Deck 9: Conversion Investigation Methods

Question 1

Evidence gathered from searching through someone's trash:

A) Can help identify concealment attempts
B) Can help to determine how a perpetrator is spending stolen money
C) Can help understand how a perpetrator is stealing money
D) All of the above are true

Answer 1

D
A: Because b and c are also correct
B: Because a and c are also correct
C: Because a and b are also correct

Question 2

Which of the following is not a federal source of information?

A) Secretary of State
B) CIA
C) Bureau of Prisons
D) FBI

Answer 2

A
A: A is correct. This is a state agency, though it sounds like a federal one to me.
B: B is incorrect because it is a federal agency
C: C is incorrect because while it can be a state source of information, it is also exists on a federal level
D: D is incorrect because of the F. It is a federal agency

Question 3

Which of the following is not a type of information that can be obtained from the County Land Office and Tax Assessor's Office?

A) Real Estate that has been purchased
B) Automobile registration
C) Property's current assessed value
D) Liens removed

Answer 3

B
B: This would be available from the DMV

Question 4

Mandy calls a local newspaper and pretends to be a neighbor who is away for the winter. She obtains account history and orders newspaper service for six months. Has Mandy committed fraud?

A) No. The newspaper has not yet been delivered nor paid.
B) Yes. She is in violation of the Gramm-Leach Bliley Act of 1999.
C) No. Her neighbor can obtain all of the newspapers when they return next spring.
D) Yes. She has engaged in mail fraud, Title 18, U.S. Code Section 1344.

Question 5

During an interview with Heidi Royce, she confessed to accepting $64,500 in kickbacks from a key supplier over the last 6 months. Heidi's income for the year was $48,000 and her living expenses totaled $94,500 due mainly to medical costs of $40,000. She has a current net worth of $20,000. What was her (increase/decrease) in net worth?

A) $6,500
B) $2,000
C) $71,000
D) $9,500

Question 6

Which of the following is not one of the credit reporting agencies used to check identity theft?

A) Experian
B) Equifax
C) Transunion
D) Proquest

Question 7

Searching through someone's garbage is considered a legal activity when:

A) the trash is more than 14 days old
B) the trash is in the person's possession
C) the trash has left the person's home or sidewalk
D) Stealing a person's trash is never considered a legal activity.

Question 8

All of the following federal agencies maintain information that can help fraud investigations except which?

A) ATF
B) Social Security Administration
C) Department of Justice
D) Postal Service

Question 9

What is the purpose of the net worth calculation in fraud?

A) It is used to determine the extent of stolen funds
B) It is used to determine how much money can be stolen without causing a company to go bankrupt.
C) It is used to help locate fraudulent asset accounts
D) All of the above

Question 10

Social Security contains information about an individual. Which item below is not included in an individual's social security number?

A) Area the person was living when the number was issued
B) A unique serial number for a person
C) Race
D) Group number

Question 11

Income from known sources subtracted from total income gives a reasonable estimate of:

A) Unknown funds
B) Liabilities
C) Living Expenses
D) Net Worth

Question 12

Which of the following agencies is generally the least productive in a records search?

A) Searching Local agencies
B) Searching County agencies
C) Searching State agencies
D) Searching Federal agencies

Question 13

Which of the following is not a needed component for computing a person's Net Worth?

A) Parent's financial status
B) Prior year's net worth
C) Funds from known sources
D) Net worth increase

Question 14

Using the data below the income from unknown sources for year 2 and 3 respectively are:

A) -27,800; -41,800
B) 275,800; 267,800
C) 81,800; 311,800
D) 65,800; 47,800

Question 15

________ is both a federal and state source of information.

A) Secretary of state
B) Bureau of prisons
C) Department of defense
D) Permit departments

Question 16

Which of the following statements is false regarding the net worth method?

A) The net worth method generally understates amounts stolen.
B) Much of the information necessary for determining an individual's assets, liabilities, living expenses, and income is available through public records.
C) Courts are generally suspicious of dollar amounts determined by the net worth method because courts realize that the net worth method can only provide approximations of the amount stolen.
D) The net worth method is useful for obtaining confessions from suspects during interviews or interrogations.

Question 17

Net worth calculations do all of the following except:

A) Determine Net worth
B) Determine funds from unknown sources
C) Determine where fraudulent monies are hidden
D) Determine a person's Net Worth Increase

Question 18

You are investigating a fraud in which you suspect that one of your suppliers from another state has been giving bribes and kickbacks to your purchasing agent in exchange for a lucrative, exclusive contract. Which of the following agencies/individuals would be the most helpful in investigating this fraud?

A) The FBI because they have national jurisdiction and can investigate and prosecute violators from a different state.
B) The state attorney general for the supplier's state because they are responsible for enforcing all state civil and criminal laws.
C) Postal inspectors because the bribes and kickbacks were most likely made through the mail system; therefore, federal mail statutes apply.
D) The IRS because your purchasing agent is not too bright and probably reported the bribes and kickbacks as income on his tax returns.

Question 19

Which of the following is not a good reason for involving postal inspectors in a fraud investigation?

A) Postal inspectors share jurisdiction with other federal, state, and local agencies.
B) Postal inspectors work for the prosecution of offenders who violate postal laws.
C) Postal inspectors have access to an individual's past and current addresses.
D) Postal inspectors work to protect citizens from loss through theft that uses the mail system.

Question 20

Which of the following types of information do credit reporting agencies not maintain?

A) Information of current and former employers
B) Account information such as payment schedules, items purchased, and buying habits.
C) Marketing information such as customer breakdowns by age, sex, and income levels
D) Consumer information such as addresses and family members
E) Credit reporting agencies maintain all of the above information

Question 21

All of the following information can be obtained from an Internet search, except:

A) Criminal records
B) How many traffic tickets a person has
C) Birth records
D) A perpetrator's purchase of expensive jewelry

Question 22

Which government agency would provide information that is most useful detecting "dummy doctors"?

A) Department of business regulation
B) Secretary of state
C) Postal service
D) County clerk

Question 23

In calculating the net worth method, you should do the following:

A) find net worth, find the net worth increase, find Income, find the funds from unknown sources
B) find net worth, find the net worth decrease, find income, find the funds from known sources
C) find net worth, find the net worth decrease, find Income, find the funds from unknown sources
D) find net worth, find the net worth increase, find Income, find the funds from known sources

Question 24

The ____________ contains information on individuals who may be a threat to national security.

A) Department of justice
B) Bureau of prisons
C) Department of defense
D) Secret service

Question 25

The CIA is responsible to investigate matters:

A) Inside the United States
B) Outside the United States
C) Dealing with the President of the United States
D) All of the above

Question 26

After 1999, how could you obtain information from a financial institution?

A) Court Subpoena
B) Search warrants
C) False pretenses
D) Both a and b

Question 27

True or false: Federal records are usually more useful than state and local records when investigating fraud.

Question 28

What will perpetrators of fraud almost universally do with their stolen funds?

A) Invest the stolen funds
B) Save the funds for emergency retirement, etc.
C) Spend them
D) Return them

Question 29

Where can a fraud investigator search for public information without a search warrant?

A) County and local records
B) Federal and State records
C) Financial institution records
D) Internal Revenue Service records

Question 30

Which of the following is/are not federal sources of information?

A) Central Intelligence Agency
B) Social Security Administration
C) Postal Service
D) Department of Motor Vehicles
E) All of the above are federal sources of information

Question 31

To find marital and voting records, one would need to look at:

A) The state attorney general's office
B) The social security administration office
C) The county clerk's office
D) The local courts office

Question 32

Lexis-Nexis and Dun & Bradstreet are examples of:

A) Law firms that specialize in fraud prosecution
B) Publicly available databases
C) Companies that have committed fraud in the past
D) Names of legislative bills regarding fraud

Question 33

The Gramm-Leach Bliley Act prohibits

A) Telemarketers selling information to corporations
B) The use of false pretenses to access the personal information of others
C) Public access to FBI criminal database
D) None of the Above

Question 34

One of the agencies included in the Department of Justice is the:

A) FBI
B) Secret Service
C) CIA
D) Bureau of Prisons

Question 35

Funds from unknown sources equals:

A) Assets - Liabilities.
B) Net Worth Increase + Living Expenses.
C) Income - Funds from Known Sources.
D) Net Worth - Prior Year's Net Worth.

Question 36

To effectively conduct conversion investigations, a fraud examiner must thoroughly understand all of the following except:

A) How to search federal, state, local and other records for information.
B) The types of information available from federal, state, and local searches.
C) The net worth method of spending and analyzing spending information.
D) The different types of audits that can be conducted

Question 37

Which of the following is false?

A) Rarely do perpetrators save what they steal.
B) Conversion searches are performed to find out more about a suspect's life
C) Conversion searches are performed to gather evidence to be used in interrogations.
D) Public records searches are preferred to uncover concealment attempts.

Question 38

What are the three major credit reporting agencies?

A) Experian, Equifax, and TransUnion
B) Providian, Equifax, and TransUnion
C) Providian, FairIsaac, and Experian
D) TransUnion, FairIsaac, and Providian

Question 39

The Gramm-Leach Bliley Act stipulates the following:

A) Trash that has not left the possession of a person may not be legally searched.
B) Credit information about an individual that is furnished to a third party must also be made available to that individual.
C) Banks may share customers' financial information with others.
D) None of the above.

Question 40

Public information can be gathered from which of the following sources?

A) State government
B) County and local government
C) Federal government
D) All of the above

Question 41

The Net-Worth Method:

A) Is a conservative method and is, therefore, typically accepted as evidence in court
B) Is used in every fraud case
C) Is useful evidence for court but does not help in the interrogation process.
D) Both a and b
E) Both a and c

Question 42

The Bureau of Prisons records are available under

A) Federal sources of information
B) State sources of information
C) Both of the above
D) None of the above

Question 43

Which of the following is a true disadvantage of using the net worth method?

A) the amounts are not readily accepted as evidence by courts
B) it rarely facilitates the obtaining of a confession
C) it is widely used by the DEA, FBI, and IRS
D) embezzlers typically spend their money on luxuries that are difficult to track

Question 44

Why is the net worth method advantageous?

A) It is conservative
B) It can be used in court
C) It can help calculate all amounts embezzled
D) Both A and B

Question 45

True or false: A net worth calculation usually yields a conservative estimate of stolen funds that is readily accepted as evidence in court.

Question 46

The Gramm-Leach Bliley Act allows all of the following except:

A) Banks to sell customer information
B) Individuals to gather information under false pretenses.
C) Companies to share customer information even if the customer has "opted out".
D) Financial Institutions to share personal information with law enforcement agencies

Question 47

Which of the following statements are true:
I) The amounts determined to be stolen using the net worth method ar usually readily accepted as evidence by courts.
II)Net worth calculations tend to give a conservative estimate of stolen funds.

A) I only
B) II only
C) Both I and II
D) Neither I or II

Question 48

Because the use of ________ is so common in frauds, the_________ can be a fraud investigators most important ally. A) mail, Postal Service B) tax returns, Internal Revenue Service C) narcotics, Drug Enforcement Administration D) fake social security numbers, Social Security Administration

Question 49

Under the "Net Worth Method", a person who has an increase in net worth of $100,000, known income of $80,000, and a salary of $60,000, would have unknown income of

A) $0
B) $10,000
C) $20,000
D) $40,000

Question 50

Which of the following would provide the best information regarding the FBI?

A) The Bureau of Prisons
B) The Department of Justice
C) The Department of Vital Statistics
D) The Attorney General

Question 51

The_________ is a database that contains arrest and criminal records on a nationwide basis.

A) National Crime Information Center
B) Interstate Identification Index
C) National Prison Bureau Database
D) None of the above

Question 52

Which of the following government agencies does not typically use the net worth method to detect fraud?

A) Internal Revenue Service
B) Federal Bureau of Investigation
C) Social Security Administration
D) Drug Enforcement Agency

Question 53

UCC records can identify all of the following except:

A) Collateral on purchased assets
B) The nature of the lending company
C) Where a person banks
D) Whether a person has a need for money
E) UCC records cann identify all of the above

Question 54

Which of the following frauds would conversion investigation methods be most effective in uncovering?

A) Kickback schemes
B) Revenue fraud schemes
C) Underrecording of accounts payable
D) Payroll schemes

Question 55

Why do most fraud perpetrators initiate fraudulent activity?

A) To increase their savings account
B) To meet a perceived critical need
C) To improve their lifestyle
D) All of the above

Question 56

Which of the following is an example of a state source of information?

A) Social Security Administration.
B) Utility records.
C) Department of Motor Vehicles.
D) Permit departments.

Question 57

When investigating conversion the 'financial footprints' that fraud investigators are looking for are?

A) Purchase of assets
B) Changes in lifestyles
C) Changes in net worth
D) All of the above

Question 58

The Secret Service performs all of the following functions except:

A) Protects the president of the United States
B) Investigates counterfeiting
C) Investigates theft of government checks
D) Investigates charges of treason
E) The Secret Service performs all of the above functions

Question 59

The net worth method for determining amounts embezzled is not regularly used by:

A) The Federal Executive Board
B) The Drug Enforcement Administration
C) The Federal Bureau of Investigation
D) The Internal Revenue Service

Question 60

Which of the following is the correct method of applying the net worth method

A) Assets - liabilities - prior year's net worth - living expenses + funds from known sources = Funds from Unknown sources
B) Assets - Liabilities + prior year's net worth + living expenses - funds from known sources = Funds from Unknown sources
C) Assets - liabilities - prior year's net worth + living expenses - funds from known sources = Funds from Unknown sources
D) Net Worth - prior year's net worth + Assets + living expenses - funds from known sources = Funds from Unknown sources

Question 61

A fraud investigator would have the least amount of difficulty obtaining the _________ of a suspect.

A) Tax returns
B) Military records
C) Birth records
D) Social security number