ACFE CFE-Law Exam - Topic 1 Question 38 Discussion

Actual exam question for ACFE's CFE-Law exam

Question #: 38
Topic #: 1

Tatiana is the chief executive officer (CEO) of Mattress World Warehouse, a retail mattress store that has been struggling financially A week before Mattress World Warehouse files for bankruptcy Tatiana sets ten mattresses to her husband at 80% below market value Which type of fraud scheme has Tatiana MOST LIKELY committed?

AA fraudulent bankruptcy

BA fraudulent conveyance

CA planned bustout

DA concealed transfer

Show Suggested Answer

Suggested Answer: A

by Anastacia at Jun 01, 2024, 10:05 AM

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Argelia

3 months ago

I’m surprised she thought she could get away with that!

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Ashanti

3 months ago

Definitely a fraudulent conveyance, no doubt about it.

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Ashton

4 months ago

Wait, isn't it possible she was just trying to help her husband?

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Timothy

4 months ago

Totally agree, that discount is way too suspicious!

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Miesha

4 months ago

Sounds like a classic case of a fraudulent conveyance.

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Ming

4 months ago

I’m torn between a fraudulent conveyance and a planned bustout. It seems like she was trying to get rid of assets quickly, but I need to think more about the definitions.

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Adela

5 months ago

I practiced a similar question where the CEO sold assets to family members before bankruptcy. I think that was also a fraudulent conveyance.

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Linwood

5 months ago

I'm not entirely sure, but I remember something about concealed transfers being related to hiding assets. Could this be that?

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Josphine

5 months ago

I think this might be a case of a fraudulent conveyance since she sold the mattresses to her husband at such a low price right before bankruptcy.

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Tijuana

5 months ago

I'm a little confused on the difference between the options here. Fraudulent conveyance, planned bustout, and concealed transfer all sound similar. I'll need to review the definitions of each one more carefully to decide which one fits best.

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Tamar

5 months ago

Okay, let me break this down. Tatiana sold mattresses at 80% below market value right before the company filed for bankruptcy. That sounds like she was trying to transfer assets out of the company before the bankruptcy, so I'm going to go with B - fraudulent conveyance.

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Lashaun

5 months ago

Hmm, I'm a bit unsure on this one. The question mentions bankruptcy, but also talks about Tatiana selling mattresses at a discount. I'll need to think through the different fraud schemes and see which one fits best.

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Dorsey

5 months ago

This one seems pretty straightforward. The key details are that Tatiana sold mattresses at a huge discount right before the company filed for bankruptcy, so it's likely a fraudulent conveyance.

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Dorethea

5 months ago

I'm pretty confident this is a fraudulent conveyance. Tatiana seems to have intentionally transferred company assets (the mattresses) to her husband at a huge discount right before the bankruptcy filing. That's a classic example of a fraudulent conveyance.

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Nickie

5 months ago

Okay, let me see here. I know technical analysis has to do with studying past price movements, so that seems like the most likely answer. I'll go with A.

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Filiberto

5 months ago

I think the answer might be C, but I'm not completely sure. I remember something about checking options in Micro Traces.

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Annmarie

5 months ago

I'm a bit confused. The question mentions an SMA of $500, but I'm not sure how that factors into the equity calculation. Is that something I need to consider?

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Ahmed

5 months ago

Wait, I'm confused. Is this asking about the capacity that's actually available, or the capacity that's required? I'll have to think through the differences between those concepts.

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Elvera

10 months ago

I'm going with B) Fraudulent conveyance. Transferring assets at below market value to avoid creditors is a classic move in a bankruptcy scheme.

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Mitsue

9 months ago

Tatiana was trying to hide those assets from creditors for sure.

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Royce

9 months ago

Definitely, transferring assets at below market value is a red flag.

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Ressie

10 months ago

That sounds like a fraudulent conveyance.

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Stevie

10 months ago

Haha, can you imagine Tatiana trying to explain this to the bankruptcy court? 'But your honor, I was just giving my husband a really good deal on some mattresses!'

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Marti

10 months ago

C: I wonder if her husband knew what he was getting into.

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Janessa

10 months ago

B: Yeah, that's a clear case of fraudulent conveyance.

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Ezekiel

10 months ago

A: She's definitely in hot water for that one.

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Arthur

11 months ago

Hmm, I'm not sure. Could it be a planned bustout? Seems like she's trying to strip the company's assets before it goes under.

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Cory

10 months ago

B: Yeah, she's definitely trying to hide those assets before filing for bankruptcy.

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Charlesetta

10 months ago

A: I think you're right, it does sound like a planned bustout.

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Erick

11 months ago

I'm not sure, but it could also be a planned bustout since she sold the mattresses at a significant discount.

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Jamal

11 months ago

Tatiana's actions of selling the mattresses at 80% below market value right before filing for bankruptcy definitely sounds like a fraudulent conveyance to me. She's trying to hide assets from creditors.

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Dannie

11 months ago

I agree with Shawnda. It seems like Tatiana was trying to hide assets before filing for bankruptcy.

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Shawnda

11 months ago

I think Tatiana has committed a fraudulent conveyance by selling mattresses to her husband below market value.

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