CFE – Investigation — Question 3

Which of the following is NOT true with regard to tracing the disposition of loan proceeds?

Answer options

• A. Tracing loan proceeds can determine if hidden accounts were used for loan payments.
• B. Tracing loan proceeds can reveal previous civil offenses committed by the subject.
• C. Tracing loan proceeds can uncover previously unknown witnesses.
• D. Tracing loan proceeds can determine if the proceeds were deposited into hidden accounts.

Correct answer: C

Explanation

Option C is the correct answer because tracing loan proceeds typically does not lead to the discovery of witnesses; instead, it focuses on the financial trail of the funds. The other options (A, B, and D) accurately describe the potential findings from tracing loan proceeds, such as identifying hidden accounts and revealing past offenses.