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.

Advanced Forensic Accounting -ACC 465

UNIT UNIT 33

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:WEEK 1 PROBLEMS:WEEK 1 PROBLEMS: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 Launderinghttp://www.youtube.com/watch?v=1yQ9dVOt8DAWatch first 5 ½ minutes, pause video, and then return to match!DO NOT LEAVE VIDEO AS YOU WILL RETURN FOR MORE…

Watch n Match

1a

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

D. 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 Launderinghttp://www.youtube.com/watch?v=1yQ9dVOt8DAReturn to watch the rest of your video!

Watch n Match

1b

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!http://www.youtube.com/watch?v=pdcyetVibf0

Watch n Match

2

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?

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 returnhttp://www.youtube.com/watch?v=-dYmxjcs7WYThis video will hurt!

Watch n Match

3

Watch n Match

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 EVASIONTAX EVASIONTAX EVASIONTAX 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 FRAUDBANKRUPTCY FRAUDBANKRUPTCY FRAUDBANKRUPTCY 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 FRAUDSECURITIES FRAUDSECURITIES FRAUDSECURITIES 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

CYBERCRIMECYBERCRIMECYBERCRIMECYBERCRIME

• 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.

CYBERCRIMECYBERCRIMECYBERCRIMECYBERCRIME

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: http://www.cybercitizenship.org/crime/crime.html

CYBERCRIME VIDEOCYBERCRIME VIDEOCYBERCRIME VIDEOCYBERCRIME VIDEO

Video review of Cybercrime by McAfeePlease watch this video and return here. Type Done in the chat window when finished

http://www.mcafee.com/us/campaigns/fight_cybercrime/cru/index.html

Click on Watch five minute introductory video

CYBERCRIME VIDEOCYBERCRIME VIDEOCYBERCRIME VIDEOCYBERCRIME 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 Submit5.Click on “McAfee Cybercrime Scanner”6.Read the information and click on “CONTINUE”7.Return 60 minutes later to reveal results.

CYBERCRIME RESOURCESCYBERCRIME RESOURCESCYBERCRIME RESOURCESCYBERCRIME RESOURCES

Great resource to support reading this week:•Information on crimes of fraud, cybercrime, etc. from Interpolhttp://www.interpol.int/Crime-areas•Deloitte white paper on cybercrimehttp://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/AERS/us_aers_Deloitte%20Cyber%20Crime%20POV%20Jan252010.pdf•MacAfee report on cybercrimehttp://www.mcafee.com/us/resources/reports/rp-virtual-criminology-report-2009.pdf•Speech by Shawn Henry, Director of the FBI on responding to cybercrimehttp://www.fbi.gov/news/speeches/responding-to-the-cyber-threat• FBI information on cybercrimehttp://www.fbi.gov/about-us/investigate/cyber/cyber•Learn about Internet Fraud and the schemes used from the FBIhttp://www.fbi.gov/scams-safety/fraud/internet_fraud

Are there any

questions?

If you attending the live session tonight, then you do NOT need to complete the alternative seminar assignment.