ACFE Law 5 — Questions and Answers
Question 1: Under the Federal Sentencing Guidelines, organizational defendants may reduce their culpability score by demonstrating:
- That the CEO had no knowledge of the offense
- The existence of an effective compliance and ethics program (Correct answer)
- That the company self-insured against fraud losses
- That the offense involved less than $500,000 in harm
Correct answer: The existence of an effective compliance and ethics program
Organizations can reduce their culpability multiplier under the Federal Sentencing Guidelines by showing they had an effective compliance and ethics program in place at the time of the offense.
Question 2: The legal doctrine of 'respondeat superior' holds that:
- A superior court's ruling supersedes a lower court's decision
- An employer is vicariously liable for torts committed by employees within the scope of employment (Correct answer)
- Corporate officers must respond to all government inquiries personally
- Judges must defer to agency interpretations of their own regulations
Correct answer: An employer is vicariously liable for torts committed by employees within the scope of employment
Respondeat superior is a doctrine of vicarious liability under which employers are held responsible for the wrongful acts of their employees committed during the course and scope of employment.
Question 3: Which standard governs whether a search conducted by a private party (non-government actor) is subject to Fourth Amendment restrictions?
- The totality of the circumstances test
- The Fourth Amendment does not apply to purely private searches (Correct answer)
- The reasonable expectation of privacy test always applies
- Private searches require a warrant if they involve electronic devices
Correct answer: The Fourth Amendment does not apply to purely private searches
The Fourth Amendment protects against unreasonable government searches; it does not apply to searches conducted by private parties acting independently and not at the direction of law enforcement.
Question 4: A deferred prosecution agreement (DPA) between a corporation and the DOJ typically requires the corporation to:
- Plead guilty to all charged offenses before the agreement takes effect
- Admit to factual allegations, pay penalties, and implement compliance reforms while prosecution is suspended (Correct answer)
- Dismiss all employees involved in the underlying conduct
- Waive all attorney-client privilege permanently
Correct answer: Admit to factual allegations, pay penalties, and implement compliance reforms while prosecution is suspended
Under a DPA, prosecution is deferred while the company agrees to cooperate, pay financial penalties, accept compliance monitors if required, and remediate the conduct—with charges dismissed upon successful completion.
Question 5: Under the Uniform Commercial Code (UCC), which of the following constitutes 'fraud in the factum' that renders a negotiable instrument void (not merely voidable)?
- A signer who was induced by misrepresentations about the value of goods
- A signer who was deceived about the very nature of the instrument being signed (Correct answer)
- A signer who was under economic duress when executing the instrument
- A signer who lacked full contractual capacity at the time of signing
Correct answer: A signer who was deceived about the very nature of the instrument being signed
Fraud in the factum occurs when a party is deceived about the nature of the instrument itself (e.g., told they are signing a receipt when signing a promissory note), making the instrument void and unenforceable even against a holder in due course.
Question 6: Which element distinguishes larceny by trick from obtaining property by false pretenses?
- The value of the property taken
- Whether possession alone or both title and possession were obtained through deception (Correct answer)
- Whether the victim was a business or individual
- Whether the offender used written or verbal misrepresentations
Correct answer: Whether possession alone or both title and possession were obtained through deception
In larceny by trick, only possession is transferred through deception; in false pretenses, both title and possession are transferred, making the distinction legally significant for charging purposes.
Question 7: Under the Electronic Communications Privacy Act (ECPA), a 'pen register' captures:
- The content of telephone conversations
- The dialing, routing, addressing, and signaling information of communications but not content (Correct answer)
- All data transmitted over a network connection
- The identity of all parties to a communication
Correct answer: The dialing, routing, addressing, and signaling information of communications but not content
A pen register records outgoing dialing, routing, addressing, and signaling information but is legally prohibited from capturing the content of any communication.
ACFE Law 5
Under the Federal Sentencing Guidelines, organizational defendants may reduce their culpability score by demonstrating: