ACFE CFE- Fraud-Schemes-and-Financial-Crimes Based on Real Exam Environment

Detailed Explanation:

Rationale for Correct Answer: This scheme is a business email compromise (BEC) , also known as CEO fraud. Fraudsters impersonate high-ranking executives to trick employees into transferring money or disclosing confidential information.

Analysis of Incorrect Options:

A. Reverse social engineering – Involves the fraudster posing as a helper and then exploiting the victim, not impersonating executives.

B. Executive email attack – A generic term, but the ACFE recognizes BEC as the precise classification.

C. Electronic piggybacking – Refers to unauthorized access through another user’s session, not impersonation.

Key Concept: Social engineering and cyber-enabled fraud – BEC schemes.

Detailed Explanation:

Rationale for Correct Answer: Prepaid debit and gift cards are attractive because they allow fraudsters to convert stolen credit card funds into cash or easily launder illicit funds . They are widely available and accepted both in person and online, making option A correct.

Analysis of Incorrect Options:

B. Only from financial institutions – False; cards are sold at retail stores and online.

C. Not accepted online – False; they are accepted by most online retailers.

D. All of the above – Incorrect since B and C are false.

Key Concept: Prepaid card fraud as part of asset misappropriation and identity theft schemes.

Detailed Explanation:

Rationale for Correct Answer: Simply holding two jobs without disclosure is not inherently a conflict of interest unless the roles compete, overlap, or present divided loyalties. The other options all describe undisclosed financial or relational interests that conflict with the employer’s best interest.

Analysis of Incorrect Options:

A. Harriet’s stock ownership – Direct financial conflict.

C. Jennifer’s board positions – Competing loyalties between competitors.

D. Ernest hiring his brother – Nepotism without disclosure is a conflict.

Key Concept: Conflict of interest schemes in corruption.

Detailed Explanation:

Rationale for Correct Answer: Card skimming/shimming occurs when a fraudster captures payment card data with a hidden device. In this case, the employee secretly scans the customer’s card with a small device — a textbook example of skimming.

Analysis of Incorrect Options:

A. Server keeps the card – This is theft of the card, not skimming.

B. Imitation website – This is phishing , not skimming.

D. None of the above – Incorrect since option C is correct.

Key Concept: Payment card fraud — skimming/shimming devices.