ACFCS CFCS Exam : Financial Crime Specialist

InvestPlus was a securities trading firm that purportedly specialized in high-risk high-reward investment opportunities in developing countries. InvestPlus was losing money on many of its products and began to take funds from new clients to repay earlier investors. The scheme was eventually revealed and InvestPlus collapsed leaving behind numerous defrauded investors InvestPlus is now bankrupt.
A group of investors who lost money has hired your law firm to recover assets InvestPlus had complex holdings and investments in many different countries worldwide Without access to the company s financial records it has been difficult to trace them. The owners of InvestPlus reaped substantial profits but led lavish lifestyles and are thought to have burned through most of their assets.
Which is the BEST way your firm could pursue recovery of damages?

• A. Request a summons for the owners of InvestPlus to provide testimony on their financial status
• B. Investigate whether third parties have facilitated the scheme and, if so, pursue legal action against them
• C. Contact other defrauded investors to see if they have further information on the location of recoverable assets
• D. File mutual legal assistance treaty requests in the jurisdictions where InvestPlus is thought to have assets

An internal auditor is conducting a quality assurance review of sales results and records for a large U.S.
based aerospace and defense contracting firm The auditor has been tasked with reviewing the recordsofsales departments in several countries because the company has raised concerns over accounting discrepancies and possible issues with inflated sales figures.
In the records of one sales department the auditor documents an unusually high number of returnsofairplane parts. These returns come from purchasers who executed sales contracts only to invoke right of return shortly afterwards.
Upon reviewing thesesales contracts,the auditor cannot find specific provisions regarding right of return for purchasers.
Given this information which is the MOST likely conclusion the internal auditor will make?

• A. The sales department may be involved in a tax evasion scheme involving falsified returns to disguise undisclosed assets
• B. The sales department manager may be involved in an embezzlement scheme tied to the returned airplane parts
• C. The sales department may beinvolved in a fraudulent revenue recognition scheme related to hidden payment andrefundterms
• D. The sales department may be violating sanctions through the undocumented saleofdual-use goods to countriessubjectto U S sanctions

Person A has a savings account with Bank X. Five years later Person A was appointed chief minister of infrastructure lor Country Y a high-risk jurisdiction.

• A. Initiate an audit of the original source of funds in Person A's account
• B. Restrict activity in Person A's account since he is now a political figure in a high-risk country
• C. Because Country Y is a high-risk jurisdiction immediately file a SAR/STR
• D. Establish permanent and improved monitoring of Person A's savings account

A large banking institution retains a collections law firm to determine if a $25 million default on a commercial loan is fraud. The attorneys need to determine if the defaulting parly is worth pursuing in civil litigation by first determining if the defaulting entity and/or individual committed fraud by intentionally defaulting.
Which is an indicator or a red flag that the defaulting party could be committing fraud?

• A. A history of bankruptcies is found relating to the defaulting entity or individual
• B. The loan IS collateralized by accounts receivable
• C. The individual or entity involved in the default loan maintains numerous holding companies
• D. The payments toward the loan have been delinquent many times over several years of maintaining Ihe loan

The bookkeeper lor Corporation A has been charged wilh embezzling corporate funds. It was discovered that the bookkeeper misappropriated customer checks received in the mail cashed the checks and wrote-off the accounts receivable asuncollectible. The corporation had policies to ensure there was a segregation of duties.
Which condition is MOST likely to have provided an opportunity for the bookkeeper to embezzle corporate income checks?

• A. The bookkeeper and receptionist who opens the mail cover lor each other while the other is at lunch
• B. The outside accountant receives and reconciles the monthly bank statement
• C. The corporate mail duties of the receptionist which include logging the receipt of payments from customers are covered by a student intern when the receptionist calls in sick
• D. The bookkeeper enters all payments received (rom customers into the corporate Cash Receipts Journal