CFE Exam: Law

To determine materiality, ask:

"Would a reasonable investor wish to know this information to make an informed decision?" If the answer is "yes," then this information, or the lack thereof, has a high likelihood of being deemed material.

As a general rule, to determine materiality, the fraud examiner needs to answer the following question:

"Would a reasonable investor wish to know this information to make an informed decision?" If the answer is "yes," then this information, or the lack thereof, has a high likelihood of being material.

Two principal components of the FCPA

(1) the anti-bribery provisions and (2) the accounting provisions. In short, the anti-bribery provisions make it unlawful to bribe foreign government officials to obtain or retain business, and the accounting provisions require publicly traded companies subject to the FCPA's jurisdiction to keep accurate books and records and adopt internal controls to prevent improper use of corporate funds.

Lay Testimony

(sometimes called factual testimony), where witnesses testify about what they have experienced firsthand & factual observations.

Businesses commonly used to front money laundering operations

- Bars - Restaurants - Nightclubs - Vending Machines - Wholesale Distribution

Income and wealth tax evasion (Common Forms)

- Failing to submit a report of one's taxable income, if required - Intentionally misrep. one's income/wealth - Pretending to transfer assets to another person or entity to lower tax liability - Intentionally failing to withhold the taxable portion of an employee's income, if so required - Failing to report foreign bank accounts or other taxable assets, if required - Falsely claiming income was earned in another jurisdiction to lower tax liability

customer due diligence (CDD) procedures for financial institutions under the Financial Action Task Force (FATF) Recommendations

- Identifying the customer and verifying the customer's identity through reliable, independent source documents or data - Identifying the beneficial owner of the account or service, including the ownership and control structure of organizations - Obtaining information and understanding the purpose and intended nature of the business relationships involved in the account or service - Conducting ongoing due diligence on the business relationship and transactions of the customer to ensure that they are consistent with the customer's profile

Common Tyles of Obstruction of Justice

- Influencing or injuring any officer of the court or juror by force, threats of force, intimidating communications, or corrupt influence - Influencing a juror through a writing - Stealing or altering records or processes by parties that are not privy to the records - Using force or threats of force to obstruct or interfere with a court order - Destroying documents related to a future proceeding - Tampering with a witness, victim, or an informant (e.g., killing or attempting to kill, using force or threats of force, intimidating, influencing with bribes or other corrupt means, misleading, or harassing the protected parties) - Influencing, obstructing, or impeding a government auditor in the performance of their official duties - Obstructing the examination of a financial institution

Common defenses to Tax Evastion

- No Tax Deficiency: The defendant can establish that there is no tax deficiency. In most jurisdictions, if there is no deficiency, there is no tax liability. This is generally the best defense, if available, because several other defenses might negate willfulness but do not necessarily eliminate a tax liability with interest and penalties. - Lack of Willfulness: good faith belief that one is not violating the tax law, based on a misunderstanding caused by the law's complexity, negates willfulness. - Avoidance, not Evasion - Reliance on an Attorney or Accountant - Mental Illness

The World Bank Principles for Effective Insolvency and Creditor/Debtor Regimes (World Bank Principles) recommends that the administrator have broad powers, including:

- The right to cancel fraudulent contracts or transactions entered into by the debtor - The power to collect, preserve, and dispose of the debtor's property - The ability to interfere with contracts to meet the objectives of the insolvency process - The power to examine the debtor, the debtor's agents, or other people with knowledge of the debtor's affairs and compel them to provide relevant information

3 determinations to allow an expert to testify

1) Is the person qualified as an expert witness? 2) Will the expertise of the witness assist the jury in understanding the evidence or determining a fact at issue? 3) Is the testimony reliable?

false statements to government agencies

1) Knowingly and willfully (or with reckless disregard for truth or falsity) 2) Made a false claim or statement (or used a false document) 3) That was material (i.e., sufficiently important or relevant to influence decision-making) 4) Regarding a matter within the jurisdiction of a government agency 5) With knowledge of its falsity

The essential elements of fraud based on the failure to disclose material facts

1) The defendant had knowledge of a material fact. 2) The defendant had a duty to disclose the material fact. 3) The defendant failed to disclose the material fact. 4) The defendant acted with intent to mislead or deceive the victim(s).

elements of fraudulent misrepresentation of material facts

1) The defendant made a false statement (i.e., a misrepresentation of fact). 2) The false statement was material (i.e., the statement was sufficiently important or relevant to influence decision-making). 3) The defendant knew the representation was false. 4) The victim relied on the misrepresentation. 5) The victim suffered damages as a result of the misrepresentation.

Elements of Perjury

1) The defendant made a false statement. 2) The defendant made the false statement while under oath. 3) The false statement was material or relevant to the proceeding. 4) The defendant made the statement with knowledge of its falsity.

The International Organization of Securities Commissions Objectives and Principles of Securities Regulation (IOSCO Principles) is based on the following three objectives

1) The protection of investors 2) Ensuring that markets are fair, efficient, and transparent 3) The reduction of systemic risk

Steps of Money Laundering Process

1. Placement 2. Layering 3. Integration

Initial Pleading Requirements

A civil action begins when the plaintiff files a pleading with the appropriate court, usually in the jurisdiction in which the defendant resides or where the claim arose. The pleading sets out the complaint against the defendant and the remedy that the plaintiff is seeking. The required contents of the plaintiff's pleadings will vary somewhat between jurisdictions, but most jurisdictions require fact pleadings, meaning the plaintiff must identify: - The grounds for legal relief - A summary of the evidence - The specific facts on which the party's claim relies - Key items of expected evidence

Prosecutorial Bargaining

A method of disposing of cases in a growing number of countries is through bargaining agreements, which occur when a defendant makes an agreement with prosecutors to plead guilty or submit a recorded confession in exchange for lesser charges or a reduced sentence. Most civil law countries do not have pleas, per se, but there can still be bargaining agreements. A defendant can enter a confession, but the confession is submitted as evidence in an otherwise standard proceeding. However, a confession in evidence clearly reduces the difficulty of prosecuting the case, so an agreement between the prosecution, the defendant, and the court can be made to reduce the sentence in exchange for a voluntary confession.

Redemption Scheme

A person can redeem some insurance policies, such as life insurance, before the event that triggers the insurance occurs. In other words, the insurer agrees to pay the beneficiary of the policy an amount less than what the payout on a claim occurrence (in the case of life insurance, the death of the insured) would be. Using illicit assets, launderers can purchase life insurance or other redeemable contracts for themselves or their associates. If the investigator did not know that the launderer bought the insurance policy with illicit assets, the redemption payout would appear legitimate.

bankruptcy using forged documents

Bankruptcy petitions are sometimes filed using forged documents, and often, the filings are made using stolen identities, usually as part of a larger scheme using an assumed identity. If someone files for bankruptcy using a stolen identity, it can take years to correct the credit records of the person whose identity was stolen. Alternatively, a debtor might file for bankruptcy using a name obtained from obituary notices.

Preservation of Relevant Evidence

Common law jurisdictions, in which litigants are usually obligated to disclose relevant information to the opposing side, impose a duty on litigants to take affirmative steps to preserve relevant evidence, and this duty might arise prior to the commencement of litigation. in common law courts, this typically arises when litigation is reasonably anticipated or contemplated. When an organization is involved in litigation, this duty applies to the organization's management, and it extends to employees likely to have relevant information. A violation occurs when information that is relevant to anticipated or existing litigation is lost, destroyed, or otherwise made unavailable.Violating this can result in several adverse sanctions for the offending party, and such sanctions can arise from both intentional acts and accidental acts through negligence. The adverse consequences can include, but are not limited to, monetary penalties, the drawing of adverse inferences of fact, and criminal penalties. The theory behind such consequences is that the individual who makes evidence unavailable following the probable initiation of a lawsuit is aware of its detrimental effect upon a case.

fraudulent conveyance bankruptcy scheme

Debtors often attempt to conceal their assets by transferring the assets to another person or a company. A transfer is a fraudulent conveyance if the purpose of the transfer is to hinder, delay, or defraud a creditor.

Appealing a civil case

Generally, both sides in a civil case may appeal from an adverse judgment, either as to liability or damages. In common law systems, the appellate court is largely limited to reviewing the legal decision of the trial court, rather than the factual determination of the judge or jury. The appeals court may reverse & remand for a new trial on some or all of the issues, order that a certain portion of the awarded damages be remitted, or enter final judgment, if legal grounds are clear, in favor of either party. In most civil law systems, the civil appellate court may review issues of both law and fact, meaning it may obtain additional witness testimony, gather new documentary evidence, obtain new expert opinions, and so forth. The appellate court may reverse, affirm, remand for additional proceedings, and (in some jurisdictions) modify the trial court's decision.

common types of administrative penalties

Imprisonment and other criminal penalties are not generally imposed in administrative proceedings. some common types include monetary fines and penalties, license suspension or revocation, and debarment. Administrative proceedings can result in the suspension or revocation of a professional license.

Laws Restricting the Interview Process

Interviews, and especially interviews of suspects, can expose the organizational powers administering the interview and the individual conducting the interview to certain legal risks. Thus, before engaging in an interview, the fraud examiner must understand the ramifications of their actions, which requires an understanding of certain legal issues and how they limit or affect the ways in which an interview may be conducted. t most jurisdictions have restrictions concerning the ways in which employers can conduct interviews. Such restrictions might originate from employment contracts, collective labor laws, laws protecting labor rights, the common law, laws protecting fundamental rights, other applicable statutes, and so on.

making a false statement to the government

Laws prohibiting false claims and statements to government agencies make it illegal for a person to lie to, or conceal material information from, a government agency. A false claim is an assertion of a right to government money, property, or services that contains a misrepresentation. A false statement is an oral or written communication, declaration, or assertion that is factually untrue. Generally, to prove a violation, the government must show that the defendant: - Knowingly & willfully (or with reckless disregard for truth or falsity) - Made a false claim/statement (or used a false document) - That was material (i.e., sufficiently important or relevant to influence decision-making) - Regarding a matter within the jurisdiction of a government agency - With knowledge of its falsity

Qualifying an expert witness

The process of evaluating whether an expert is qualified mainly centers on the candidate's formal education and work experience—whether that includes thirty years in law enforcement or ten years in a large accounting firm. But there is no standard educational requirement for expert testimony; a witness with no formal education may be qualified based on either special training or experience (CFE cert. is not enough). Some other factors that may be considered include the candidate's: - Awards and honors - Licensing or certification - Technical training - Published books and journal articles - Positions in professional associations, societies, & orgs.

reporting requirement regarding large cash transactions with customers for financial institutions and designated nonfinancial businesses and professions (DNFBPs) under the Financial Action Task Force (FATF) Recommendations

Under the best practices provided in the Financial Action Task Force (FATF) Recommendations, countries should implement a reporting requirement for financial institutions and designated nonfinancial businesses and professions (DNFBPs) that engage in cash transactions above the jurisdiction's designated threshold. The reports should cover domestic and international cash transactions. Many jurisdictions implement this reporting requirement. Note that the recommended reporting requirement does not apply to everyone; it only applies to financial institutions and DNFBPs. DNFBPs include: - Casinos (including internet- and ship-based casinos) - Real estate agents - Dealers in precious metals and stones - Legal professionals at professional firms (not internal legal professionals) -Trust and company service providers

Jury Trials

While jury trials are typically used in criminal proceedings in common law jurisdictions, this is not always the case. For some cases, usually minor criminal offenses, a jury trial might not be available. In serious cases, however, jury trials are typically available. Additionally, many common law jurisdictions allow the defendant to waive the right to trial by jury. When no jury is present, the judge serves as the fact finder.

Intrusion into an individual's private matters (often referred to as intrusion upon seclusion)

a common law invasion of privacy civil wrong that occurs when an individual intentionally encroaches into an area where another individual has a reasonable expectation of privacy and the encroachment would be highly offensive or objectionable to a reasonable person

Search Warrant

a court order that grants government authorities the right to search a premises or property for information pertinent to a case. The requirements for search warrants or other similar authorization, however, do not apply to private parties acting on their own accord because the right to be free from unreasonable searches and seizures does not protect against actions by such parties. Instead, it protects individuals from actions by government authorities. Thus, to determine whether a search warrant or similar authorization is required for a search to be conducted in an investigation, it is necessary to first determine whether government authorities are involved in the search.

Consent

a recognized exception to the requirement that government agents must obtain a warrant before they search a person, location, or vehicle for evidence of a crime. Individuals are always free to consent to searches. If a suspect consents to a search or seizure by police or a government agent, it eliminates the need for a search warrant. That is, the consent to search waives the person's right to be free from government searches. To be valid, it must be voluntary. if obtained by force, duress, or bribery it will generally be held to be involuntary and invalid; therefore, it will not constitute a valid waiver of the person's right to be free from unreasonable searches. Jurisdictions are mixed, however, as to whether consents obtained by deceit constitute valid waiver. Also, there is generally no requirement that government agents warn suspects that they have a right to refuse consent.

Conspiracy

a situation in which two or more people agree to commit an illegal act. The essential elements that must be shown to prove a conspiracy are as follows: 1) The defendant entered into an agreement with at least one other person to commit an illegal act. 2) The defendant knew the purpose of the agreement and intentionally joined in the agreement. 3) At least one of the conspirators knowingly committed at least one overt act in furtherance of the conspiracy.

Value-added Tax (VAT)

a system that imposes a tax on an item that is assessed incrementally based on its increase in value at each point along a supply chain, from manufacture, to wholesale, to retailer, to consumer; the tax is collected by the seller in each transaction, and only the difference between the price paid by the initial purchaser and the price paid by the subsequent purchaser is taxed

Excise Tax

a tax on a narrow class of goods or services (e.g., tobacco or gasoline), usually assessed one time (per jurisdiction) at the manufacturer or wholesaler level

Sales Tax

a tax on goods or services, usually assessed at the consumer level and collected by the retailer or seller at the point of sale

Fidelity Insurance

a type of insurance under which the insured entity is covered against losses caused by the dishonest or fraudulent acts of its employees.

reorganization

allows the debtor respite from creditors so that the debtor can reorganize its financial affairs and continue as a going concern. Some reorganization proceedings involve putting the debtor's business under receivership for a certain period to ensure as much debt is paid back as possible.

Mediation

an impartial third person assists the parties in reaching a resolution to the dispute. The mediator does not decide who should win but instead works with the parties to reach a mutually agreeable settlement

The Financial Action Task Force (FATF)

an intergovernmental body that was established at the G-7 Summit in 1989. Its purpose is to develop and promote standards and policies to combat money laundering and terrorist financing at both the national and international levels. The Recommendations, revised in 2012, created the most comprehensive standard with which to measure a country's anti-money laundering (AML), counterterrorism, & nuclear proliferation laws and policies. serve as a basic framework of laws that its members should have. While the FATF Recommendations are not req by the FATF's members, and the FATF acknowledges that following each rule might not be possible, members often adopt them.

The International Organization of Securities Commissions (IOSCO)

an international organization comprised of securities commissioners and administrators responsible for securities regulation and the administration of securities laws in their respective countries. IOSCO is recognized as the international standard-setter for securities markets, and the organization's members regulate more than 95% of the world's securities markets.

Tax Evasion

any fraudulent actions that a taxpayer commits to avoid reporting/paying taxes. To est. criminal liability for tax evasion, most jurisdictions require a willful attempt to evade or defeat taxes in an unlawful manner. a good faith/legitimate misunderstanding of applicable law typically negates willfulness.honest mistakes, in contrast to willful evasion, don't count. a court might find that a defendant's claimed misunderstanding of the law is implausible given the evidence presented.

Civil Law Systems

apply laws from an accepted set of codified principles or compiled statutes. Individual cases are then decided in accordance w/ these basic tenets. Under this system, judges/judicial administrators are bound only by the civil code, not by the previous decisions of other courts. In deciding legal issues, a civil law judge applies the various codified principles to each case.

Judges in Civil Law Jurisdictions . . .

are not bound by previous court decisions, but, in practice, many do use previous decisions to guide their interpretations of codes and statutes.

double-pledging collateral schemes

borrowers pledge the same collateral (i.e., an item of value used to secure or guarantee a loan) with different lenders before liens are recorded and without telling the lenders.

The right to be free from unreasonable search and seizure by government authorities

can apply to searches in the workplace. However, in this case, the law against unreasonable search and seizure by government authorities will not apply if the search was conducted by a private party without any involvement by government authorities.

Obstruction of Justice

ccurs when an individual engages in an act designed to impede or obstruct the investigation or trial of other substantive offenses

Consumption tax

collected from the proceeds of the sale of goods or services.

United Nations' (UN) International Covenant on Civil and Political Rights (ICCPR)

commits signing countries to recognizing various rights of citizens. Part III of the ICCPR includes the rights of those accused of crimes. As one of these rights, the ICCPR states that all people accused of crimes are entitled to a fair hearing before a court or other tribunal and that the results of the trial should be made public to protect the criminal justice system's transparency. This right includes: - Adequate time to prepare a defense - The ability to be represented by legal counsel of the defendant's choosing and to freely communicate with counsel - The right to have accusations and the procedures explained through a translator for free, if necessary - The right to be tried for charges without undue delay - The right to examine or have examined the witnesses against the accused - Freedom from testifying against oneself or compelled confessions

Layering

conceals the source of the money through a series of transactions and bookkeeping tricks. In the final step, integration, the now-laundered money is withdrawn from the legitimate account to be used for whatever purposes the criminals have in mind for it.

Official Bribery

elements of official bribery vary by jurisdiction, but they generally include: - The defendant gave or received (offered or solicited) a thing of value. - The recipient was (or was selected to be) a public official. - The defendant acted with corrupt intent. - The defendant's scheme was designed to influence an official act or duty of the recipient.

reciprocal loan arrangements scheme

insiders in different banks cause their banks to lend funds or sell loans to other banks with agreements to buy their loans—all for the purpose of concealing loans and sales.

Tax Shelters

investments that are designed to yield a tax benefit to the investor. Such investments are made to produce tax write-offs, generate deductions, or convert ordinary income into capital gains taxed at a lower rate. Tax shelters might be legal or illegal; they are generally aimed at avoidance, although they might, on occasion, cross the line into evasion if they take abusive forms. An illegal, abusive shelter is one that involves artificial transactions with little or no economic reality. For example, abusive tax shelters might artificially inflate the value of donations to charity; falsely identify an asset for business use that is mainly intended for pleasure; claim excess depreciation or depletion; or engage in the cross-leasing of luxury items such as automobiles, boats, vacation homes, and aircrafts.

Lay Witness

is anyone who provides nonexpert testimony. Note, however, that an expert witness might also provide lay testimony. Typically, a fraud examiner who worked on a case will be capable of providing lay testimony based on observations made during the investigation. When a trial involves issues that are complex or unfamiliar to most people, as is common in incidents of fraud, expert testimony is appropriate to help the fact finder understand these issues.

Insurance Prepayment Scheme

launderer makes advance payments on insurance premiums.

Alternative remittance systems

methods of transferring funds from a party at one location to another party (whether domestic or foreign) without the use of formal banking institutions. These systems are characterized by the lack of direct physical or digital transfer of currency from the sender to the receiver. Instead, in the typical alternative remittance system, the payer transfers funds to a local broker who has a connection to another broker in the region where the payee is located. The latter broker then distributes the funds to the payee.The parties involved form a network and track their exchanges on an informal ledger. Unlike formal financial institutions, these ledgers will generally not list specific information about the payers and payees (such as bank account numbers and names) but will keep track of amounts owed. When the first broker requests that another broker in the network distribute funds, the debt is recorded in the ledgers. These debts between brokers could be paid back by offsetting transactions (i.e., the first broker pays someone locally at the request of the second broker). Alternatively, the parties could meet to settle all outstanding debts at a later time.

over-shipment scheme

money launderers understate the quantity of goods that are shipped. More goods are shipped than the company invoices for.

Self-regulatory organizations (SROs)

nongovernmental entities that exercise some level of regulatory authority over the operations, standards of practice, and business conduct of an industry or profession.

Insider Trading

occurs when an insider—someone who possesses inside information about a security—buys or sells securities on the basis of material information about the security that is not available to the public. Inside information is any material, nonpublic information about a security that is not generally available to the public and that could affect the security's price

Overstating Revenues

occurs when the money launderer records more income on a business's books than the business actually generates. The fictitious revenue accounts for the illegal funds that are secretly inserted into the company.

Both the UK Bribery Act and the U.S. Foreign Corrupt Practices Act (FCPA) make it a crime to:

offer foreign public officials bribes or to accept bribes from them in connection with international business transactions, and their prohibitions on bribing foreign government officials are broadly comparable. Thus, like the FCPA, the UK Bribery Act seeks to punish corruption on a global level, but the UK Bribery Act has an even broader application than the FCPA.

Fiduciary Relationships

officers, directors, high-level employees of a corporation or business, & agents and brokers—owe certain duties to their principals/employers, & any action that runs afoul of such fiduciary duties constitutes a breach. The principal duties are loyalty and care.

concealed assets scheme

often includes trying to hide books and records

Duty of Care

people in a fiduciary relationship must act with such care as an ordinarily prudent person would employ in similar positions.

prejudgment attachments

plaintiffs in fraud cases can seek a court order to prevent the defendant or a third party from disposing of, spending, damaging, transferring, or concealing assets or property while the lawsuit is pending. Depending on the jurisdiction, however, the order may be called a freezing order, a precautionary attachment, a preventative injunction, or a similar term. In some jurisdictions, courts also have the authority to seize assets or property temporarily while the lawsuit is pending.

bustout scheme

planned and fraudulent bankruptcy. an apparently legitimate business orders large quantities of inventory or other goods on credit, and then disposes of those goods through legitimate or illegitimate channels. Because the point is to quickly resell the goods for cash, the fraudster is likely to purchase more liquid items like inventory than real estate, insurance policies, or services. The perpetrator then closes shop, absconding with the proceeds and leaving the suppliers unpaid. The debtor might then go into bankruptcy. Often, by this point the debtor has already made false accounting entries or taken other steps to conceal the assets or make the sales look legitimate. Other times, debtors simply flee the jurisdiction or do not show up at the proceedings.

Mail Fraud

prohibit the use of the country's mail system to perpetrate fraud. In the United States, the mail fraud statute also applies to the use of private interstate commercial carriers (e.g., FedEx, UPS, and DHL) in connection with a fraud scheme. Mail fraud laws generally give the government broad authority to prosecute fraud schemes, even if parts of the scheme occur in another country

U.S. Foreign Corrupt Practices Act's (FCPA)

prohibits the payment or offer of anything of value to a foreign official for the purpose of obtaining or retaining business. Promises to pay are considered items of value. Furthermore, foreign companies are within the reach if they have registered securities or are otherwise required to file under the U.S. Securities Exchange Act of 1934 (the Exchange Act).

Litigation privilege

protects materials prepared in anticipation of litigation. Thus, the litigation privilege applies only to documents and things prepared in anticipation of litigation. This protection prevents the disclosure of communications made, and documents prepared, for the purpose of litigation. Consequently, the protection may extend to communications of, and documents created by, third-party agents (e.g., consultants or fraud examiners) in preparation for litigation.

Recommendation on Combating Bribery in International Business (Recommendation)

published by the Organisation for Economic Co-operation and Development (OECD) in 1994, urges member states to deter and penalize the bribery of foreign public officials by taking "concrete and meaningful steps" to improve the following areas within their respective infrastructures: - Criminal, civil, commercial, and administrative laws - Tax systems and regulations - Banking and accounting requirements and practices - Laws and regulations related to public subsidies, licenses, and contract procurement

Damages

remedies for the victim's recovery of money from the defendant because of, and as compensation, reimbursement, or reparation for, the defendant's legal offense; the remedy most commonly available to the successful plaintiff, and the main purpose of damages is to compensate the plaintiff for the loss caused by the defendant.

Duty of Loyalty

requires that the employee/agent act solely in the best interest of the employer/ principal, free of any self-dealing, conflicts of int., or other abuse of the principal for personal advantage.

Authentication Requirement

serves to ensure that evidence is what it purports to be and is genuine, not a forgery.

Legal professional privileges

subject to waiver. Because these privileges only protect confidential communications, the protection they provide will be waived for communications disclosed to 3rd parties who have little/nothing to do w/ the client's pursuit of legal rep. because such disclosures demonstrate a lack of confidentiality.Generally, waiver occurs when the client, who holds the privilege, voluntarily discloses (or consents to/ encourages someone else disclosing) any significant part of the privileged communications. Although the client holds the privilege, can be waived by the client's attorney or a 3rd party—someone who is neither the attorney nor the client.

Oral Examination or Deposition

sworn testimony given by a party or witness upon questioning by counsel for one of the parties before trial and outside of court, usually in a lawyer's office. Opposing counsel and a stenographer, who administers the oath and transcribes the testimony, are also present. may be used to obtain evidence about the party's own case or the opponent's, or it may be used to preserve testimony for trial. Some common law jurisdictions do not allow this pretrial, but written examinations are still available pretrial.

Money Services Business (MSB)

term used w/ growing frequency to define a regulatory class of non-depository financial service providers that transmit/convert money. Although has particular meanings in diff. jurisdictions, it gen. includes any business that operates in 1 or more of the following capacities: - Currency exchangers - Check cashers - Issuers, sellers, or redeemers of traveler's checks, money orders, or stored value - Money transmitters - Prepaid access providers or sellers offer an alternative to depository institutions for both financial services & money laundering. For this reason, an individual unable to transfer illegal funds into the traditional depository banking system might turn to these. In addition, most operate under less strict regs. than traditional financial institutions. These overall less stringent requirements tend to raise the money laundering risk in certain transactions involving users. However, there is a regulatory trend to expand certain requirements, such as customer due diligence (CDD) programs, to these

Commercial Bribery

the corruption of a private individual to gain a commercial or business advantage. That is, in commercial bribery schemes, something of value is offered to influence a business decision rather than an official act. The elements of commercial bribery vary by jurisdiction, but they typically include: - defendant gave/received a thing of value. - The defendant acted with corrupt intent. - defendant's scheme designed to influence recipient's action in a business decision. - The defendant acted without the victim's knowledge or consent.

Ineffective defenses for tax crimes

the death of the taxpayer often cannot be used as a defense because taxes owed due to tax evasion typically survive the taxpayer's death, meaning the deceased taxpayer's estate will be held liable. Also, liabilities owed as a result of tax evasion may not be discharged in bankruptcy proceedings. If a person commits a tax fraud offense, amending fraudulent information held by the government will not generally relieve the taxpayer of criminal liability.

Churning

the excessive trading of a customer account to generate commissions while disregarding the customer's interests. Specifically, this occurs when an investment professional excessively trades an account for the purpose of increasing their commissions instead of furthering the customer's investment goals.

Notice Pleading

the facts in the pleading must merely put the defendant on notice of the alleged claims; do not need to include the specific facts underlying the case.

Integration

the final stage in the laundering process. In this stage, the money is integrated back into the economy in a way that makes it appear to be part of a legitimate business transaction.

Placement

the first stage of the money laundering process. In this stage, the launderer introduces their illegal profits into the financial system. It is at this stage that legislation has been developed to prevent launderers from depositing or converting large amounts of cash at financial institutions or taking cash out of the country. Money laundering schemes are most often detected at this stage

standard of proof for civil trials in civil law jurisdictions

the inner conviction of the judge, sometimes called the conviction intime standard. This standard requires stronger evidence than the common law preponderance of the evidence standard used in civil trials but not as much as the common law beyond a reasonable doubt standard used in criminal trials.

Liquidation

the most basic type of bankruptcy proceeding and involves accounting for all dischargeable debts the subject owes, identifying all of the subject's assets, and liquidating nonexempt assets to pay off creditors. This process allows the debtor to get a court or administrative order under which some or all debts may be eliminated.

credit data blocking scheme

the perpetrator first applies for and obtains loans for property, vehicles, etc. but intentionally defaults on them. Rather than allowing their credit report to reflect the defaulted loans, the perpetrator asserts that the initial loans were instances of identity theft. While the validity of the fraud claims is being checked, the perpetrator's negative credit history is temporarily removed from their credit report. This allows the perpetrator to take out more loans, which they will also intentionally default on.

Technical Surveillance

the practice of covertly acquiring audio, visual, or other types of data from targets through the use of technical devices, procedures, and techniques. When corporate spies resort to the use of technical surveillance, it is usually to gather nondocumentary evidence or information that cannot be found through open sources. Corporate spies might employ various forms of technological surveillance, such as aerial photography, bugging and wiretapping, video surveillance, photographic cameras, mobile phones, monitoring computer emanations, and computer system penetrations.

Experts in inquisitorial systems

the primary experts are obtained by the court. subject to various examinations and might have to conduct their own examinations of witnesses. Usually, all of the expert's activities related to the case are controlled by the judge, who determines the scope of the expert's analysis, the expert's authority to access certain items of evidence, whom the expert can interview, and several other functions. Because some jurisdictions allow parties to submit testimony or evidence from their own experts in addition to the court-appointed expert, the latter might need to interview the parties' experts. The expert should carefully follow the judge's instructions, especially since the instructions are usually made available to the parties

Chain of Custody

the primary reason for maintaining this on an item of evidence is to establish that the evidence has not been altered/changed. If evidence is subject to change over time or susceptible to alteration, the offering party might need to establish that the evidence hasn't been altered or changed from the time it was collected through its production in court. Can be an important factor in establishing authenticity. this is both a process & a document that memorializes (1) who has had possession of an object & (2) what they have done w/ it.

Trade-Based Money Laundering

the process of disguising the proceeds of crime and moving value through the use of trade transactions in an attempt to legitimize their illicit origins; generally involve importers and exporters who collude to misrepresent the price, quantity, or quality of imported or exported goods or services. These schemes can be used to create artificial profits for the purpose of laundering money between countries; to create a complex paper trail; and to avoid taxes, customs duties, and capital controls.

Arbitration

the process whereby a dispute is submitted to an impartial third person who then decides the outcome of the case (i.e., which party should win). The arbitrator acts as a judge or jury, deciding the case on its merits.

Cross-Examination

the questioning of one side's witness by the opposing side, and it is truly the highlight of the adversarial court system. Cross-examination, however, is uncommon in inquisitorial systems, although some civil law jurisdictions allow counsel for the parties to question witnesses in limited circumstances. Cross-examination is geared to allow opposing counsel or another questioning party either to clarify or to make points at the witness's expense. Questions during cross-examination might concern anything that might refute or embarrass the witness. During adversarial cross-examination, the witness's credibility will constantly be scrutinized. First, opposing counsel will seek to diminish the importance of the testimony presented by the witness. Second, opposing counsel will seek to have the witness testify in support of the opposing position by providing a series of assumptions. Third, opposing counsel will attack the witness's report or expert opinion (as applicable) to show the inadequacies, thereby discrediting the opinion, the report, and the witness. The opposing counsel can attack or question anything that has been said or entered into court. This includes notes, working papers, affidavits, reports, and preliminary trial or discovery transcripts. Often, cross-examination creates an atmosphere of confrontation and contradiction. Opposing counsel will generally not ask a question to which it does not already know the answer.

Exhibits in Common Law Systems

the tangible objects presented as evidence—are inadmissible unless they are relevant and established as authentic. Thus, to be admissible at trial, evidence, other than testimonial evidence, must be properly authenticated; that is, the party offering the item must produce some evidence to show it is, in fact, what the party says it is and to show it is in the same condition as when it was seized. If an exhibit can't be authenticated, it won't be admitted even if it's plainly relevant.

False Imprisonment

the unlawful restraint by one person of the physical liberty of another without consent or legal justification. There are no precise rules as to when a false imprisonment occurs, but factors such as the length, nature, and manner of the interview might determine whether liability arises.

single-family housing loan fraud scheme

unqualified borrowers misrepresent personal creditworthiness, overstate their ability to pay, and misrepresent characteristics of the housing unit to qualify for a loan. Such acts might include reporting inflated income, moving debt into a dependent's name, reporting inflated square footage of the collateral, or even bribing an appraiser to value the home at a higher amount than the market value.

Vishing

voice phishing, is the act of leveraging Voice over Internet Protocol (VoIP) in using the telephone system to falsely claim to be a legitimate enterprise in an attempt to scam users (both consumers and businesses) into disclosing personal information or executing an act that furthers a scheme. Government and financial institutions, as well as online auctions and their payment services, can be targets of voice phishing. generally transmitted as an incoming recorded telephone message that uses a spoofed (fraudulent) caller ID matching the identity of a misrepresented organization. The message uses an urgent pretext to direct unsuspecting users to another telephone number. The victim is invited to input their personal information using their telephone keypad. The criminals capture the key tones and convert them back to numerical format.

Structuring

when a deposit or other transfer is made using a method that is specifically designed to avoid regulatory reporting requirements or an institution's internal controls. The most common type of illegal structuring scheme in the money laundering context occurs when the launderer breaks up the illicit money into smaller amounts and deposits it into bank accounts or purchases cashier's checks, traveler's checks, or money orders. This type of scheme is sometimes known as smurfing, especially in cases where the launderer uses runners (i.e., smurfs) to perform multiple transactions. A red flag of a structuring scheme is a customer who attempts to make many deposits just under the reporting threshold.

Public disclosure of private facts

when one party makes public statements about another party's private life that are not of public concern. For instance, disclosing information obtained in an interview conducted as part of a fraud investigation to individuals not involved in the investigation might constitute public disclosure of private facts.

Deferred Prosecution Agreement

when prosecutors file criminal charges against a company, but then they agree not to prosecute the claims as long as the company successfully complies with the deferral agreement's terms. These requirements typically focus on getting the business to reform its policies and reduce the risk of illegal practices. Essentially, deferred prosecution agreements help companies avoid indictment, trial, and conviction while providing a jurisdiction's justice system with another channel for resolving a corporate case that punishes malfeasance and effectuates changes in a company's culture.

The commencement of a civil action begins:

when the plaintiff files a pleading with the appropriate court, usually in the jurisdiction in which the defendant resides or where the claim arose. The pleading sets out the complaint against the defendant and the remedy that the plaintiff is seeking. Depending on the practice and procedure of the court in which the action is commenced, such a document may be called a writ of summons, a statement of claim, a complaint, a declaration, a petition, or an application.