CFE – Law — Question 63

Bob owns a struggling business called Luxury Rentals that has ten luxury vehicles. A week before Luxury Rentals files for bankruptcy, Bob transfers ownership of one of the vehicles to his wife. Which type of fraud scheme has Bob MOST LIKELY committed?

Answer options

• A. A fraudulent bankruptcy
• B. A fraudulent conveyance
• C. A concealed transfer
• D. A planned bustout

Correct answer: B

Explanation

Bob is most likely guilty of a fraudulent conveyance, which involves transferring assets to avoid creditors during bankruptcy. The other options do not accurately describe his actions: a fraudulent bankruptcy refers to filing false information, a concealed transfer doesn't specify a recipient, and a planned bustout involves a larger scheme to defraud creditors without any intention of repayment.