Examples of a lifestyle indicator that may suggest a subject is living beyond his apparent means.
Subject carries a large amount of cash, owns valuable art or owns luxury cars.
General statements about an investigative plan.
Should establish the objective of the investigation, should contain an estimated timeline for completion, and should designate the roles and tasks of those involved in the investigation.
It is a matter that will likely affect the scope of the investigation.
Key issues involved in the investigation, the goals of the investigation and the period over which the investigation is relevant.
Information that should be included in the subject profile of an investigation's target includes:
The names and birthdates of the target's immediate relatives. It should contain all basic information related to the target.
Elements that make up the personal profile:
Financial profile and behavioral profile.
Least likely to be revealed by developing a financial profile:
One-time payment for a medical bill. It will not catch smaller currency transactions. Particularly those that are consumables or one time expenses.
Steps in the process used to prepare a financial profile for a suspect:
Identifying the assets held by the person, identifying his significant liabilities, identifying his income sources and identifying the expenses incurred by the subject during the relevant period.
An indirect way to establish a subject's financial standing and profile:
Interviews with the person.
The financial profiles shows what the subject:
Earns, owns, owes and spends at any given point or over a period of time.
The business profile should contain:
Information about key personnel associated with the subject business.
When calculating a subject's net worth,
Cash on hand is the most important asset to establish.
Refers to the search for evidence showing what has happened to property, identifying the proceeds of property, and identifying those who have handled or received property or the proceeds of property.
Signatory cards usually contain:
The name of the person opening the account, the identifying number of the person opening the account, and the amount of the opening account.
To open a corporation account, the opening party must provide:
A signature card and copies of corporate resolutions of the board of directors authorizing the opening of the account and the name of the person authorized to draw checks on the account.
Canceled checks written on a subjects account can reveal:
Other bank accounts owned by the subject.
Canceled, or negotiated checks, are:
Checks that are cleared by a bank or other financial institution.
Cancelled checks can show what the subject has purchased and MAY also show:
The location of that asset, such as real property.
Safe deposit records generally will show:
The name of people who have access to the safe deposit, identify the people who entered the safe deposit box and contain the signatures of the people who entered the safe deposit box.
Records pertaining to brokerage accounts include:
Customer account cards, which will include a record of all transactions conducted for the customer.
Although account statements from banks contain important information, they do not:
Contain the account holders SS number or DOB.
IRS form that collects information about the taxpayer's dependents, income items, and adjustments to income, and calculates deductions, credits, and the total tax amount owed.
Illicit funds are drawn from the payer's regular, known bank accounts and recorded on the books and records in a disguised manner as some sort of legitimate trade payable.
Three forms of on-book schemes:
Fictitious payable schemes, fictitious employee schemes, and over billing schemes.
Schemes in which the funds are usually generated by some sort of unrecorded sale or by failing to record expenses or legitimate rebates from suppliers. Often used in businesses that have significant cash sales, such as bars and restaurants.
Off-book schemes are usually proven at:
Point of receipt.
On-book schemes are usually proven at
Point of sale.
Analyzes the relationships between the items on an income statement, balance sheet, or state of cash flows by expressing components as percentages.
Three types of financial statement analysis:
Vertical, horizontal and ratio analysis.
Analyzes the percentage change in an individual financial statement from one period to the next.
Three steps of indirect methods of proof:
Net worth analysis, sources and applications of funds (expenditures method) and bank deposit analysis.
Fictitious employee is an example of an:
Overbilling schemes are on-book schemes that:
Require the assistance of a third person. The payer adds an illegal payment to a legitimate bill and the receiver sends the excess back.
When looking for fictitious payable schemes, what is generally the best starting point?
Analyze cash receipts and disbursement journals, as well as ledger accounts for unusual activity.
Bank deposit analysis is an example of:
Regulates the dissemination of consumer information to third parties by consumer reporting agencies.
Examples of non-public records:
Banking records, tax returns, telephone records, credit card account and credit reporting agency records.
Governs access to the availability of governmental records:
Freedom of Information Act.
FOIA provides access to:
Tax rolls, voter registration, assumed names, real property records and divorce/probate suits.
GLBA made it a criminal offense to engage in:
Divorce court records can be noteworthy source of financial information because:
they might contain information relating to bank accounts, employment and other sources of income.
Most states require a DBA filing for:
Limited partnerships, trusts and joint ventures.
UCC filings will not show:
The amount of debt incurred by the debtor.
A list of real property owned by the filing party is typically contained in:
A bankruptcy file.
Liquid assets are hidden:
More frequently than illiquid assets.
The most basic way to hide assets and occurs when a person stores assets in a hidden location, usually in his home or on his property:
Smurfing or structuring:
Evading currency requirements by breaking down a large transaction into a number of smaller ones.
Negotiable instruments can be used to cover illicit proceeds because:
They can be exchanged almost anywhere in the world, the reduce the amount of currency a person has to carry and they can disguise an individuals financial dealings.
It is an option for a subject who wants to transfer funds electronically between two unrelated banks that do not have a correspondent relationship:
CHIPS, Clearinghouse for Interbank Payments System.
Piercing the corporate veil:
The separate personality of a corporation may be disregarded if it is used for fraudulent or illegal purposes or to escape the faithful compliance of an obligation.
Fraudulent transfer is:
An asset transfer that a debtor makes to try to defeat a creditor's efforts to collect against the asset.
Three stages of money laundering:
Placement, layering and integration.
Why is it more difficult for a highly competitive business to attract direct criminal involvement than a less competitive business?
It is difficult to run both a demanding business and a demanding criminal network at the same time.
Why are casinos vulnerable to money laundering operations?
Because of the fast paced nature of their games and the fact that they provided nearly identical financial services as a bank.
An advantage of using the cash transaction system would be:
It makes it difficult to connect a person with criminal activity or with the purchase of illicit goods or services.
The business transaction system relies on _____ instruments for effective transactions.
Non-cash, such as checks.
A laundering technique in which a launderer seeks to disguise the illicit transfer of money in business records by parking excess cash in a company's bank account:
Balance sheet laundering.
_______ refers to methods of transferring funds from a party at one location to another party without the use of formal banking institutions:
Alternative remittance systems.
The Patriot Act requires financial institutions to implement programs designed to verify the identity of a person seeking to open an account. These programs are called________?