CFE – Financial Transactions and Fraud Schemes — Question 87

Pilar was in charge of purchasing computer equipment for ABC Corporation. Pilar set up a shell company, used the shell company to purchase used computer equipment, and then re-sold that equipment to ABC Corporation at an inflated price.
This is an example of:

Answer options

• A. A cash larceny scheme
• B. A pay and return scheme
• C. A need recognition scheme
• D. A pass-through scheme

Correct answer: B

Explanation

The correct answer is B, as this scenario describes a pay and return scheme where Pilar used a shell company to inflate costs. Option A is incorrect because cash larceny involves stealing cash directly rather than equipment, while C and D do not fit the context of inflating prices through a shell company.