05 Covert Examination Flashcards
(14 cards)
A fraud examiner is deciding whether to conduct a traditional or a covert examination for a suspected fraud. Which of the following factors would be most favorable to conducting a covert examination?
A. The fraud examiner has several avenues through which he can obtain the necessary information.
B. The fraud examiner would like to determine who is responsible for known losses occurring in a certain area.
C. The fraud examiner finds it important to collect information in a direct manner from people possessing it.
D. There are sufficient details at the present time to apprehend the suspect.
B. The fraud examiner would like to determine who is responsible for known losses occurring in a certain area.
The following situations are those in which covert operations have traditionally worked well:
* There is reliable information about criminal activity or asset losses, but insufficient detail for prevention or apprehension.
* Losses are known to be occurring in an area, but there is no information as to how they are occurring or who is responsible.
* It is desirable to gather information concerning personal relationships or to identify the contacts made with or by certain people.
* It is desirable to compare actual practices with supposed or required practices.
* It is important to obtain information in an indirect manner from people believed to possess it.
Covert operations should be used when there is no other practical way to obtain necessary information.
When a fraud examiner prepares a memorandum reflecting the information furnished by a confidential source, how should the fraud examiner identify the source?
A. The fraud examiner should use symbols to denote the source’s identity.
B. The fraud examiner should not write confidential source information in a memorandum.
C. The fraud examiner should identify the source by the source’s full name.
D. The fraud examiner should identify the source using the source’s initials.
A. The fraud examiner should use symbols to denote the source’s identity.
It is recommended that all contact with informants and sources be reported on a memorandum, although the confidential source or informant’s identity should not be included in the report. Instead of including the source or informant’s identity, the fraud examiner should use symbols to denote the source’s identity. It is further recommended that sources be preceded with an “S,” followed by a unique identifier (i.e., source #1 would be “S-1”; source #2 would be “S-2”). The symbols for informants would then be “I-1” and “I-2.”
To protect the security of a covert investigation, reports or memoranda of the covert operation should not be committed to paper.
A. True
B. False
B. False
Before conducting a covert operation, it is essential that the basis for the operation be committed to writing, preferably in a memo. The memorandum should clearly state:
* The information upon which the covert operation will be based
* The information that is expected to be gained from the operation
* The identities of suspects, if known
* Operatives under the fraud examiner’s care, custody, or control (confidential sources’ identities should not be disclosed, but such sources should be referred to with a symbol)
Which of the following is a valid legal defense to allegations of entrapment against a fraud examiner who is a federal law enforcement officer?
A. The fraud examiner had suspicion of foul play.
B. The suspect made exculpatory statements.
C. There is proof of the suspect’s modus operandi.
D. The fraud examiner acted with adequate predication.
D. The fraud examiner acted with adequate predication.
Many jurisdictions recognize the legal defense of entrapment. Entrapment occurs when law enforcement officers or government agents induce a person to commit a crime that he is not previously disposed to commit. Entrapment also poses a legal problem in covert operations, particularly in undercover operations, because the defendant might not be found liable if it appears that he was improperly induced to commit the crime. Therefore, it is imperative that adequate predication exists before the operation is commenced. The law enforcement officer or government agent must act based on more than mere suspicion. For example, if the officer received a reliable tip that a suspect committed fraud, then that could serve as adequate predication. Covert operations must not be used for aimless searches for information performed without notions of what might be uncovered.
Alex, a fraud examiner, receives an anonymous call from someone who claims to have information regarding a fraud at Alex’s company. The whistleblower says he will only provide the information if he is given unqualified confidentiality. Alex says he cannot make that promise. Was Alex’s statement prudent under the circumstances?
A. Yes, because Alex may attempt to protect the whistleblower’s confidentiality, but cannot guarantee it.
B. No, because Alex will likely lose the whistleblower as a source, resulting in harm to his client.
C. No, because whistleblowers are allowed unqualified confidentiality.
D. Yes, because Alex must report all details concerning the whistleblower to his client.
A. Yes, because Alex may attempt to protect the whistleblower’s confidentiality, but cannot guarantee it.
When dealing with a confidential informant, the fraud examiner is not in a position to offer unqualified confidentiality. Therefore, any promises made to the informant should be qualified with the caveat that no absolute assurances of confidentiality can be given. The fraud examiner should explain to the informant that all steps possible will be taken to ensure complete confidentiality.
Undercover covert operations often use disguise and deceit to obtain evidence directly from people involved in the offense, whereas surveillance operations use the skill of observation to gather information about individuals’ activity.
A. True
B. False
A. True
The two main forms of covert operations are undercover operations and surveillance operations. Undercover operations often use deception and disguise to obtain evidence directly from those involved in the illicit activity. Agents engaged in undercover operations actively attempt to elicit the desired information. In contrast, surveillance operations use observation to gather information about individuals suspected of misconduct.
For example, a surveillance operation might involve observing a suspect from afar while he meets with a potential co-conspirator. Alternatively, the investigator might pose as the co-conspirator’s agent and engage the suspect in conversation in an attempt to gather information; this would be an example of an undercover operation.
As long as the fraud examiner is not a government employee, promises of unqualified confidentiality for informants or sources are encouraged to get them to participate.
A. True
B. False
B. False
Whether working in private or government sectors, fraud examiners are not in a position to offer unqualified confidentiality to informants. Therefore, any promises made to an informant or source should be qualified with the caveat that no absolute assurances of confidentiality can be given. For example, a fraud examiner might say that he cannot guarantee that the source’s identity will be kept secret, but that he will do so if possible. In the case of a fraud examiner who is employed by a governmental agency, there might be an absolute duty not to hold sources and informants in confidence. In many law enforcement agencies, an investigator might not have informants or sources who are unknown to the agency. Investigative agencies also regularly share information on criminal investigations with prosecutors, including the identity of the source of information. The same regulations and considerations could govern business entities.
Spencer, a fraud examiner, plans to use a confidential informant. The informant agrees to aid Spencer in exchange for cash. Spencer prepares a receipt for the transfer of cash to the informant and asks the informant to sign it, but the informant refuses. What should Spencer do?
A. Have a witness observe the transfer of cash and sign a statement attesting to the transaction
B. Give the informant the cash, but make no record of the transaction
C. Refuse to pay the cash without a receipt, even if it means the informant will not aid Spencer
D. None of the above
C. Refuse to pay the cash without a receipt, even if it means the informant will not aid Spencer
If the fraud examiner decides to pay an informant or source, he should make the payment in cash and obtain a receipt. If the source will not sign a receipt, the fraud examiner should not pay him. There have been numerous instances where a receipt was not obtained and the informant subsequently denied receiving funds or challenged the amount paid. If this happens, the fraud examiner will have to defend himself without proof; indeed, some investigators have been accused of having embezzled the payments. Payments should only be made on a cash-on-delivery-of-information basis.
Which of the following facts would best support the defense of a law enforcement officer against an allegation of entrapment?
A. The officer acted based on his suspicion of fraud
B. The officer acted without malice
C. The officer acted based on a tip from a reliable source
D. All of the above
C. The officer acted based on a tip from a reliable source
Many jurisdictions recognize the legal defense of entrapment. Entrapment occurs when law enforcement officers or government agents induce a person to commit a crime that he is not previously disposed to commit. Entrapment also poses a legal problem in covert operations, particularly in undercover operations, because the defendant might not be found liable if it appears that he was improperly induced to commit the crime. Therefore, it is imperative that the operation be properly predicated. The law enforcement officer or government agent must act based on more than mere suspicion. For example, if the officer received a reliable tip that a suspect committed fraud, then that could serve as adequate predication. Covert operations must not be used for aimless searches for information performed without notions of what might be uncovered.
Which of the following is the type of covert operation in which a fraud examiner observes situations and interactions to gather information about individuals’ activity?
A. A source operation
B. An entrapment operation
C. An undercover operation
D. A surveillance operation
D. A surveillance operation
The two main forms of covert operations are undercover operations and surveillance operations. Undercover operations often use deception and disguise to obtain evidence directly from those involved in the illicit activity. Agents engaged in undercover operations actively attempt to elicit the desired information. In contrast, surveillance operations use observation to gather information about individuals suspected of misconduct.
For example, a surveillance operation might involve observing a suspect from afar while he meets with a potential co-conspirator. Alternatively, the investigator might pose as the co-conspirator’s agent and engage the suspect in conversation in an attempt to gather information; this would be an example of an undercover operation.
Which of the following is the type of covert operation in which a fraud examiner uses disguise and deceit to actively seek out evidence from people involved in the offense?
A. An informant operation
B. A surveillance operation
C. An undercover operation
D. An entrapment operation
C. An undercover operation
The two main forms of covert operations are undercover operations and surveillance operations. Undercover operations often use deception and disguise to obtain evidence directly from those involved in the illicit activity. Agents engaged in undercover operations actively attempt to elicit the desired information. In contrast, surveillance operations use observation to gather information about individuals suspected of misconduct.
For example, a surveillance operation might involve observing a suspect from afar while he meets with a potential co-conspirator. Alternatively, the investigator might pose as the co-conspirator’s agent and engage the suspect in conversation in an attempt to gather information; this would be an example of an undercover operation.
A memorandum that outlines the basis for a covert operation should state which of the following?
A. The information expected to be gained
B. The identities of any known suspects
C. The operatives under the fraud examiner’s care or control
D. All of the above
D. All of the above
Before conducting a covert operation, it is essential that the basis for the operation be committed to writing, preferably in a memo. The memorandum should clearly state:
* The information upon which the covert operation will be based
* The information that is expected to be gained from the operation
* The identities of suspects, if known
* Operatives under the fraud examiner’s care, custody, or control (confidential sources’ identities should not be disclosed, but such sources should be referred to with a symbol)
Covert operations are designed to obtain legal and admissible evidence through the use of agents whose true intentions are not communicated to the target.
A. True
B. False
A. True
A covert operation is an investigation technique designed to obtain evidence by use of agents whose true intentions are not communicated to the target.
___________ refers to an instance when law enforcement officers or government agents induce a person to commit a crime that he is not previously disposed to commit.
A. Covert operation
B. Entrapment
C. Collusion
D. False imprisonment
B. Entrapment
Many jurisdictions recognize the legal defense of entrapment. Entrapment occurs when law enforcement officers or government agents induce a person to commit a crime that he is not previously disposed to commit. Entrapment also poses a legal problem in covert operations, particularly in undercover operations, because the defendant might not be found liable if it appears that he was improperly induced to commit the crime. Therefore, it is imperative that adequate predication exists before the operation is commenced. The law enforcement officer or government agent must act based on more than mere suspicion. For example, if the officer received a reliable tip that a suspect committed fraud, then that could serve as adequate predication. Covert operations must not be used for aimless searches for information performed without notions of what might be uncovered.
