Deck 12: White-Collar Crimes

Question 1

To prove substantive securities fraud,the government must prove the __________ in the case of an omission.

A)defendant's conduct was made with knowledge.
B)defendant's conduct was material.
C)defendant made a false statement or omission.
D)defendant had a duty to disclose the information.

Answer 1

D

Question 2

Generally,__________ is NOT one of the three elements of tax evasion.

A)the existence of a tax deficiency
B)the existence of unreported nontaxable income
C)willfulness
D)an affirmative act constituting an evasion or attempted evasion of a tax payment

Answer 2

B

Question 3

A plaintiff must show the __________ to succeed in a suit based on the Trademark Law Revision Act of 1988.

A)advertiser made a questionable statement
B)deception is manipulative
C)deception is implied and can negatively affect consumers' self-perceptions
D)advertising is made about services offered in one state

Answer 3

B

Question 4

For a churning conviction,the government (or investor)must establish that the

A)broker wished to manipulate the supply and demand of the stock.
B)broker was reckless.
C)trading was typical for that type of account.
D)The broker exercised control over the trading in the account.

Question 5

The FDCA definition of a drug includes articles intended for use

A)in the cure of disease.
B)intended for use as food for man or other animals.
C)in adding vitamins to a daily diet.
D)intended for use as food for man or other animals

Question 6

Under modern mail fraud,if the defendant is using the U.S.Post Office,it

A)can be any kind of delivery.
B)must be intrastate delivery.
C)must be interstate delivery.
D)None of the above is correct.

Question 7

The FDCA definition of food includes

A)articles used for food or drink for man or other animals.
B)chewing gum.
C)articles used for components of food or drink.
D)All the above are correct.

Question 8

__________ defense is a defense that a taxpayer can offer to negate charges of tax deficiency?

A)second party
B)ex post facto
C)"cash board"
D)missing willfulness

Question 9

The Federal Trade Commission Act provides that it is illegal for any person or business to create or cause to be created any false advertisement that the

A)changes a consumer's behavior.
B)the creator did not know was false.
C)The deception is used to induce television viewers only.
D)None of the above is correct.

Question 10

Mail fraud is often charged together with

A)securities fraud.
B)substantive fraud.
C)impure food and drug charges.
D)antitrust violations.

Question 11

_________ is NOT a common defense to securities fraud charges.

A)Reliance on counsel
B)No knowledge
C)Use of private courier
D)Good faith

Question 12

For a misdemeanor FDCA conviction,it must be shown that when the defendant is a corporate officer.

A)there is a "food," drug," "cosmetic," or "device"
B)the defendant as a "responsible relation" to the violation
C)the object was "adulterated" or "misbranded"
D)the object was introduced into interstate commerce.

Question 13

One defense a defendant has to a mail fraud charge is

A)A "cash hoard" defense,which states that the defendant's possession of unexplained cash is from savings.
B)A provocation defense,in which the defendant must resort to fraud in order to receive legally due payment for goods or services.
C)A good faith defense,which is merely an assertion that there was no fraud intended.
D)A time immateriality defense,which states that the defendant did not know when the relevant mail fraud law took effect.

Question 14

"To __________ is NOT one of the purposes of parking.

A)avoid reporting requirements"
B)manipulate the supply and demand of stock,which will affect its price"
C)circumvent margin rules and minimum net capital requirements"
D)recognize higher commissions"

Question 15

__________ is NOT an element in obtaining a conviction for mail fraud.

A)The intent to defraud
B)The use of personal courier services,such as by co-felons
C)A scheme to defraud
D)The use of the United States Postal Service,or any private interstate commercial carrier

Question 16

A situation where the ___________ is NOT one of the three elements that must be considered in establishing mens rea for willfulness in a tax deficiency.

A)defendant willfully committed the act before it was made criminal
B)defendant voluntarily and intentionally violated his or her duty
C)law imposed a duty on the defendant
D)defendant knew of his or her duty

Question 17

The Trademark Law Revision Act of 1988 imposes liability on

A)any advertisements regarding someone else's goods,services,or commercial activities
B)anyone who makes a false or misleading advertisement regarding her own goods,services,or commercial activities
C)civil violations of trademark laws
D)All the above are correct.

Question 18

To prove the existence of a tax deficiency,the government must show

A)The burden of proving that the unreported income was taxable does not fall on the prosecution if they can prove a deficiency with direct evidence.
B)The defendant received income in addition to what was reported.
C)The unreported income was taxable.
D)All the above are correct.

Question 19

___________ is an indirect method of proving a tax deficiency.

A)defendant's confession
B)cash expenditures
C)gross worth method
D)All the above are correct.

Question 20

One prosecution of mail fraud that is primarily used to protect citizens from dishonest public officials is taken under the

A)Food,Drug and Cosmetics Act (FDCA).
B)intangible rights theory.
C)Sherman Antitrust Act.
D)Clayton Antitrust Act.

Question 21

Although the Fourth Amendment protects people against unreasonable searches,administrative searches may be valid without a warrant when the

A)inspection is made by a higher level official,such as one that works for the federal government.
B)inspection is made pursuant to a regulatory scheme for which there is a substantial government interest.
C)owner is on the premises.
D)An employee reports wrong doing.

Question 22

Under Section 1 of the Sherman Act,the government must prove __________ to gain a criminal Judgment.

A)general intent
B)a combination or conspiracy that produces,or potentially produces,an unreasonable restraint of trade or commerce.
C)that restraint is on interstate trade or commerce.
D)that two or more entities formed a combination or conspiracy.

Question 23

Many times in criminal false advertisement cases,it is necessary for the prosecution to show that there has been an actual victim who made a purchase based on the deceptive advertisement.

Question 24

The _________ prohibits certain activities that harm competition,including exclusive dealing arrangements and mergers that damage competition.

A)Federal Trade Commission Act
B)Clayton Act
C)Sherman Act
D)Robinson-Patman Act

Question 25

Recently,legislatures have passed statutes that allow corporations to be penalized for white-collar criminality.

Question 26

Parking occurs when a stockbroker excessively purchases and sells securities for a client without regard or concern for the client's investment objectives,but rather to advance his own interests,usually that of generating commissions.

Question 27

Insider trading usually deals with cases in which an insider,quasi-insider,or misappropriator has inside information,then tips off another individual regarding certain material,nonpublic information.

Question 28

Unlike tax evasion,false advertisement can violate state and federal laws.Like tax evasion,it can lead to both criminal and civil liability.

Question 29

Antitrust laws protect trade and commerce from restraints,monopolies,price-fixing,and price discrimination.

Question 30

If mailing occurs after a fraud scheme is completed,the mailing element is usually still satisfied.

Question 31

Name three of the examples given in your textbook as examples of affirmative acts of tax evasion.

Question 32

To obtain a felony conviction for a FDCA violation,the misdemeanor elements must be shown as well as either intent or evidence of a prior FDCA violation.

Question 33

A monopolization conviction requires the prosecution to prove the

A)possession of a monopoly power,but not including the power to control or fix prices and unreasonably restrict or exclude competition in a relevant market.
B)willful acquisition or maintenance of such power through lawful means,such as from fair competitive practices such as high quality products,business acumen,or historical accident.
C)possession of a monopoly power,which includes the power to control or fix prices and unreasonably restrict or exclude competition in a relevant market.
D)willful acquisition or maintenance of such power through scattered unlawful means,but primarily from fair competitive practices such as high quality products,business acumen,or historical accident.

Question 34

The four main federal antitrust laws are the Sherman Act,Clayton Act,Robinson-Patman Act,and Federal Trade Commission Act.

Question 35

The U.S.Supreme Court established that ignorance of the law is a defense when it comes to tax evasion.

Question 36

What are the four primary elements of securities fraud?

Question 37

An item has been subject to discrimination when its ingredients are poisonous,filthy,putrid,otherwise unsanitary,or have been contaminated.

Question 38

As an anti-competitive measure,certain boycotts are considered illegal.

Question 39

Name four of the prohibited acts under the Federal Food,Drug,and Cosmetic Act (FDCA).

Question 40

__________ is NOT an element in an attempted monopoly conviction.

A)Specific intent to obtain a monopoly power in a given market
B)Use of unlawful means to increase market share
C)Dangerous probability that a monopoly will be obtained
D)Ongoing possession of a monopoly power

Question 41

Explain the differences between horizontal price-fixing and vertical price-fixing.