Question 1

When fraud examiners investigate a bankruptcy or divorce resulting from fraud, where do they focus?

Accepted Answer

A)   Activity shortly before the bankruptcy filing or divorce
B)   Activity after the bankruptcy filing or divorce
C)   Activity several years prior to the bankruptcy filing or divorce
D)   Activity throughout the individual's entire life

Question 2

Which of the following is NOT involved in money laundering?

Accepted Answer

A)   Engaging in financial transactions to conceal the source of the funds involved
B)   Engaging in financial transactions to conceal the amount of the funds involved
C)   Engaging in financial transactions to conceal the identity of the funds involved
D)   Engaging in financial transactions to conceal the destination of the funds involved

Question 3

Most divorce fraud cases are:

Accepted Answer

A)   civil cases.
B)   criminal cases.
C)   protected by Chapter 7.
D)   rarely investigated through surveillance.

Question 4

Which of the following organizations sets the international standards for combating money laundering?

Accepted Answer

A)   The United Nations Monetary Fund Task Force
B)   The International Monetary Fund Task Force
C)   The World Bank Action Task Force
D)   The Financial Action Task Force

Question 5

Which bankruptcy participant administers a bankruptcy estate?

Accepted Answer

A)   Examiner
B)   Trustee
C)   Adjuster
D)   Creditor

Question 6

The best description of a fraudulent transfer in a bankruptcy setting is:

Accepted Answer

A)   A transfer of assets made with the intent of placing them outside the reach of a bankruptcy court
B)   A transfer of cash in exchange for supplies or other business assets
C)   A transfer of assets made to another institution before a bankruptcy is filed
D)   A transfer to a fund or other account to hold assets for a period of time

Question 7

Which of the following statements is true concerning divorce cases?

Accepted Answer

A)   Bankruptcy laws and statutes are much simpler than divorce laws and statutes.
B)   Divorce fraud never involves hiding or transferring assets.
C)   Most divorce cases are civil cases, with no criminal charges filed.
D)   It is illegal for divorce attorneys to hire investigators to help them find hidden assets.

Question 8

When a bankrupt company's only listed address and phone number is a post office box and an answering service, we may see this as a flag of what type of fraud?

Accepted Answer

A)   Illegal concealment of assets
B)   Planned bankruptcy fraud
C)   Fraudulent transfers
D)   None of the above

Question 9

Which of the following best describes a "bust-out" in regard to bankruptcies?

Accepted Answer

A)   A planned bankruptcy
B)   Jailbreak planned by fraud perpetrators
C)   Skipping out on bail
D)   Fraud prevention program for convicted fraudsters

Question 10

Jim Salazar is the majority shareholder of XYZ Co. XYZ Co. filed for Chapter 11 bankruptcy on January 1, 20X8. Which of the following may be considered a fraudulent transfer?

Accepted Answer

A)   Transfer of land to Jim's sister Alice on July 1, 20X6.
B)   Sale of inventory at regular price to a new customer on February 15, 20X8.
C)   Transfer of fixed assets to Jim's brother John on December 15, 20X7.
D)   Transfer of inventory to a subsidiary for less than fair value on August 1, 20X6.
E)   Both a and c are correct.

Question 11

Karl Mathers set up a new company and obtained loans to buy inventory with the intention of filing for bankruptcy after two years and selling the inventory later to a close friend at deep discounts. What is the term for this type of bankruptcy fraud?

Accepted Answer

A)   Commercial loan fraud
B)   Inventory dumping fraud
C)   Bust-out
D)   None of the above

Question 12

Which of the following actions is NOT prohibited for a trustee or other official overseeing bankruptcy proceedings?

Accepted Answer

A)   Refusing to permit inspection of documents of the estate in the person's charge
B)   Refusing to sell assets in the person's charge
C)   Purchasing, indirectly, any property of the debtor's estate
D)   Purchasing, directly, any property of the debtor's estate

Question 13

Under which of the following conditions can bankruptcy and divorce parties potentially sue fraud investigators?

Accepted Answer

A)   The fraud investigator makes a statement supported by fact.
B)   The fraud investigator makes a statement based on opinion.
C)   The fraud investigator makes a statement about the opposing side.
D)   The fraud investigator makes a statement about the court process.

Question 14

Which of the following may indicate concealment of assets during a bankruptcy?

Accepted Answer

A)   Large transfers of assets to related parties or individuals
B)   Rapid reduction in assets
C)   Missing, inaccurate, or damaged documents
D)   All of the above

Question 15

Bankruptcy and divorce can be which of the following categories?

Accepted Answer

A)   Criminal matters
B)   Civil matters
C)   Either of the above
D)   Neither of the above

Question 16

Section 548 of the Bankruptcy Code defines as fraudulent certain transfers made, or obligations incurred, within what specified time period?

Accepted Answer

A)   12 months
B)   9 months
C)   6 months
D)   3 months
E)   1 month

Question 17

Which of the following is the best description for the purpose of an estate created for divorce or bankruptcy?

Accepted Answer

A)   To pay for the all of the legal fees in filing a Chapter 7, 11, or 13 bankruptcy or to pay the legal fees of a divorce
B)   To protect the assets of the party filing bankruptcy so that no further losses are realized
C)   To settle the debts of the debtor or divorce partner of which the bankruptcy or divorce court has control
D)   To hold only the physical assets of the divorce partner or debtor for the period of the bankruptcy or divorce

Question 18

Which of the following is NOT an element of a fraudulent transfer that is made for less than a reasonably equivalent value?

Accepted Answer

A)   The debtor knew the debts could not be repaid at maturity
B)   The debtor becomes insolvent as a result of the transfer
C)   The debtor misstates the value of the transfer on the books
D)   The debtor's capital remaining after the transfer is unreasonably small

Question 19

What is generally indicated in a divorce or bankruptcy when books and records of the debtor/marital partner have been destroyed or are hard to locate?

Accepted Answer

A)   Fraud has caused the bankruptcy or divorce
B)   The bankruptcy or divorce is used to perpetrate the fraud
C)   The bankruptcy or divorce is used to conceal the fraud
D)   None of the above

Question 20

Which of the following is a requirement to work as an entry-level Criminal Investigation special agent for the IRS?

Accepted Answer

A)   Completion of at least two years of college
B)   Completion of at least 9 semester hours in accounting at the college level
C)   Completion of at least 15 semester hours of college level courses in finance, economics, business law, tax law, or money and banking
D)   Be thirty-seven years of age or younger

Exam 16: Bankruptcy, Divorce, and Tax Fraud

What is generally indicated in a divorce or bankruptcy when books and records of the debtor/marital partner have been destroyed or are hard to locate?

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Which of the following statements is true concerning divorce cases?

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Which of the following may indicate concealment of assets during a bankruptcy?

Correct AnswerverifiedShow Answer

Section 548 of the Bankruptcy Code defines as fraudulent certain transfers made, or obligations incurred, within what specified time period?

Correct AnswerverifiedShow Answer

Which of the following organizations sets the international standards for combating money laundering?

Correct AnswerverifiedShow Answer

Karl Mathers set up a new company and obtained loans to buy inventory with the intention of filing for bankruptcy after two years and selling the inventory later to a close friend at deep discounts. What is the term for this type of bankruptcy fraud?

Correct AnswerverifiedShow Answer

Which of the following is NOT an element of a fraudulent transfer that is made for less than a reasonably equivalent value?

Correct AnswerverifiedShow Answer

Which of the following is NOT involved in money laundering?

Correct AnswerverifiedShow Answer

Under which of the following conditions can bankruptcy and divorce parties potentially sue fraud investigators?

Correct AnswerverifiedShow Answer

Bankruptcy and divorce can be which of the following categories?

Correct AnswerverifiedShow Answer

Which bankruptcy participant administers a bankruptcy estate?

Correct AnswerverifiedShow Answer

When fraud examiners investigate a bankruptcy or divorce resulting from fraud, where do they focus?

Correct AnswerverifiedShow Answer

The best description of a fraudulent transfer in a bankruptcy setting is:

Correct AnswerverifiedShow Answer

Which of the following actions is NOT prohibited for a trustee or other official overseeing bankruptcy proceedings?

Correct AnswerverifiedShow Answer

Which of the following is the best description for the purpose of an estate created for divorce or bankruptcy?

Correct AnswerverifiedShow Answer

Which of the following is a requirement to work as an entry-level Criminal Investigation special agent for the IRS?

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Jim Salazar is the majority shareholder of XYZ Co. XYZ Co. filed for Chapter 11 bankruptcy on January 1, 20X8. Which of the following may be considered a fraudulent transfer?

Correct AnswerverifiedShow Answer

Which of the following best describes a "bust-out" in regard to bankruptcies?

Correct AnswerverifiedShow Answer

Most divorce fraud cases are:

Correct AnswerverifiedShow Answer

When a bankrupt company's only listed address and phone number is a post office box and an answering service, we may see this as a flag of what type of fraud?

Correct AnswerverifiedShow Answer

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