FBI FBI Financial Crimes and Money Laundering 2

Question 1

What is the defining characteristic of a Ponzi scheme?

Accepted Answer

Paying returns to earlier investors using capital from newer investors rather than actual profits

Answer

Using investor funds to buy undervalued real estate that is resold at inflated prices

Answer

Manipulating stock prices through coordinated buying and selling by insiders

Answer

Laundering criminal proceeds through legitimate business revenue streams

Question 2

How does a 'pump and dump' securities fraud scheme operate?

Accepted Answer

Inflating a stock's price through false promotional statements, then selling shares at the peak before the price collapses

Answer

Artificially deflating a competitor's stock price to acquire the company at a discount

Answer

Illegally using insider information to trade shares before a public corporate announcement

Answer

Manipulating commodities futures contracts through coordinated trading activity

Question 3

How does the FBI distinguish 'mortgage fraud for profit' from 'mortgage fraud for housing'?

Accepted Answer

Industry insiders conspiring to steal equity or obtain fraudulent loans versus borrowers misrepresenting information to qualify for a loan

Answer

Fraud involving commercial properties versus residential properties

Answer

Fraud committed by real estate professionals versus fraud committed by homebuyers

Answer

Federal mortgage fraud prosecutions versus state-level mortgage fraud cases

Question 4

What is 'wire fraud' under 18 U.S.C. § 1343, and what must prosecutors prove?

Accepted Answer

A scheme to defraud using interstate wire communications such as phone, internet, or television

Answer

Unauthorized electronic hacking of financial computer systems to steal money

Answer

Fraudulent transfer of funds between bank accounts using wire transfer protocols

Answer

Interception of electronic communications to obtain financial account credentials

Question 5

What is a 'bust-out' fraud scheme?

Accepted Answer

Establishing credit, maximizing credit lines through purchases or cash advances, then defaulting without payment

Answer

Breaking into retail stores to steal credit card processing terminals

Answer

Using stolen credit cards to purchase electronics that are quickly resold for cash

Answer

Installing skimming devices on ATMs to clone credit card information

Question 6

What is 'advance fee fraud' (commonly known as a 419 scheme)?

Accepted Answer

Tricking victims into paying fees in advance for a promised large financial reward that never materializes

Answer

Illegally charging upfront fees for financial services regulated by federal law

Answer

Requiring illegal deposits before providing fraudulent loan approvals

Answer

Collecting application fees for non-existent employment opportunities

Question 7

Why does the FBI classify elder financial fraud as a priority investigation area?

Accepted Answer

Elderly individuals often have significant accumulated savings, may be cognitively vulnerable, and frequently underreport victimization

Answer

Federal law mandates minimum prosecution quotas for elder fraud cases

Answer

Elder fraud cases typically involve larger dollar amounts than other financial crimes

Answer

International treaties require member nations to prioritize elder financial crime prosecution