CFE – Law — Question 8

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

Answer options

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

Correct answer: D

Explanation

Tatiana likely committed a fraudulent conveyance, which involves transferring assets to avoid creditors before bankruptcy. Selling mattresses to her husband at such a significant discount indicates an intention to hide the value of the assets. The other options do not accurately represent the specific act of asset transfer with intent to defraud creditors.