CFE – Financial Transactions and Fraud Schemes — Question 82

Which of the following scenarios is MOST indicative of a loan fraud scheme?

Answer options

• A. There are no change orders for a large project
• B. A draw request is received for a construction loan
• C. No missing documents in the loan file
• D. There is low turnover in the developer’s personnel

Correct answer: B

Explanation

Option B is correct because a draw request for a construction loan can indicate potential fraud if it is not accompanied by appropriate documentation or validation of project progress. The other options do not inherently suggest fraudulent activity; for instance, having no missing documents (C) actually points to proper documentation, while low turnover (D) and no change orders (A) are normal business practices that do not indicate fraud.