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Investigation > Traving Illicit Transactions > Flashcards

Traving Illicit Transactions Flashcards

1
Q

A relationship between foreign and domestic financial institutions in which one institution has the authority to provide certain financial services on another institution’s behalf can BEST be described as a(n):

A. Foreign correspondent relationship
B. Information exchange agreement
C. SWIFT partnership
D. Joint services relationship

A

A. Foreign correspondent relationship

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2
Q

Suppose that a fraud examiner needs to prove a suspect’s illicit income circumstantially. Which of the following methods of tracing assets would yield the BEST result when the suspect is using their illicit funds to accumulate wealth and acquire assets or pay down debts, thus causing their net worth to increase?

A. The income correlation method
B. The expenditures method
C. The bank deposit analysis method
D. The asset method

A

D. The asset method

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3
Q

Which of the following is a reason why a subject’s credit card records and statements can be useful in asset tracing investigations?

A. Credit card statements provide information about the division of the subject’s assets.
B. Credit card statements show the source of the funds used to pay a credit card bill.
C. Credit card records are available online for public inspection.
D. Credit card records can reveal assets that a subject has acquired.

A

D. Credit card records can reveal assets that a subject has acquired.

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4
Q

Most jurisdictions do not require cryptocurrency exchanges, digital wallet providers, or cryptocurrency automated teller machine (ATM) operators to record personal identifying information about their clients.

A. True
B. False

A

False

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5
Q

The expenditures method (also known as the sources and application of funds method) for proving illicit income involves identifying all assets held by the subject that were acquired earlier, identifying the amount of the subject’s current liabilities, and taking the difference between the two values.

A. True
B. False

A

False

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6
Q

The records of a wire transfer identify the amount of the wire, where it was sent, and the date it was sent, but they do NOT identify who sent the wire.

A. True
B. False

A

False

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7
Q

Which of the following types of records for a personal bank account would MOST LIKELY contain the account holder’s name, address, telephone number, and government identification number?

A. ATM withdrawal slip
B. Deposit slip
C. Canceled check
D. Signature card

A

D. Signature card

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8
Q

Which of the following is considered a red flag indicating that a subject is seeking to conceal ill-gotten assets through a loan repayment?

A. Payments in odd amounts
B. Accelerated payments
C. Large paydowns
D. All of the above

A

D. All of the above

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9
Q

Blockchain entries contain cryptocurrency senders’ and recipients’ _______, which can help fraud examiners identify patterns that link certain users to criminal activity.

A. Bank account information
B. Cryptographic addresses
C. Full legal names
D. Dates of birth

A

B. Cryptographic addresses

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10
Q

A bank credit department generally maintains which of the following types of basic loan records?

A. The cash record
B. The accounting journal
C. The master appropriation file
D. The credit or loan file

A

D. The credit or loan file

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11
Q

Which of the following is the BEST definition of the indirect method of tracing financial transactions?

A. Using the subject’s books and records to analyze the relationship between the subject’s receipt and subsequent disposition of funds or assets
B. Using circumstantial evidence to analyze the relationship between a suspect’s receipt and subsequent disposition of funds or assets
C. Using financial analysis to discover all significant expenses the target incurred during the relevant period to develop the financial profile
D. Using bank records and financial statements to identify and analyze information about the target’s personal characteristics to identify sources of hidden wealth or assets

A

B. Using circumstantial evidence to analyze the relationship between a suspect’s receipt and subsequent disposition of funds or assets

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12
Q

Which of the following is something that might be revealed by analyzing a subject’s electronic payment records?

A. Assets the subject has purchased
B. Assets effectively held by the subject
C. Direct deposit payments made to nonexistent employees
D. All of the above

A

D. All of the above

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13
Q

Which of the following is a means through which a fraud examiner can potentially determine that a subject owns cryptocurrency assets?

A. The subject’s digital wallet provider via a court order
B. An interview with one of the subject’s close friends
C. An analysis of the subject’s bank statements
D. All of the above

A

D. All of the above

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14
Q

Which of the following is a reason why a fraud examiner might be tasked with tracing illicit transactions?

A. To identify a judgment debtor’s assets
B. To determine if a potential defendant can pay if a judgment is ordered
C. To facilitate the recovery of criminal proceeds
D. All of the above

A

D. All of the above

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15
Q

Credit card records and statements pertaining to a subject can provide insight into the subject’s movements and habits, including restaurants they frequent and locations where they have traveled.

A. True
B. False

A

True

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16
Q

Suppose that a fraud examiner needs to prove a suspect’s illicit income circumstantially. Which of the following methods of tracing assets would yield the BEST result when the suspect is spending their illicit funds on items that would not cause an increase in net worth, such as travel and entertainment?

A. The income correlation method
B. The bank deposit analysis method
C. The asset method
D. The expenditures method

A

D. The expenditures method

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17
Q

Which of the following is LEAST LIKELY to be revealed by analyzing a subject’s electronic payment records?

A. The true owner of a property
B. The locations of the subject’s assets
C. If the subject is skimming employer funds
D. The cities and countries in which the subject conducts business

A

C. If the subject is skimming employer funds

18
Q

Which of the following pieces of information is usually contained on the signature card of a personal bank account?

A. The identification number of the person opening the account
B. The address of the person opening the account
C. The name of the person opening the account
D. All of the above

A

D. All of the above

19
Q

Which of the following is NOT one of the most important questions for a fraud examiner to consider before commencing a legal action to recover assets?

A. “Are there nonlegal recovery methods or remedies available?”
B. “Does the defendant have sufficient property or money to satisfy a money judgment?”
C. “Is the suspect guilty of the fraudulent act that they are being charged for?”
D. “Will the case be referred for criminal prosecution?”

A

C. “Is the suspect guilty of the fraudulent act that they are being charged for?”

20
Q

Which of the following is LEAST LIKELY to be revealed by analyzing a subject’s electronic payment records?

A. The locations of the subject’s residences and businesses
B. Fund transfers between individuals who do not have a business relationship
C. The market value of any real property owned
D. Loans the subject has obtained

A

C. The market value of any real property owned

21
Q

Net worth can be defined as the difference between assets and liabilities at a particular point in time.

A. True
B. False

A

True

22
Q

Which of the following is NOT a characteristic that asset hiders generally look for in the financial products they use to conceal assets?

A. Accessibility
B. Security
C. Liquidity
D. Transparency

A

D. Transparency

23
Q

Which of the following is NOT a piece of information contained on most wire transfers?

A. The date of the transfer
B. The name of the sender or originator
C. The routing number of the recipient bank
D. The recipient’s government identification number

A

D. The recipient’s government identification number

24
Q

What is mutual legal assistance (MLA)?

A. A formal request by the government of a country seeking information from a defendant residing in another country
B. A formal request by the courts of one country seeking judicial assistance from the courts of another country
C. A letter whereby a criminal defendant requests that the government release exculpatory information
D. A process by which countries request and provide assistance in law enforcement matters

A

D. A process by which countries request and provide assistance in law enforcement matters

25
Q

Fraudsters might take advantage of foreign correspondent relationships to move illicit funds abroad using which of the following types of transactions or financial products?

A. Foreign exchange services
B. Letters of credit and loans
C. International fund transfers
D. All of the above

A

D. All of the above

26
Q

Which of the following documents is typically included with the account-opening documents for a corporation’s business account?

A. A signature card
B. Copies of corporate resolutions of the board of directors naming the person who may authorize payments on the account
C. Copies of corporate resolutions of the board of directors authorizing the opening of the account
D. All of the above

A

D. All of the above

27
Q

Which of the following is an accurate statement about tracing the disposition of loan proceeds?

A. Tracing loan proceeds can determine if hidden accounts were used for loan payments
B. Tracing loan proceeds can uncover hidden assets or unknown witnesses
C. Tracing loan proceeds can determine whether a subject has taken out a loan for someone else
D. All of the above

A

D. All of the above

28
Q

Most cryptocurrencies rely on public blockchains that provide visibility into every transaction that takes place.

A. True
B. False

A

True

29
Q

A fraud victim hires Kennedy, a Certified Fraud Examiner (CFE), to trace a fraudster’s assets to facilitate the recovery of the illicit proceeds obtained by the fraudster. Which of the following will typically be the MOST USEFUL source of information for Kennedy in his efforts to trace the fraudster’s assets?

A. Third-party witnesses
B. Surveillance footage
C. The fraudster’s paystubs
D. The fraudster’s bank records

A

D. The fraudster’s bank records

30
Q

To reduce risks of illicit transactions, most jurisdictions require financial institutions to obtain all the following information from an institution with which they have a foreign correspondent relationship EXCEPT:

A. The institution’s tax statements
B. The institution’s ownership details
C. The institution’s licenses or certifications
D. The institution’s anti-money laundering processes

A

A. The institution’s tax statements

31
Q

Which of the following documents is MOST LIKELY to be included with the account-opening documents for a corporation’s business account?

A. A list of all shareholders
B. A copy of all shareholders’ meeting minutes
C. A copy of the corporation’s board-authorized personnel policies
D. Copies of corporate resolutions of the board of directors authorizing the opening of the account

A

D. Copies of corporate resolutions of the board of directors authorizing the opening of the account

32
Q

Which of the following is a common method that fraudsters use to hide their ill-gotten gains?

A. Prepaying a home mortgage
B. Purchasing a life insurance policy
C. Transferring assets into foreign trusts
D. All of the above

A

D. All of the above

33
Q

Which of the following information CANNOT be obtained from a subject’s safe deposit box record(s)?

A. The time and date of people entering the safe deposit box
B. The record of contents contained in the safe deposit box
C. The signatures of people entering the safe deposit box
D. The identity of people who have access to the safe deposit box

A

B. The record of contents contained in the safe deposit box

34
Q

Which of the following pieces of information is NOT usually contained on the signature card of a personal bank account?

A. The telephone number of the person opening the account
B. The address of the person opening the account
C. The identification number of the person opening the account
D. The thumbprint of the person opening the account

A

D. The thumbprint of the person opening the account

35
Q

Which of the following is a step in the general process for tracing illicit transactions?

A. Implementing litigation hold procedures
B. Establishing reporting protocols
C. Building a financial profile
D. Selecting a response team

A

C. Building a financial profile

36
Q

Records obtained from financial institutions are perhaps the single MOST IMPORTANT financial source available to fraud examiners for purposes of tracing assets.

A. True
B. False

A

True

37
Q

Asset hiders look for financial products that offer clear links between the initial receipt of an asset and its final disposition to ensure the traceability of the asset.

A. True
B. False

A

False

38
Q

Analyzing a subject’s bank statements for transactions involving cryptocurrency exchanges can sometimes reveal information about cryptocurrency ownership.

A. True
B. False

A

True

39
Q

Which of the following is a common method that fraudsters use to conceal illegally acquired assets?

A. Transferring assets into another person’s name
B. Creating a will to allocate assets at death
C. Making tax-deductible donations
D. Purchasing a used vehicle

A

A. Transferring assets into another person’s name

40
Q

Asset hiders generally prefer the financial products they use to conceal assets to be traceable, inaccessible, illiquid, and exclusive.

A. True
B. False

A

False

41
Q

When determining a subject’s net worth for asset-tracing purposes, all assets should be valued at current market value to eliminate any question about estimates.

A. True
B. False

A

False

Investigation (10 decks)

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