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Fraud

Quiz: Test your knowledge of famous scams and shams

Just how savvy are you about financial crime and the regulations that are in place to help prevent it?

Illustration of hand reaching out to take red piggy bankFraudsters are always coming up with devious new ways to trick investors and other unsuspecting victims (Getty Images/ erhui1979)

The world of finance has always been plagued by its share of shady schemes and infamous personalities.

Here’s your chance to see how much you know about some of the world’s most well-known fraud cases, as well as the regulations that are in place to help prevent money laundering and other types of financial crime.

1) FTX was launched in May 2019 as a trading platform for crypto investors. In late 2022, the U.S. Securities and Exchange Commission accused its founder of defrauding their companies’ investors. FTX went bankrupt and this founder was arrested on fraud charges in the Bahamas.

  1. a) Frank Bankman-Saed
    b) Sam Bankman-Fried
    c) Sam Frankman-Bide
    d) Ben Sandman-Fried

2) In March 2004, this Stanford University sophomore dropped out of school to focus on her new startup, which set out to make blood tests more efficient. Valued at $10 billion in 2014, the company was dissolved by 2018 after federal and state regulators filed wire fraud and conspiracy charges against the company, and sent this founder to jail for 11 years.

  1. a) Elizabeth Bennett
    b) Elizabeth March
    c) Elizabeth Holmes
    d) Elizabeth Rubble

3) Founded in 1989, the Financial Action Task Force (or FATF) serves as a global watchdog and makes recommendations regarding money laundering and terrorist financing. Which Canadian CPA recently became its vice-president?

  1. a) Jeremy Weil
    b) Lucinda Stanley
    c) Catherine Bailey
    d) Roger Main

4) Convicted former New York City fund manager Bernie Madoff passed away in April 2021 in prison at the age of 82. Investigations had revealed that his firm stole over $19 billion from 40,000 investors. What stock exchange did Madoff chair in 1990, 1991 and 1993?

  1. a) New York Stock Exchange
    b) London Stock Exchange
    c) Nasdaq
    d) Deutsche Boerse

5) What is the purpose of CPA Canada’s Guide to comply with Canada’s anti-money laundering and anti-terrorist financing (AML/ATF) legislation?

  1. a) Help CPAs determine if AML/ATF obligations are applicable to their activities
    b) Inform CPAs about the requirements to comply with their obligations
    c) Educate CPAs about the examination focus and enforcement methods by the AML/ATF regime supervisor, FINTRAC, and risks of non-compliance
    d) All of the above

6) Dubbed “America's most innovative company” by Fortune every year from 1996 to 2001, this Houston-based corporation admitted to the SEC in November 2001 that it had overstated profits by nearly $600 million.

  1. a) Enron
    b) Pets.com
    c) Conseco Inc.
    d) MF Global

7) This Canadian businessman was the co-founder and CEO of WorldCom, which in 2002 admitted to nearly $3.9 billion in accounting misstatements. In 2009, Time named him the 10th most corrupt CEO of all time and in 2013, CNBC named him the fifth worst CEO in American history.

  1. a) Bernard Madoff
    b) Bernard Ebbers
    c) Bernard Summers
    d) Bernard Coulter

8) These Canadian con artists who orchestrated Canada's largest Ponzi scam spent only two of their 12-year sentences in prison. More than 2,400 investors from around the world lost between $100 million and $400 million in the scam.

  1. a) Milowe Brost and Gary Sorenson
    b) Pascal and Maximus
    c) Milton Hardcastle and Mark McCormick
    d) Rick Campanelli and Steve Anthony

9) In what year was Canada’s Proceeds of Crime (Money Laundering) Act expanded to include terrorist financing?

  1. a) 1996
    b) 2001
    c) 2008
    d) 2012

10) In 1919, Charles Ponzi pawned his wife’s jewelry to open this company, promising investors a 50 per cent return on their investment within 45 days, or a 100% return within 90 days.

  1. a) National Securities Exchange
    b) Securities and Exchange Commission
    c) Dow Jones and Company
    d) Securities Exchange Company

11) In 2006, this U.S. businessman was knighted by the Antiguan government as “the leading benefactor, promoter, employer and public persona” of Antigua and Barbuda. In 2009 he was found responsible for an ongoing Ponzi scheme involving around US$7 billion and was sentenced to 110 years in prison. Who is he?

  1. a) Allen Stanford
    b) John Paulson
    c) Nick Leeson
    d) Norman McLeod

12) Jordan Belfort was indicted for securities fraud and money laundering in 1999. He split a jail cell with a famous Canadian comedian who convinced him to write the book, The Wolf of Wall Street. Who was that comedian?

  1. a) Alan Thicke
    b) Phil Hartman
    c) Tommy Chong
    d) Howie Mandel

13) A new provision was recently added to the definition of money laundering in the Criminal Code that lowers the threshold for law enforcement and prosecutors to pursue money-laundering charges. What is the term often used to characterize this provision?

  1. a) The risk assessment provision
    b) The casus rectus provision
    c) The KYC provision
    d) The recklessness provision

14) In June 2022, the Report of the Commission of Inquiry into Money Laundering in British Columbia was delivered to the provincial government. What is the informal name often used to refer to the report?

  1. a) The Mackenzie commission report
    b) The Cullen commission report
    c) The Macdonald commission report
    d) The Davis commission report

15) This global financial services firm was founded in 1847 and became one of the largest investment banks in the United States. During the 2008 financial crisis, it was discovered that the company had hidden more than $50 billion in loans. It filed for Chapter 11 soon after.

  1. a) Washington Mutual Bank
    b) IndyMac Bank
    c) MF Global
    d) Lehman Brothers

ANSWERS

Question 1: b
Question 2: c
Question 3: a
Question 4: c
Question 5: d
Question 6: a
Question 7: b
Question 8: a
Question 9: b
Question 10: d
Question 11: a
Question 12: c
Question 13: d
Question 14: b
Question 15: d

HOW WELL DID YOU DO?
You answered 10 or more questions correctly:
Well done! You’re a savvy CPA who’s up on who’s up on the what’s what and the who’s who in the world of money laundering and other types of financial crime.

You answered five to nine questions correctly:
You have a fairly good knowledge of financial crime, but you might consider some extra reading to complement what you already know.

You answered zero to four questions correctly:
Time to brush up on Canada’s AML regime and and your general knowledge of financial crime in Canada and elsewhere.

LEARN MORE ABOUT FINANCIAL CRIME

Check out CPA Canada’s extensive anti-money laundering resources, including its updated AML guide. Read up on how an intrepid journalist uncovered a huge financial scandal in the UK, and find out what it takes to become a specialist in AML.