Acc 325 - Chapter 1

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Early days: criminal activity listed by:

Back 1

victim (people or property)

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Now: criminal activity can be classified by:

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motivation factors: passion or greed

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In text, we deal with crimes motivated by

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money

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Forensic accounting

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The application of accounting methods and financial techniques to assist in solving crimes

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The major goal of a financial investigator is to:

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identify and document specific events involving the movement of money during the course of a crime

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Records important to a financial investigation

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Any record that pertains to or shows the paper trail of events

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Law
(2)

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1. A formal means of social control
2. intended to guide or direct human behavior toward ends that satisfy the common good

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Categories of law
(3)

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1. common law
2. case law
3. substantive law (which includes criminal law and civil law)

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Common law

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1. system of law from England (used in American colonies)

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Case law

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1. the practice of judges and lawyers looking into decisions from past cases to determine the state of the law for the case they are currently handling

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Financial investigators are most interested in _____ law

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substantive

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Substantive law

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1. the body of law that creates, discovers, and defines the rights and obligations of each person in society
2. composed of statutes and ordinances enacted by Fed and state govs

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Criminal and civil laws are...

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derived from substantive law

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Criminal law

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Deals with offenses of a public nature (wrongs committed against the state)

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Civil law
(2)

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1. Deals with conflicts and differences between individuals
2. these private wrongdoings are called torts.

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Crimes can be:
(2)

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1. felonies
2. misdemeanors

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Felony

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1. serious crime punishable by incarceration for a period exceeding 1 year, a fine, and loss of certain civil rights (ex right to vote)

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Misdemeanor

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2. less serious crime and provide for incarceration periods of less than one year. Fines may also be imposed

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Crimes can also be classified by:

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1. mala in se
2. mala prohibita

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Mala in se

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Crimes that are evil or immoral in and of themselves (offenses against human conscience)
ex. murder, rape
*require proof of criminal intent

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Mala prohibita

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Offenses that are made criminal by statute but in and of themselves are not necessarily immoral
ex. traffice offenses
*do not require proof of criminal intent

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Elements of a crime

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Constituent parts that must be proved to sustain a conviction; that is, sufficient to make a prima facie case

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Prima facie case

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With a criminal violation, a prima facie case is proved when evidence has been presented that proves beyond a reasonable doubt the elements of the crime

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Codification

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The process of collecting and arranging laws by subject

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Bank fraud

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To defraud, or attempt to defraud, a federally chartered or insured bank

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Bankruptcy fraud

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OCcurs when assets are removed from a bankrupt entity (personal, business or corporate) and are then concealed from the court or the creditors

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Blackmail

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A demand for money or other considerations under threat to do bodily hard, to injure property, to accuse of crime, or to expose disgraceful defects

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Bribery

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Occurs when money, goods, services, info, or anything else of value is offered with the intent to influence the actions, opinions, or decisions of the taker

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Conspiracy

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1. Occurs when two or more people agree to join forces and carry out some illegal activity
2. at least one of the co-conspirators must have carried out one "overt act" in furtherance of the conspiracy

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Counterfeiting

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Occurs when someone copies or imitates an item without having been authorized to do so and passes the copy off for the genuine or original item

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Embezzlement

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Occurs when a person who has been entrusted with money or property appropriates it for his or her own use and benefit

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Extortion

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Occurs when one person illegally obtains property from another by actual or threatened force, fear, or violence, or under cover of official right.

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Kickback

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OCcurs when the person who sells an item pays back a portion of the purchase price to the buyer (or a public official)

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Forgery

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Occurs when a person passes a false or worthless instrument, such as a check or counterfeit security, with the intent to defraud or injure the recipient

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Fraud and false statements

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Fraud is a generic term embracing all the ways one person can falsely represent a fact to another in order to induce that person to surrender something of value

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Insider trading

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Occurs when a person uses "inside" or advance info to trade in shares of publicly held corporations

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Larceny

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Occurs when one person wrongfully takes another person's money or property with the intent to appropriate, convert, or steal it

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Mail fraud

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Any mailing which helps to advance the scheme to defraud in any significant way

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Money laundering

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The act of transforming or attempting to transform the proceeds of a criminal activity into useable funds that appear to originate from legitimate sources

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Racketeering

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Running an illegal business for personal profit

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Structuring

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This statute makes it illegal for an individual to attempt to structure transactions in such a way as to evade the reporting requirements

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Tax abuse and fraud includes:
(3)

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1. tax evasion
2. failing to file, supple info, or pay tax
3. filing a false or fraudulent return

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Tax evasion

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It is illegal for any person to avoid paying taxes that they, or the corp they represent, owe

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Failing to file, supply info, or pay tax

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1. If you are required to file a tax return, you must file it.
2. if you are required to keep records or supply info concerning taxes, you must keep the records or supply the info
3. if you are required to pay a tax, you must pay it

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Filing a false or fraudulent return

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If you sign a return that you know is not accurate, you're filing a fraudulent return

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Wire fraud

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Enacted to prevent someone from using tv, radio, or phone lines to defraud the public

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How a financial investigation assists law enforcement
(5)

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1. higher level cases with better jury appeal
2. better informants
3. more severe sentences
4. better search warrants
5. forfeited assets