Ch. 7 Bank: Business Crime
Under the Federal Computer Fraud and Abuse Act, unauthorized access to government computers is a felony.
True
Voluntary reporting of criminal violations reduces a company's fines under the federal sentencing guidelines.
True
Bond or bail is established at the initial appearance.
True
Corporate managers have the right to remain silent when questioned about criminal matters.
True
Corporate officers cannot invoke the Fifth Amendment for a corporation.
True
Embezzlement is theft by an employee.
True
For document destruction under SOX, the potential penalty is 20 years in prison and fines.
True
Fourth Amendment rights still apply on the Internet.
True
Involvement of the top officers in corporate crimes increases the penalty under the U.S. sentencing guidelines.
True
Mens rea can be established without a confession.
True
Mens rea is the particular mental state required to establish a crime.
True
Monitors are often required by the Justice Department as part of a settlement of charges of corporate violations of criminal law.
True
RICO applies only to repeat offenders.
True
RICO is a federal criminal statute.
True
Racketeering acts under RICO include theft, burglary, and arson.
True
SOX is the shorthand for the Sarbanes-Oxley business crime legislation.
True
Some existing criminal statutes apply to activity over the Internet, such as statutes that prohibit money laundering.
True
State anti-spamming statutes are tied to the volume of messages.
True
Tapping into federal income tax returns to get information is a violation of the Counterfeit Access Device and Computer Fraud Act.
True
The Anti-Spam Technical Alliance is an industry group working to fight spam.
True
The Dodd-Frank Wall Street Reform and Consumer Protection Act is also known as the Financial Services Reform Act.
True
The Economic Espionage Act makes it a crime to take trade secrets by computer.
True
The Sixth Amendment is the right-to-speedy trial amendment.
True
The USA Patriot Act requires those handling large sums of cash to verify the sources of those funds.
True
The collapses of Enron, WorldCom, Adelphia and other companies in 2001-2002 led to Congress passing the Sarbanes-Oxley Act.
True
The defendant enters his/her plea at the arraignment.
True
The exceptions for obtaining warrants include evidence in "plain view."
True
The failure to follow crime prevention programs can result in harsher sentences under the U.S. corporate sentencing guidelines.
True
The key to imposing criminal liability on a company's employees is proving their active involvement or their actual knowledge of wrongdoing.
True
The transfer of copyrighted material worth over $1000 over the Internet is a crime.
True
The white-collar kingpin statute imposes mandatory sentences on the executives who mastermind criminal activity.
True
Under RICO, business owners can be criminally liable for violations even though they were not directly running the business.
True
Warrants are not required in cyberspace.
False
An indictment is: a. a document issued by the grand jury. b. issued after a preliminary hearing. c. followed by an information. d. none of the above
A
Ann McMillan is a CPA with a public accounting firm. A client of Ann's has called to tell her that the SEC is investigating the company for possible misrepresentations in the company's financial reports. Ann is worried that she may have pushed the envelope in allowing some of the revenues of the client to be reported as they were. Ann shreds several sets of notes from her meetings with the client on revenue recognition. Ann a. is probably guilty of obstruction of justice. b. has done nothing wrong because the notes are privileged communication the SEC is not entitled to have. c. has not committed obstruction of justice because the SEC has not contacted her. d. none of the above
A
Most RICO charges involve: a. mail fraud, wire fraud or securities fraud. b. organized crime. c. wage tax violations. d. individuals and not companies.
A
The Fifth Amendment: a. affords protection against self-incrimination. b. can be used by a corporation. c. can be used by officers to prevent disclosure of corporate records. d. none of the above
A
The Fourth Amendment protections: a. apply to individuals. b. do not apply to corporations. c. do not apply to corporate officers. d. all of the above
A
The Fourth Amendment: a. is the privacy protection amendment. b. provides the right for a jury trial. c. provides the protection against self-incrimination. d. none of the above
A
The mens rea required for theft is: a. intent to take the property permanently. b. intent to borrow the property. c. general intent to commit a crime. d. none - strict liability crime. e. none of the above
A
This Act prohibits circumventing encryption of copyrighted works for unauthorized copying. a. DMCA b. CADCFA c. CFAA d. RICO
A
Which of the following is not a requirement of mens rea? a. a specific act b. the state of mind required for the crime c. the intent to deprive d. All of the above are required for mens rea.
A
At which of the following procedures may a defendant present evidence? a. initial appearance b. trial c. grand jury d. appeal
B
Exceptions to the warrant requirement include: a. RICO violations. b. plain view doctrine. c. no available magistrate. d. records under the FCPA.
B
If a judge requires a guilty defendant to run a newspaper ad stating the defendant is guilty of certain crimes, this is an example of a _____ punishment. a. community service b. shame c. blatant d. public
B
In criminal procedure, the initial appearance: a. is the preliminary hearing. b. is where bail is set. c. follows the grand jury proceedings. d. is where a plea is entered.
B
In order to establish criminal liability of the directors of a corporation: a. a prosecutor need only establish that the corporation committed a crime. b. a prosecutor must establish that the directors had criminal intent. c. the corporation is liable for criminal acts but the directors are not liable. d. none of the above
B
Jason Ormand was arrested on suspicion of sexual assault. The arresting officers did not give Jason his Miranda warnings. Jason confesses to the assault. The DNA evidence taken from the victim shows with 99% certainty that Jason was her attacker. a. Because of the violation of Jason's rights in the officers' failure to give the Miranda warnings, the case must be dismissed. b. The case can still proceed with the DNA evidence. c. The case can proceed but only with the victim's testimony. d. none of the above
B
Joan owns a citrus tree farm near Mesa, Arizona. Joan and her family have fertilized the trees each spring for 52 years. The irrigation for the trees carries the fertilizer remnants into the Salt River. When EPA investigators discover the fertilizer in the Salt River and trace the unique brand to Joan, they indict her for violation of the Clean Water Act, for the discharge of a substance into a waterway. Joan responds, "I didn't know there was fertilizer. I was just letting water flow." a. Joan has sufficient mens rea for the crime. b. Joan can rely on the Ahmad case and escape criminal liability. c. Joan can be held criminally liable for negligence. d. none of the above
B
The "Know Thy Customer" program: a. is a federal program directed at commercial bribery prevention. b. is a federal program related to detecting money laundering. c. is an unconstitutional federal program. d. both a and c
B
The CAN-SPAM Act: a. is part of Sarbanes-Oxley. b. allows companies to bring suit against spammers for their unauthorized use of their servers. c. has been declared unconstitutional. d. none of the above
B
The Economic Espionage Act covers: a. only international commercial transactions. b. the copying, downloading or electronic transfer of trade secrets. c. bribes to obtain government contracts. d. only national stock exchange companies.
B
The Miranda warnings: a. must be given or the case is dismissed. b. are based on Fifth Amendment rights. c. are based on Fourth Amendment rights. d. none of the above
B
The No Electronic Theft Act: a. prohibits the use of the Internet for personal e-mail on company time. b. prohibits the transfer of copyrighted material worth over $1,000 over the Internet. c. prohibits economic espionage. d. resulted from the V olkswagen/GM espionage case.
B
The USA Patriot Act: a. has been declared unconstitutional. b. expanded the Money Laundering Control Act. c. applies only to banks. d. none of the above
B
The purpose of an arraignment is to: a. issue an indictment against the defendant. b. set the trial date. c. provide the defendant with the opportunity to appear before the grand jury. d. ensure that the Miranda warnings are given.
B
The purpose of the initial appearance is to: a. issue an indictment against the defendant. b. set the terms of release (if any). c. allow the judge to issue an information. d. provide the defendant with the opportunity to appear before the grand jury.
B
When judges are determining sentences for defendants under the Federal Sentencing Guidelines, any facts other than the defendant's prior conviction must be established by a jury beyond a reasonable doubt; this ruling happened in the famous case of the United States v. _____. a. Park b. Booker c. Ahmad d. Kyllo
B
Which act makes it a crime to willfully infringe copyrighted materials via electronic means that worth more than $1,000? a. The Digital Millennium Copyright Act b. The No Electronic Theft Act c. The Economic Espionage Act d. There is no criminal statute for electronic infringement; it is a civil matter only.
B
Which is not covered under the Computer Access Device and Computer Fraud and Abuse Act (CADCFA)? a. unauthorized use of federal computers b. typewriters c. use in excess of authority by a federal employee d. consumer financial records e. All of the above are covered.
B
Which is/are the most common basis for RICO violations? a. embezzlement, narcotics, pornography b. mail fraud, wire fraud and securities fraud c. interstate transportation of stolen goods and gambling d. none of the above
B
Which of the following would mitigate an officer's or corporation's sentence under the corporate sentencing guidelines? a. officer had no direct knowledge; he/she was only the supervising manager b. the company had an ethics training program c. subordinates failed to follow orders d. subordinates were demoted for questioning decisions
B
"Taking the Fifth" means: a. refusing to allow a search of your office. b. refusing to turn over corporate documents. c. refusing to testify to prevent self-incrimination. d. demanding a search warrant.
C
Bernie Ebbers, the former CEO of WorldCom, on trial for securities fraud and other crimes, offered as his defense that he did not know what his officers were doing. a. Ebbers' defense is a valid one because there is no intent. b. Ebbers' defense is a valid one because there is no actus reus. c. Ebbers can be held liable for the actions of employees. d. both a and b
C
Internet credit card fraud is covered under which of these acts? a. EEA b. DMCA c. EFTA d. CFAA
C
RICO applies to: a. only interstate businesses. b. officers but not directors. c. buyers of businesses. d. all criminal activity. e. none of the above
C
Some communications and work product from those communications, for example between a lawyer and a client, are not allowed (generally) to be divulged. This is known as a: a. protection. b. sacrosanct communication. c. privilege. d. policy.
C
The FBI has developed new technology that enables it to listen to conversations in homes from vans parked in the street outside the homes. While listening to conversations in one neighborhood, the FBI uncovers a meth lab. Agents move in and arrest those in the home without a warrant. Under the Kyllo case: a. the FBI is not required to have a warrant because the information was uncovered without invading the house. b. the FBI is not required to have a warrant because the information was uncovered from outside the private property of the individuals involved. c. the FBI is required to have a warrant in order to listen to the conversations. d. the FBI needs a warrant to listen only if it is going to arrest someone. e. none of the above
C
The failure to give the Miranda warnings: a. is a problem only if the defendant is in jail. b. will result in a dismissal of all charges. c. is a problem only if the defendant is in custody. d. none of the above
C
The key to personal liability for business crimes is: a. your job title. b. corporate board membership. c. personal knowledge of wrongdoing. d. a gray area that is too uncertain to be prosecuted at this time.
C
The purpose of an omnibus hearing is to: a. issue an indictment. b. issue an information. c. hear evidentiary challenges. d. have the defendant enter a plea.
C
Under Sarbanes-Oxley, auditors must retain their work papers: a. for one year. b. for three years. c. for five years. d. until they no longer represent a client.
C
What is the distinction between theft and embezzlement? a. the mens rea is different b. the amount taken c. the entrustment of the property d. They are the same crime.
C
Which is the new crime created by Sarbanes-Oxley? a. mail fraud b. obstruction of justice c. certification of false financial statements d. both a and b
C
Which of the following is not an element of criminal fraud? a. a false material statement b. reliance by the buyer c. a mistake by the seller or the intent to mislead d. All of the above are elements.
C
Which of the following is not an exception to the Fourth Amendment search warrant requirement? a. a search of a burning building b. a search of an area in plain view c. an inspection of a factory for safety violations d. All of the above are exceptions to the warrant requirement.
C
Because of the rise in business crimes, what job has been referred to as "the most secure job in America"? a. Chairman of Board b. President of a company c. Lawyer d. Forensic accountant
D
Dennis Kozlowski was the former CEO of Tyco who was charged with larceny, otherwise known as embezzlement. During his trial, Mr. Kozlowski offered testimony that all of his loans from the company that were not repaid were authorized loans that had been forgiven by the board of directors. The testimony about the board's approval: a. shows a lack of mens rea on Kozlowski's part. b. shows he did not have the actus reus of taking something that did not belong to him. c. is irrelevant because the money belonged to the corporation. d. both a and b
D
Mens rea is: a. the actual criminal act. b. not required for proof of a crime. c. only required for common-law crimes. d. none of the above
D
Officer Muldoon is on foot patrol in Tempe, Arizona when he looks inside a garage (the garage door is open) and sees a statue that he knows is a rare art work that was stolen the night before from a building downtown. Officer Muldoon: a. cannot use the sighting as a basis for a warrant. b. cannot enter the premises to recover the statute. c. is not permitted to look inside the garage from the street even when the door is open. d. none of the above
D
Penalties for corporate officers under Sarbanes-Oxley include: a. 5-20 years for mail and wire fraud. b. 1-10 years for violation of fiduciary duties. c. a maximum penalty of $5,000. d. both a and b
D
Racketeering acts under RICO include: a. gambling. b. bribery. c. extortion. d. all of the above
D
The Fifth Amendment protections: a. apply to corporations. b. can be used by officers of a corporation to prevent disclosure of corporate records. c. can be used by officers of a corporation to prevent disclosure of corporate records that incriminate them. d. none of the above
D
The doctrine that states that an executive cannot knowingly try to avoid learning about actions of those within the company is known as: a. the Ebbers evasion. b. Enron avoidance. c. the Fastow facade. d. conscious avoidance.
D
The penalty for document destruction under Sarbanes-Oxley is: a. five years. b. ten years. c. fifteen years. d. twenty years.
D
Which of the following is a violation of the Economic Espionage Act? a. Downloading your employer's website program to take to your new job. b. Sketching your employer's new trademark to register first. c. Photographing customer lists of a competitor. d. All of the above are EEA violations.
D
Which of the following is not an element of the crime of embezzlement? a. intent to take property b. taking property permanently c. no authorization to take the property d. All of the above are elements of embezzlement.
D
Which of the following laws require businesses to report cash transactions involving $10,000 or more? a. Bank Secrecy Act b. USA Patriot Act c. Money Laundering Control Act d. all of the above
D
Which of the following will reduce a corporation's sentence under the U.S. Sentencing Guidelines? a. having a code of ethics b. having ethics training c. having ethics hotline d. All of these can reduce a corporation's sentence.
D
Which of the following would be a federal crime? a. copying FDIC data without authorization b. changing figures on military invoices without authorization c. placing a virus on a federal computer system d. All of the above are federal crimes.
D
Which of the following would be the crime of obstruction of justice? a. making a false entry b. certification of financial statements c. destroying e-mails d. both a and c
D
Which of the following is not a computer crime? a. unauthorized use of computer equipment b. alteration or destruction of computer files c. entering fraudulent data d. using computers to convert data e. All of the above are computer crimes.
E
A corporation cannot be indicted for criminal charges.
False
A grand jury is comprised of judges.
False
A grand jury issues an information.
False
A preliminary hearing is the same proceeding as an arraignment.
False
A preliminary hearing requires that the defendant take the stand.
False
A virus is not a trespass under the Federal Computer Fraud and Abuse Act.
False
All 50 states have passed cyberbullying statutes that make taunting or hate crimes a felony when using the Internet.
False
An employee who is following orders cannot be held liable for any criminal charges that result from that conduct.
False
Bribery is an ethical violation, but is not a crime.
False
Commercial bribery is only criminal for the recipient.
False
Conscious avoidance is a valid defense.
False
Corporate integrity agreements are treated as an admission of guilt.
False
Corporate officers are not liable for acts delegated to subordinates.
False
Criminal fraud is the same as contract fraud.
False
Directors are liable for a crime if the corporation is found guilty of the crime.
False
Employee theft is usually a one-time event because the employee is usually too afraid of getting caught to steal more than once.
False
Mens rea is not a required element of a crime.
False
Mens rea is the conduct required for a crime.
False
Plea bargaining is done only before the arraignment.
False
Probable cause is required only for warrantless searches.
False
RICO applies only to corporations.
False
Servers are always required to reveal the identity of their customers and users.
False
Some crimes do not carry a mens rea requirement.
False
The Counterfeit Access Device and Computer Fraud and Abuse Act applies only to federal employees.
False
The Fourth Amendment is the Miranda warning amendment.
False
The Fourth Amendment privacy protections do not apply to business records.
False
The Sixth Amendment is designed to ensure a speedy trial.
False
The White-Collar Criminal Penalty Act of 2002 is known as the King Pin Act.
False
The omnibus hearing is held before the preliminary hearing.
False
Under CADCFA, access to institutional financial information is not a violation.
False
"Know Thy Customer" is a training program for employees on preventing money laundering.
True
"Taking the Fifth" refers to the Fifth Amendment protection against self-incrimination.
True