CFE Evidence and Legal Systems 3 — Questions and Answers
Question 1: When a fraud examiner testifies as an expert witness, which of the following standards does a federal court use to evaluate the admissibility of expert testimony?
- Frye Standard only
- Daubert Standard (Correct answer)
- Kumho Standard exclusively
- Both Daubert and Frye equally
Correct answer: Daubert Standard
Federal courts apply the Daubert standard (FRE 702), under which the judge acts as a gatekeeper to ensure expert testimony is based on sufficient facts, reliable methodology, and is relevant to the case.
Question 2: Which of the following describes a 'subpoena duces tecum'?
- An order compelling a witness to testify at a deposition
- A court order requiring production of documents or other tangible evidence (Correct answer)
- A warrant authorizing law enforcement to search premises
- A formal accusation issued by a grand jury
Correct answer: A court order requiring production of documents or other tangible evidence
A subpoena duces tecum commands the recipient to produce specified documents, records, or other tangible items for use in legal proceedings.
Question 3: In the U.S. legal system, which court has original jurisdiction over federal criminal fraud cases?
- U.S. Court of Appeals
- U.S. District Court (Correct answer)
- U.S. Bankruptcy Court
- U.S. Tax Court
Correct answer: U.S. District Court
U.S. District Courts are the trial courts of the federal system and have original jurisdiction over federal criminal matters, including wire fraud, bank fraud, and securities fraud.
Question 4: What is the primary purpose of a grand jury in a federal fraud investigation?
- To determine guilt or innocence at trial
- To decide whether probable cause exists to indict a suspect (Correct answer)
- To sentence convicted defendants
- To hear appeals from lower court decisions
Correct answer: To decide whether probable cause exists to indict a suspect
A grand jury reviews evidence presented by prosecutors and determines whether probable cause exists to formally charge (indict) a suspect with a crime.
Question 5: Which Fifth Amendment protection can a witness invoke to refuse answering questions that might incriminate themselves during a fraud investigation?
- Right to counsel
- Privilege against self-incrimination (Correct answer)
- Right to confrontation
- Protection against double jeopardy
Correct answer: Privilege against self-incrimination
The Fifth Amendment privilege against self-incrimination allows individuals to refuse to answer questions when their responses could expose them to criminal liability.
Question 6: A fraud examiner working an internal investigation interviews an employee suspected of embezzlement. What Miranda warning consideration applies in this scenario?
- Miranda warnings are always required before any fraud interview
- Miranda warnings are only required when government agents conduct custodial interrogations (Correct answer)
- Miranda warnings must be given by all certified fraud examiners
- Miranda warnings are required whenever the suspect denies wrongdoing
Correct answer: Miranda warnings are only required when government agents conduct custodial interrogations
Miranda warnings are constitutionally required only when government (law enforcement) agents conduct custodial interrogations; private investigators and corporate fraud examiners are not bound by this requirement.
Question 7: What is 'spoliation of evidence' in the context of a fraud investigation?
- Deliberately fabricating documents to support a fraud scheme
- The intentional or negligent destruction or alteration of relevant evidence (Correct answer)
- Sharing confidential evidence with unauthorized third parties
- Introducing evidence obtained without proper authentication
Correct answer: The intentional or negligent destruction or alteration of relevant evidence
Spoliation occurs when a party destroys, alters, or fails to preserve evidence relevant to litigation, which can result in adverse inference instructions, sanctions, or case dismissal.
CFE Evidence and Legal Systems 3
When a fraud examiner testifies as an expert witness, which of the following standards does a federal court use to evaluate the admissibility of expert testimony?