WCC Final Questions and Answers 2023

WCC Final Questions and Answers 2023 Emails sent by David Duncan, an Enron executive To the importance of destroying audit-able documents. Two Major laws were passed which opened the door to impending financial disaster. 1. In 1980, the Depository Institutions Deregulation and Monetary Control Act was signed into law. 2. 1982 by the Garn-St. Germain Act. These laws provided for a loosening of government control over the industry "INSIDER" THRIFT FRAUDS researchers have classified them into three distinct categories white-collar crime: (1) "desperation dealing"; (2) "collective embezzlement"; and (3) "covering up." The Commissioner ofthe California Department of Savings and Loans stated in 1987 "The best way to rob a bank is to own one." The traditional embezzler is usually seen a lower-level employee working alone to steal from a large organization. One of the most devious ways to disguise unlawful income is through Money laundering "OUTSIDER" THRIFT FRAUDS Industry regulators and FBI investigators have reported that appraisers, lawyers, and accountants were among the most S&L frequent co-conspirators Regarding the collapse of thrifts in Texas a staff member of the Senate Banking Committee predicted: "What you're going to find in these thrifts is a sort of mafia behind them: a fraudulent mutual support." A Senate Banking Committee memo delineates the four most common forms of fraudulent transactions land flips, nominee loans, reciprocal lending arrangements, and linked financing LAND FLIPS In a land flip, a piece of property, usually commercial real estate, is sold back and forth between two or more partners, inflating the sales price each time and refinancing the property with each sale until the value had increased several times over. NOMINEE LOANS Nominee loan schemes involve loans to a "straw borrower" outside the thrift who is indirectly connected to the thrift. Nominee loans are used to circumvent regulations limiting the permissible level of unsecured commercial loans made to thrift insiders. RECIPROCAL LENDING Reciprocal lending arrangements are similarly designed to evade restrictions on insider loans. LINKED FINANCING Finally, linked financing is "the practice of depositing money into a financial institution with the understanding that the financial institution will make a loan conditioned upon receipt of the deposits. These transactions usually involved brokered deposits in packages of$100,000, the limit on FSLIC insurance. The collapse of Lincoln Savings and Loan of Irvine, California. the most expensive thrift failure (a more than $3 billion cost to taxpayers), is notorious not only because of its massive losses, but because it serves as a prime example of all the excesses and corruption (Charles Keating) Lincoln Savings owner Charles Keating Keating purchased Lincoln and Savings with Junk Bonds Sold by Michael Milken Lincoln traded in junk bonds quickly transformed it from a traditional small thrift that made home mortgage loans into his own (and his family's) personal money machine. Keating's "masterpiece" Phoenician Hotel in Scottsdale, Arizona. American Continental Corporation. A fraudulent mortgage corporation which keating fund from his Lincoln Savings and loan company. Keating contributed $1.4 million to the campaigns and causes of five U.S. Senators who would later become known as "Keating Five. They were: Alan Cranston Dennis DeConcini, Don Riegle, John McCain, and John Glenn. Another meeting took place a week later with the full Keating Five, One of the regulators, Bill Black, took meticulous notes at the meeting which clearly indicate that the senators were attempting to thwart the government agency action regarding Lincoln. Alan Bond,former CEO of Albriond Capital Management was sentenced to 12 years in prison in 2002 for cheating pension funds out of millions of dollars Bond was convicted ofdefrauding clients by sending unprofitable securities trades to their accounts while directing most of the profitable ones to himself. In investment fraud parlance, this scheme is known as "cherry picking ... One of the largest pension fund scams occurred in California. By First Pension Corporation of Irvine First Pension was run by Businessman William E. Cooper In 1995, investors filed a class-action lawsuit against the California Corporations Department, which regulates businesses in that state, charging negligence in handling First Pension Cooper was sentenced to a 10 year prison term, while Lindley and Jensen were sentenced to nine and four years, respectively. "premium diversion common form of fraud,where by funds intended to cover claims are diverted for other purposes. Generally, an insurance agent fails to send premiums to the underwriter and instead keeps the money for personal use. The Multiple Employer Welfare Arrangement (MEWA) was created by Congress to help small businesses obtain reasonably priced healthcare coverage for their employees. Investigators have found that some firms that administer MEWAs are fraudulent enterprises—"virtual money machines for the unscrupulous." Subprime mortgage market. the Clinton administration authorized subprime loans under the CRA. As a result, mortgage lenders relaxed the financial qualifications for buying a house and offered mortgage loans to credit impaired households, albeit at higher interest rates to compensate for the greater risk. Eugenics— The "improvement" of the human race through such practices as selective breeding and compulsory sterilization. The United States and Germany remain The only "civilized" Western nations in which sterilization laws were enforced Between 1924 and 1972, the state of Virginia Sterilized over 8,300 mentally retarded citizens. 1927 ruling in Buck v. Bell This case involved the first victim of Virginia's Compulsory Sterilization Law—a teenage girl named Carrie Buck, who had been committed to the notorious Lynchburg Colony for Epileptics and the Feebleminded and subsequently was sterilized without her agreement The most widely discussed books in recent years The Bell Curve The Tuskegee Syphilis Experiment Study of Untreated Syphilis in the Negro Male. physicians depicted syphilis as the quintessential black disease. Tuskegee study emerged from a syphilis control survey that had been carried out by Alabama health officials in 1930 From 1938 to at least 1978,"there was an effort made by the agencies of the U.S. government to develop sophisticated techniques of psycho-politics and mind control 1. the use ofhypnosis to induce amnesia or elicit false confessions;36 and 2. the refinement of powerful conditioning techniques, such as sensory dep- rivation, desensitization, and aversion therapy, to control human behavior. In 1958, the CIA even prepared a report which suggested that the intelligence agencies might control people through drug addiction. CIA, Agency who mostly participated in Tuskegee Experiments Bacillus subtilis desease was dumped into the heart ofthe New York City subway system. How dangerous is Bacillus subtilis? It is dangerous indeed if one happens to be allergic to it, or is very old, very young, very ill or very anything that classifies a person as a compromised host. Might such people have been riding the subways? Of course. But beyond that, the exposed commuters became carriers, and took the bacteria with them as they traveled to their homes, to their offices or to hospitals to visit elderly relatives. Experiment conducted by the US Army. The U.S. Navy has the distinction of overseeing perhaps the most sickening of all the military experiments. The Navy earned this dubious honor between 1943 and 1945 because the research in question was so gruesome that even the Army was reluctant to participate. As one professor ofmedicine has observed: Thats the history of human experimentation. Its always using the poor or women, never white middle-class men. The American Civil Liberties Union has estimated that approximately 10 percent of the American prison population participates in medical and drug experiments. From the experimenters' point of view, there are two reasons why prisoners make convenient human subjects First, because the studies take place in an outcast environment, if prisoners such as James Downey become seriously ill—or even ifthey happen to die it is unlikely to generate much public concern. Second, prison studies are economical. One of the best known cases of illegal foreign intervention occurred in Chile in the 1970s. 1920s, a giant conglomerate, International Telephone and Telegraph (ITT), had built or purchased telephone companies throughout LatinAmerica During the next election, in 1970, the CIA and ITT worked in tandem against the popular socialist candidate, Salvador Allende. the CIA's Clandestine Services division has been labeled "the President's personal 'Saturday Night Special'." The Iran-Contra Affair The Iran-Contra Affair is a tale ofan "invisible government. It was President Reagan's announced intention to encourage the removal ofthe Marxist Sandinista government in Nicaragua. Boland Amendments Funding authorized by congres after their principal author Massachusetts congressman, severely limiting or prohibiting the appropriation of funds on behalf of the Contras in Nicaragua. Reagan administration formulated two types of schemes for circumventing the legally imposed restraints 1. to give the task of arming the Contras to the National Security Council. 2. to employ "private" or "third-party"funds, on the assumption that only official United States funds had been prohibited. Lieutenant Colonel Oliver North a decorated Vietnam veteran, who reportedly once had suffered a two-year emotional breakdown after the war, became the designated "contact" between the NSC and the Contras. "finding a written document describing the need for and nature of covert operations and requires the president's signature. "diversion memorandum" Drafted by North in April 1986 and forwarded to Reagan and Poindexter, it summarized the Iranian operations and indicated the use of arms sale profits for the Contras in Nicaragua. internment of Japanese-American citizens 1942, President Roosevelt issued an Executive Order evacuating over 100,000 Japanese-American residents of California, Oregon, and Washington and herding them into barbed wire enclosures under military guard. "Watergate" has come to symbolize the abuse of political power in America. Richard Nixon Little Corruption," the bribery and individual malfeasance. "Big Corruption," in which governmental deviance is normalized through political authority Watergate was "Big Corruption," a constitutional crisis ofthe first magnitude, perhaps America's closest brush with despotism national poll reported majority of the public rated Watergate as the worst scandal in American history Saturday Night Massacre Nixon ordered his close associates to be fired..Solicitor General Robert Bork agreed to dismiss Cox. An indignant press quickly labeled this remarkable sequence of events. On that tape, Haldeman informs Nixon that the burglars had been financed by CREEP campaign funds, and Nixon orders Haldeman to use the CIA to impede the FBI investigation This tape has become known as the "smoking gun A few days after the war began in Europe in 1939, Roosevelt issued a proclamation officially placing the FBI in charge ofall investigations of espionage, sabotage, and subversive activities This document has come to be known as the Magna Carta. Under the direction of FBIs director Hoover. The sedition provisions ofthe Alien Registration Act of1940, known as the Smith Act,as well as postwar measures such as the Loyalty Program of 1947, the Internal Security Act of 1950 and the Communist Control Act of 1954, Expanded the FBI's authority to spy on American citizens.