Pilar had to purchase computer equipment for ABC Corporation, her employer. Pilar created a shell company, used the shell company to purchase used computer equipment, and then resold that equipment to ABC Corporation at an increased price. This is an example of a:
Suggested Answer:
C
Explanation:
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).