Several civil law systems feature a mixture of judges and laypersons when juries are used. For instance, a panel could have three judges and nine laypersons decide the outcome of the case. Alternatively, some countries (those following the German model) feature criminal trials with a panel of both professional and lay judges. These panels are unlike juries in the sense that they do not include randomly selected peers of the defendant, but they serve a fact-finding function that is similar to juries.

Question 41

Which of the following BEST describes the government’s burden of proof in criminal cases in civil law jurisdictions that use an inquisitorial court process?

A. Absolute certainty
B. Inner conviction of the judge
C. More likely than not
D. Beyond a reasonable doubt

Answer 41

B. Inner conviction of the judge

See pages 2.807-2.808 in the Fraud Examiner’s Manual

The burden of proof is the evidence one party must present to prove each element of a cause of action. Most civil law systems that use an inquisitorial court process apply a different standard than beyond a reasonable doubt, which is used in most common law jurisdictions. This civil law standard is sometimes called the conviction intime or inner conviction of the judge. It means that the fact finder needs to be convinced at an inner, deep-seated level. While this standard is still quite high, it is generally thought to be somewhat less certain than beyond a reasonable doubt. Additionally, civil law systems typically have the same burden of proof for civil and criminal cases.

Question 42

Which of the following claims in a civil lawsuit would be considered a counterclaim?

A. A defendant’s claim against the original plaintiff of the action
B. A defendant’s claim against another defendant in the same proceeding
C. A plaintiff’s challenge of the ruling in another case
D. A plaintiff’s response to a defendant’s affirmative defense

Answer 42

A. A defendant’s claim against the original plaintiff of the action

See pages 2.902 in the Fraud Examiner’s Manual

In addition to allowing defenses against the plaintiff’s claims, many jurisdictions allow the defendant to raise a counterclaim (also known as a countersuit) in which the defendant levels a claim against the plaintiff. The specifics of the counterclaim might be filed as part of the defendant’s answer or as a separate document. If a defendant files a counterclaim, then the counterclaim and the original complaint will be tried concurrently, and a final judgment will be issued regarding each side’s claim.

Question 43

A prejudgment attachment is a court order that prevents a defendant or a third party from disposing of, spending, damaging, transferring, or concealing assets or property while a lawsuit is pending.

A. True
B. False

Answer 43

A. True

See pages 2.907 in the Fraud Examiner’s Manual

In most jurisdictions, plaintiffs in fraud cases can seek a court order to prevent the defendant or a third party from disposing of, spending, damaging, transferring, or concealing assets or property while the lawsuit is pending. These court orders are generally known as prejudgment attachments. Depending on the jurisdiction, however, the order may be called a freezing order, a precautionary attachment, a preventative injunction, or a similar term. In some jurisdictions, courts also have the authority to seize assets or property temporarily while the lawsuit is pending.

Question 44

Which of the following statements concerning the alternative dispute resolution process is CORRECT?

A. Arbitration decisions are always binding.
B. Mediation agreements are enforceable as binding contracts.
C. Arbitration decisions are binding until a party challenges the decision in court.
D. Mediation agreements are generally nonbinding.

Answer 44

B. Mediation agreements are enforceable as binding contracts.

See pages 2.912-2.913 in the Fraud Examiner’s Manual

Alternative dispute resolution in fraud cases usually involves one of two types of methods: mediation or arbitration. Mediation is the process whereby an impartial third person (i.e., a mediator) assists the parties in reaching a resolution to the dispute. The mediator does not decide who should win but instead works with the parties to reach a mutually agreeable settlement. Any mediation agreement will be enforced as a binding contract.

Arbitration is the process whereby a dispute is submitted to an impartial third person (known as an arbitrator) who then decides the outcome of the case (i.e., which party should win). The arbitrator acts as a judge or jury by deciding the case on its merits. Arbitration can be either binding or nonbinding. If the arbitration is binding, then the decision of the arbitrator is final, and the parties cannot later submit their dispute to a judge or jury for determination. Conversely, if the arbitration is nonbinding, the arbitrator’s determination is not binding upon the parties.

Question 45

Some common law countries allow parties to conduct a(n) _____________, which is sworn testimony given by a party or witness upon questioning by counsel for one of the parties before trial and outside of court, usually in a lawyer’s office.

A. Interrogatory
B. Request for admission
C. Indictment
D. Oral examination

Answer 45

D. Oral examination

See pages 2.904-2.905 in the Fraud Examiner’s Manual

In common law jurisdictions, a party may be examined or questioned by the other party either orally or through written questions. A pretrial oral examination, or deposition, is sworn testimony given by a party or witness upon questioning by counsel for one of the parties before trial and outside of court, usually in a lawyer’s office. Opposing counsel and a stenographer, who administers the oath and transcribes the testimony, are also present. An oral examination may be used to obtain evidence about the party’s own case or the opponent’s, or it may be used to preserve testimony for trial. Some common law jurisdictions do not allow pretrial oral examinations, but pretrial written examinations are still available.

Question 46

Which of the following statements BEST describes when a custodial arrest occurs?

A. A custodial arrest occurs when the suspect is questioned by a law enforcement officer.
B. A custodial arrest occurs when a law enforcement officer informs the suspect of their rights as a criminal defendant.
C. A custodial arrest occurs when a law enforcement officer communicates their intent to arrest the suspect.
D. A custodial arrest occurs when a law enforcement officer indicates that the suspect is no longer free to leave.

Answer 46

D. A custodial arrest occurs when a law enforcement officer indicates that the suspect is no longer free to leave.

See pages 2.801 in the Fraud Examiner’s Manual

A custodial arrest occurs whenever a government officer has a person in custody, meaning an officer has indicated that the person is not free to leave. It is important to determine when an arrest occurs to establish what rights the subject of the arrest had at a given time.

Question 47

Which of the following outcomes to criminal allegations of fraud against an organization occurs when prosecutors agree not to prosecute claims if the organization reforms its practices and reduces the risk of illegal activities?

A. Judgment notwithstanding the verdict
B. Plea bargaining agreement
C. Sentencing agreement
D. Deferred prosecution agreement

Answer 47

D. Deferred prosecution agreement

See pages 2.805, 2.821 in the Fraud Examiner’s Manual

Some jurisdictions that allow for corporate criminal liability also use deferred prosecution agreements. Generally, deferred prosecution agreements occur when prosecutors file criminal charges against a company, but then they agree not to prosecute the claims if the company successfully complies with the deferral agreement’s terms. These requirements typically focus on getting the business to reform its policies and reduce the risk of illegal practices. Essentially, deferred prosecution agreements help companies avoid indictment, trial, and conviction while providing a jurisdiction’s justice system with another channel for resolving a corporate case that punishes misconduct and effectuates changes in a company’s culture.

Similar to plea bargaining, deferred prosecution agreements are controversial, and many countries do not provide for such resolutions of criminal cases. However, the complexity and public cost of trying massive fraud cases have caused more jurisdictions to adopt such strategies.

In a plea bargaining agreement, the defendant pleads guilty to a violation in exchange for some sort of leniency; deferred prosecution agreements can result in no conviction if the agreement is fulfilled.

In sentencing agreements, the defendant submits a confession or pleads guilty in exchange for a reduced sentence or other lenient treatment.

Question 48

An individual is a defendant in a civil fraud lawsuit filed by their employer. In the same proceeding, the jurisdiction allows the defendant to file a claim stating the employer owes them back pay. The defendant’s claim in this case is called a counterclaim.

A. True
B. False

Answer 48

A. True

See pages 2.902 in the Fraud Examiner’s Manual

In addition to allowing defenses against the plaintiff’s claims, many jurisdictions allow the defendant to raise a counterclaim (also known as a countersuit) in which the defendant levels a claim against the plaintiff. The specifics of the counterclaim might be filed as part of the defendant’s answer or as a separate document. If a defendant files a counterclaim, then the counterclaim and the original complaint will be tried concurrently, and a final judgment will be issued regarding each side’s claim.

Question 49

Which of the following BEST describes the civil trial process in a civil law jurisdiction?

A. It is a continual series of meetings and written correspondences, rather than a single event.
B. It is generally divided into the pretrial stage and the trial stage.
C. The judge generally rules on the admissibility of the evidence at the beginning of the trial.
D. The judge is responsible for the trial record, which is a word-for-word transcript of the proceedings.

Answer 49

A. It is a continual series of meetings and written correspondences, rather than a single event.

See pages 2.908-2.909 in the Fraud Examiner’s Manual

Civil cases in civil law jurisdictions vary considerably from common law civil cases. The most obvious difference is that civil law trials are a continual series of meetings and written correspondences, rather than a single event, as in common law systems. Throughout the process, evidence is introduced and evaluated by the court, and motions are submitted and decided on by the judge. The division between pretrial and trial stages found in common law civil trials, therefore, does not apply in the typical civil law setting.

Throughout the trial, the judge evaluates evidence and records it in the trial record. The record is generally a summary of the evidence, rather than a word-for-word transcript of the proceedings. At the final proceeding, the judge rules on the admissibility and relevance of the evidence in the record and presents it. This final proceeding usually resembles the trial stage in common law jurisdictions. After presenting the evidence in court, the judge, jury, or judge panel (depending on the jurisdiction and type of case) rules on the issues in the case.

Question 50

Integrative bargaining is the process whereby an impartial third person assists the parties in a dispute with reaching a resolution.

A. True
B. False

Answer 50

B. False

See pages 2.912 in the Fraud Examiner’s Manual

Mediation is the process whereby an impartial third person (i.e., a mediator) assists the parties in reaching a resolution to the dispute. The mediator does not decide who should win but instead works with the parties to reach a mutually agreeable settlement.

Question 51

In most jurisdictions, the plaintiff’s initial pleading requires various kinds of information. Which of the following is NOT one of them?

A. Grounds for legal relief
B. A summary of the evidence
C. Specific facts on which the party’s claim relies
D. All documents that might be introduced as evidence during the proceedings

Answer 51

D. All documents that might be introduced as evidence during the proceedings

See pages 2.901-2.902 in the Fraud Examiner’s Manual

A civil action begins when the plaintiff files a pleading with the appropriate court, usually in the jurisdiction in which the defendant resides or where the claim originated. The pleading sets out the complaint against the defendant and the remedy that the plaintiff is seeking. The required contents of the plaintiff’s pleadings will vary somewhat between jurisdictions, but most jurisdictions require fact pleadings, meaning the plaintiff must identify:

• The grounds for legal relief
• A summary of the evidence
• The specific facts on which the party’s claim relies
• Key items of expected evidence

Some jurisdictions have elevated pleading requirements and also require witness lists and the production of specific documents. A minority of jurisdictions require simpler notice pleadings in which the facts in the pleading must merely put the defendant on notice of the alleged claims; notice pleadings do not need to include the specific facts underlying the case.

Question 52

Which of the following statements concerning appellate procedure in criminal cases is MOST ACCURATE?

A. Appellate courts in civil law jurisdictions are generally permitted to make their own factual determinations and legal conclusions when reviewing a case.
B. Appellate courts in civil law jurisdictions are generally permitted to make their own factual determinations but not their own legal conclusions when reviewing a case.
C. Appellate courts in common law jurisdictions are generally permitted to make their own factual determinations but not their own legal conclusions when reviewing a case.
D. Appellate courts in common law jurisdictions are generally permitted to make their own factual determinations and legal conclusions when reviewing a case.

Answer 52

A. Appellate courts in civil law jurisdictions are generally permitted to make their own factual determinations and legal conclusions when reviewing a case.

See pages 2.819 in the Fraud Examiner’s Manual

Common law and civil law systems approach appeals in different ways. In most common law countries, appellate courts consider potential errors of law de novo (meaning they evaluate them independently of the trial court’s determinations), but they generally adopt the factual findings of the trial court. No jury is present, and there is typically no new evidence entered into the record. Therefore, appeals in common law systems are typically limited to issues of law. Very rarely will an appellate court reverse a factual finding of the trial court in a common law jurisdiction, such as when there is an egregious and obvious mistake.

In most civil law systems, courts can review cases for both issues of fact and law. The appellate court can usually perform de novo reviews of both the factual and legal determinations by evaluating the compiled evidentiary record.

Question 53

Which of the following is NOT one of the three stages of a criminal proceeding in an inquisitorial jurisdiction?

A. The investigative phase
B. The pretrial phase
C. The trial phase
D. The examining phase

Answer 53

B. The pretrial phase

See pages 2.812-2.813 in the Fraud Examiner’s Manual

Criminal proceedings in inquisitorial jurisdictions are typically divided into three phases: the investigative phase, the examining phase, and the trial. The discovery process occurs primarily in the first two of these three phases.

• In the investigative stage, the public prosecutor, judge, or both (depending on the jurisdiction’s process) collect documentary and tangible evidence regarding the case. The investigating party then decides whether there is sufficient evidence to submit the case for prosecution.
• If there is sufficient evidence, the case moves to the examining phase, which is mostly conducted in writing. The judge completes a written record of the evidence and may also collect testimony and additional evidence. If the judge certifies that there is a valid case against the accused, the matter moves to trial.
• The trial commences with the exhibition of the examining record before the parties and the trial judge, jury, or panel. The parties argue their case before the trial judge (or jury, if applicable).

The pretrial phase is one of the two stages that take place in adversarial jurisdictions. Adversarial jurisdictions also have a trial phase.

Question 54

Which of the following statements about the appeals process in criminal cases is INCORRECT?

A. In most jurisdictions, a convicted defendant has the right to appeal their conviction and sentence.
B. In many jurisdictions, an appellate court will reverse a conviction only if it finds an error that likely affected the trial’s outcome and denied the defendant a fair trial.
C. Appellate courts will generally only accept an appeal if the petition has been filed in a timely manner following the prior court’s judgment.
D. In a criminal appeal, the appealing party can petition a trial court to overturn or modify the appellate court’s decision.

Answer 54

D. In a criminal appeal, the appealing party can petition a trial court to overturn or modify the appellate court’s decision.

See pages 2.818-2.819 in the Fraud Examiner’s Manual

In most jurisdictions, a convicted defendant has the right to appeal their conviction and sentence. An appeal is the procedure for obtaining review by a higher court to ensure that the trial was conducted in a lawful manner and that the judgments comply with the law. In an appeal, the appealing party petitions an appellate court to overturn or modify the lower court’s decision.

Generally, appellate courts will not accept an appeal unless the petition is filed in a timely manner. Most jurisdictions have time limits within which appeals must be filed (e.g., no later than thirty days after the trial court’s judgment).

In many jurisdictions, an appellate court will reverse a conviction only if it finds an error that likely affected the trial’s outcome and denied the defendant a fair trial. Thus, errors that likely had no impact on the trial’s outcome, or harmless errors, are not sufficient to justify a successful appeal.

Question 55

In civil law systems, the standard of proof in civil trials and criminal trials is generally the same.

A. True
B. False

Answer 55

A. True

See pages 2.909 in the Fraud Examiner’s Manual

The standard of proof in civil law jurisdictions typically does not change in criminal and civil trials; it is often described as the inner conviction of the judge, sometimes called the conviction intime standard. This standard requires stronger evidence than the common law preponderance of the evidence standard used in civil trials but not as much as the common law beyond a reasonable doubt standard used in criminal trials.

Question 56

The main distinction between mediation and arbitration is that with arbitration, the arbitrator decides who wins the case. In contrast, in mediation, the mediator tries to help the parties reach a settlement.

A. True
B. False

Answer 56

A. True

See pages 2.912 in the Fraud Examiner’s Manual

Alternative dispute resolution in fraud cases usually involves one of two types of methods: mediation or arbitration. Mediation is the process whereby an impartial third person (i.e., a mediator) assists the parties in reaching a resolution to the dispute. The mediator does not decide who should win but instead works with the parties to reach a mutually agreeable settlement. Arbitration is the process whereby a dispute is submitted to an impartial third person (known as an arbitrator) who then decides the outcome of the case (i.e., which party should win). The arbitrator acts as a judge or jury by deciding the case on its merits.

Question 57

In most common law jurisdictions, plaintiffs in a civil trial must prove their case beyond a reasonable doubt.

A. True
B. False

Answer 57

B. False

See pages 2.907 in the Fraud Examiner’s Manual

Generally, in a civil suit in a common law jurisdiction, the plaintiff must prove that it is more probable than not that the defendant is liable. This standard is sometimes referred to as the preponderance of the evidence in common law jurisdictions. Unlike in a criminal case, the plaintiff does not have to prove liability beyond a reasonable doubt.

Question 58

If an employee commits internal fraud, then the only feasible way the employer can recover the losses is to get them from the employee through agreement or litigation.

A. True
B. False

Answer 58

B. False

See pages 2.911 in the Fraud Examiner’s Manual

Given the prevalence of fraud and that it is difficult to recover all losses from fraud, many businesses have fidelity insurance that covers fraud losses. Fidelity insurance (also known as crime insurance and employee dishonesty insurance) is often overlooked as a method of recovery for losses due to internal fraud. Fidelity insurance is a type of insurance under which the insured entity is covered against losses caused by the dishonest or fraudulent acts of its employees.