Question 1

Obtaining blank checks is unnecessary if the fraudster can produce counterfeit
checks.

Accepted Answer

If the fraudster can produce counterfeit checks, there is no need for them to obtain blank checks, as they can create and manipulate their own fraudulent checks.

Question 2

Using an accomplice as the payee is one way to hamper detection of fraudulent payee schemes.

Accepted Answer

Using an accomplice as the payee can make it harder to detect fraudulent payee schemes as there may not be any obvious red flags when the payment is made. This method of fraud is often used to make it appear as though an legitimate payment has been made to someone who is not involved in the scheme. It is important to have strong internal controls and regular audits to detect and prevent fraudulent activities.

Question 3

An employee intercepts a blank check and forges the treasurer's signature to conceal that the check is payable to the employee. This is an example of a forged maker.

Accepted Answer

This is an example of a forged maker because the employee forged the signature of the treasurer, who is the maker of the check, to conceal that the check is payable to the employee.

Question 4

An employs purchases office supplies with his personal credit card and submits an inflated receipt for payment. This is an example of "pay and return".

Accepted Answer

This is not an example of "pay and return". It is an example of fraud or misrepresentation, where an employee is using their personal credit card and submitting an inflated receipt for reimbursement.

Question 5

An employee intercepts a legitimate check made payable to a vendor and changes the payee name to his name. This is an example of a forged maker.

Accepted Answer

This is an example of check fraud through payee alteration, not a forged maker. A forged maker would involve forging the signature of the person or entity that issued the check, not altering the payee name.

Question 6

Fraudulent endorsement schemes commonly involve the interception of a signed check before mailing.

Accepted Answer

Fraudulent endorsement schemes often involve intercepting a signed check before it is mailed in order to forge an endorsement and illegally cash the check.

Question 7

Shell companies require collusion amongst employees in order to be successful.

Accepted Answer

Shell companies can be created and operated by a single individual without the need for collusion amongst multiple employees. They are often established for legitimate purposes, such as holding assets or managing transactions, but can also be used for illicit activities.

Question 8

Fraudulent disbursements are commonly made to a fictitious payee.

Accepted Answer

Fraudulent disbursements often involve payments made to a company or person who does not actually exist, also known as a fictitious payee.

Question 9

"Rubberstamping," in shell company situations means that a rubber stamp
is used for signatory purposes.

Accepted Answer

"Rubberstamping" in the context of shell companies refers to the practice of automatically approving decisions or transactions without proper review or due diligence, not the literal use of a rubber stamp for signatures.

Question 10

Overpayment of a vendor invoice is one example of a "pay and return" scheme.

Accepted Answer

Overpayment of a vendor invoice is a type of pay and return scheme where the fraudster intentionally overpays the vendor and then requests a refund of the excess amount, which is then pocketed by the fraudster.

Question 11

If a check is made payable to cash, detection of the fraudster is made more difficult.

Accepted Answer

When a check is made payable to cash, anyone can cash it, regardless of whether they are the intended recipient or not. This makes it difficult to trace who committed the fraud.

Question 12

In order to be successful, a fraudulent scheme must intercept checks before they are signed.

Accepted Answer

A fraudulent scheme can intercept checks after they are signed and still be successful with techniques such as altering the payee or amount, forging signatures, or creating counterfeit checks.

Question 13

Using an accomplice as the payee is one way to hamper detection of fraudulent maker schemes.

Accepted Answer

The answer of Using an accomplice as the payee is...

Question 14

A pass-through scheme requires the use of a legitimate vendor.

Accepted Answer

A pass-through scheme involves invoicing a victim company for goods or services that were legitimately provided by a vendor, but then the payment is actually made to a fraudulent entity. So, a legitimate vendor is required in this type of scheme.

Question 15

A check issued to an employee for duplicate expense receipts is not a fraudulent disbursement since it involves legitimate documentation.

Accepted Answer

Even if the documentation appears legitimate, issuing a check for duplicate expense receipts is considered fraudulent because it involves paying out funds inappropriately for expenses that were not actually incurred or are being claimed more than once.

Question 16

Fraudulent endorsement requires use of a facsimile signature stamp.

Accepted Answer

Fraudulent endorsement can occur through various means, not just the use of a facsimile signature stamp. It can involve forging a signature, altering a check, or endorsing a check without authorization.

Question 17

In order for a "pay and return" scheme to work, vendors must be an accomplice.

Accepted Answer

A "pay and return" scheme can be executed by an employee without vendor involvement, by falsely claiming that goods were returned for a refund and pocketing the money.

Question 18

Ghost employees are employees that physically exist but are not on the payroll records.

Accepted Answer

Ghost employees are fictitious individuals on the payroll records who do not actually work for the company, allowing fraudsters to divert funds by cashing the paychecks of these non-existent workers.

Question 19

Ghost employees are usually paid in cash.

Accepted Answer

Ghost employees are fictitious or non-existent employees on a company's payroll, and they can be paid through direct deposit or checks, not necessarily in cash, to make the fraud less detectable.

Question 20

"Kickback" schemes involve the vendor as an accomplice.

Accepted Answer

Kickback schemes involve the vendor as a willing participant who offers illicit payments or rewards in exchange for favorable treatment.

Quiz 12: Cash Disbursement Schemes

Obtaining blank checks is unnecessary if the fraudster can produce counterfeit checks.