Advanced Forensic Accounting -ACC 465 UNIT 3 Dr. Doug Letsch I am online waiting for the live session to begin. If you have a general question, please ask it in the chat window. The only talking you will here is when I welcome someone who has just signed in. If you don’t hear me welcoming everyone, please adjust your speakers. Let me know if you have problems. Thanks, Dr. Doug

Cleanup WP Problem Review Chapter 4 Chapter 5 Questions

CLEAN UP Learning Journal Questions

LEARNING JOURNAL One due each week in the journal area – See tabs at top of page.

PROBLEM REVIEW What caused the most problem?

WEEK 1 PROBLEMS: Very good discussions – Keep it up! 50% had problem with this quiz question: Laws such as the RICO Act (racketeering influence and corrupt organizations), money laundering, false claims, bankruptcy fraud, tax evasion, conspiracy, and obstruction of justice require that "reasonable believe" is established prior to intrusive searches in order to comply with the regulatory rules of evidence. Pg 39 states “probable cause” so answer is false. Everything else was smooth sailing!

Watch a couple of videos and then match concepts; so please pay close attention. Each video has a poll question Watch n Match

First video: Money Laundering Watch first 5 ½ minutes, pause video, and then return to match! DO NOT LEAVE VIDEO AS YOU WILL RETURN FOR MORE… Watch n Match 1a1a

A.Move money to Legitimate Business B.Deposit in Small Increments C.Fanout Watch n Match 1.Placement Stage 2.Layering Stage 3.Re-Entry Stage Match the stages of money laundering to the appropriate activity

B.Deposit in Small Increments C.Fanout A.Move money to Legitimate Business Watch n Match 1.Placement Stage 2.Layering Stage 3.Re-Entry Stage Match the stages of money laundering to the appropriate activity

First video part 2: Money Laundering Return to watch the rest of your video! Watch n Match 1b1b

A.A method use to layer money B.Animal use to move money across border C.People who transport money across border within their person Watch n Match 1.Money Mule Match Money Mule to the correct description

A.A method use to layer money Watch n Match 1.Money Mule Match Money Mule to the correct description

Second video: Asset Forfeitures Watch complete 3 minutes and return to match! Watch n Match 2

1.Collect revenues for government 2.Return lost money to victims 3.Punish perpetrators 4.All of the above What is the purpose behind the asset forfeitures as identified in this CNN video?

Watch n Match 1.Collect revenues for government 2.Return lost money to victims 3.Punish perpetrators 4.All of the above What is the purpose behind the asset forfeitures as identified in this CNN video?

Last video: CNBC News Report on Drug Company Racketeering Watch complete 3 minutes and return This video will hurt! Watch n Match 3

1.Violent crimes 2.Money laundering 3.Mail and wire fraud 4.Securities fraud 5.All of the above What acts below are considered Racketeering? See pg 97 in text

TAX EVASION Tax avoidance consists of using legal means and methodology to minimize taxes within the existing framework of tax rules and regulations. Tax evasion is the intentional wrongdoing to evade taxes believed to be owed. Common tax evasion schemes include: Deliberate understatement of taxes owed The omission of taxable transactions and activities Fictitious events and activities Hidden events and activities False statements made to tax agents

BANKRUPTCY FRAUD The bankruptcy court has the right to appoint a trustee in cases where there are claims of fraud, dishonesty, incompetence, or gross mismanagement One of the roles of the trustee is to attempt to identify missing assets and locate them. Bankruptcy crimes are investigated by the FBI and prosecuted by the U.S. Attorney’s Office.

SECURITIES FRAUD Pyramid Schemes –Ponzi “Prime Bank” Fraud – promise huge returns Churning-excessive selling of securities Unsuitable Recommendations by brokers Parking – selling securities with buyback agreements avoid Front Running-insiders at exchange trade before large blocks Bucket Shops –unlicensed brokerage business Misuse or Misappropriation of a Customer’s Securities- use client funds as own. Market Manipulations –artificial control of stock price Insider Trading- use non public information

CHAPTER 5 Cybercrime

CYBERCRIMECYBERCRIME Criminal activity using computer or network of computers Examples include spamming, theft of electronic intellectual property, unauthorized access (e.g., defeating access controls), malicious code (e.g., computer viruses), denial-of-service attacks, theft of service (e.g., telecom fraud), and computer-based investment and other financial frauds.

CYBERCRIMECYBERCRIME The Department of Justice categorizes computer crime in three ways: 1.The computer as a target - attacking the computers of others (spreading viruses is an example). 2.The computer as a weapon - using a computer to commit "traditional crime" that we see in the physical world (such as fraud or illegal gambling). 3.The computer as an accessory - using a computer as a "fancy filing cabinet" to store illegal or stolen information. Source:

CYBERCRIME VIDEO Video review of Cybercrime by McAfee Please watch this video and return here. Type Done in the chat window when finished Click on Watch five minute introductory video

CYBERCRIME VIDEO In this video you heard specific information about cybercrime. After our meeting, return to this site and do this steps; then take off for the night as McAfee checks your system for elements of cybercrime. DO NOT DO THIS NOW! Go to the SAME video site site and check to see if your computer has been infected. 1.Use Internet Explorer only. 2.Instead of clicking on the five minute video, click on “Access your risk” at the top section of the page. 3.Read the possible causes and click on “My computer is not acting the way it normally does”. You can click other areas if you like. 4.Click on Submit 5.Click on “McAfee Cybercrime Scanner” 6.Read the information and click on “CONTINUE” 7.Return 60 minutes later to reveal results.

CYBERCRIME RESOURCES Great resource to support reading this week: Information on crimes of fraud, cybercrime, etc. from Interpol Deloitte white paper on cybercrime UnitedStates/Local%20Assets/Documents/AERS/us_aers_Deloitte%20Cyber%20Crime%20P OV%20Jan pdf MacAfee report on cybercrime Speech by Shawn Henry, Director of the FBI on responding to cybercrime FBI information on cybercrime Learn about Internet Fraud and the schemes used from the FBI

Are there any questions? If you attending the live session tonight, then you do NOT need to complete the alternative seminar assignment.