Free ACFE CFE-Fraud-Schemes-and-Financial-Crimes Exam Dumps November 2026

Rationale for Correct Answer: A major red flag of a Ponzi scheme is when the

Analysis of Incorrect Options:

A -- Ponzi operators usually pressure investors to reinvest, not take payouts, to keep funds circulating.

C -- Schemes often involve overly complex or secretive strategies, not simple ones.

D -- Realistic fluctuations based on markets suggest legitimate investing, not a Ponzi scheme (which typically reports steady, unrealistic returns).

Key Concept: Ponzi schemes rely on lack of oversight, unrealistic returns, and control of funds by promoters.

Rationale for Correct Answer:

This is a Pass-through scheme, a type of Conflict of Interest under the corruption category. In this scheme, the employee sets up a shell company to act as a vendor. The shell purchases goods from legitimate suppliers and resells them to the employer at inflated prices. Pilar's actions align perfectly with this definition.

Analysis of Incorrect Options:

A . Need recognition scheme -- Involves manipulating an employer's need to justify a purchase, not reselling via a shell.

B . Pay and return scheme -- A fraudulent disbursement scheme where overpayments are made and refunds diverted. Not applicable here.

D . Cash larceny scheme -- Involves theft of incoming cash, unrelated to vendor fraud.

Key Concept: Pass-through scheme (Conflict of Interest within Corruption).