#26 - If a corporation obtains funds fraudulently, then the

[lday4]

This question didn't seem like it had a great answer choice, can you explain how E is a better answer than B?
Thanks!

[Nikki Siclunov]

Hi,

The key to differentiating between answer choices (B) and (E) lies in the stimulus, as it always does. The principle dictates that the penalty for fraudulent activity should completely offset any profit that resulted from that activity. That way, I don't benefit at all from the crime I committed. Let's say I stole $100 from you and bought a share in a company that later increased in value 1000 times. Well, according to the principle in the stimulus, my penalty for stealing 100 bucks should be $100,000.

This is precisely what answer choice (E) suggests: the convicted criminal should not benefit from the proceeds of the book he wrote describing the details of his crime: any proceeds should be donated to a charity chosen by a third party. That way, the criminal doesn't even get the benefit of choosing the recipient of his donation, nor does he get to keep the money he would have made thanks to the crime he committed. The underlying logic is the same: the penalty should completely negate any benefit that the criminal might have obtained as a result of the committed crime.

Answer choice (B) simply requires that the factory be brought into compliance with the pollution laws it violated. That's not what we are looking for. For answer choice (B) to be correct, the factory should be required not only to make whatever expenditures necessary to bring it into compliance, but also repay all the benefits it reaped from violating the pollution laws in the first place. The point is, the penalty paid should completely offset any profit made as a direct result of the violation. This is not the argument made in answer choice (B), making it incorrect.

Hope this helps! Let me know.

Thanks,

[lday4]

That helps a lot, I could see why B was wrong, but was having some difficulty reasoning out the "obtained fraudulently" piece of E, but hearing someone else explain helps affirm what I was thinking. Thanks!

[emilysnoddon]

My issue with this question is that the stimulus says obtains funds fraudulently and answer choice E talks about profits that were obtained by writing a book, which I presume is a legal act. Other than that little aspect, I totally understand why E is correct but I felt as though I couldnt pick it because the stimulus was talking about obtaining funds illegally and E was talking about making money on a book after criminal activity had ceased. I was thinking that for all I know the criminal's crime could have been an act that made no profit at all and thus I felt as though the answer choice wouldnt apply. PLEASE clarify this if possible. I really struggled with this question. Thank you!!

[Clay Cooper]

Hi emily,

Thanks for your question.

The reason that answer choice E is right is that being paid to write a book based on one's criminal exploits would constitute profiting by those exploits. The principle outlined in the stimulus is focused on preventing a corporation from profiting by its illegal behavior; the amount of the fine is calculated specifically to prevent such profit.

Answer choice E follows this rule: a convicted criminal should not be able to make money by exploiting his or her illegal activities by writing a book. Though this profit would be less direct than that of the corporation mentioned in the stimulus, it still makes answer choice E the best one.

[Bahar]

I guess I cant understand the difference of the flaw between A and B. To me AC A doesn't mention anything about that large stores are needed for shopping (which is the missing part or the flaw in reasoning) and AC B leaves the other days aside. if not Friday may be any other day. I can get this but I couldn't eliminate AC A.
Can someone explain this?

Thanks

[Adam Tyson]

Hey there Bahar, I think you may have posted this question in the wrong thread. This question from October 2015, section 2, is about corporations committing fraud and being required to relinquish their benefits. It's a Parallel Principle question, not a Flaw question, and there is no mention of stores or days of the week. I did some hunting to try and find the question you referred to, but haven't found it yet. Can you tell us which test this question is from, or what book you found it in? We'll be sure to get on the same page with you and direct you to the correct thread with an explanation!

[a19]

Okay,

So I definitely do not understand how the conditional "writing a memoir about a criminal act" is in any way related to fraudulently getting funds. I think by process of elimination anyone could get to this answer choice. But there are so many books written by convicted criminals; this is not illegal, nor is it even bad. In fact, I am very certain texts of these sorts of narratives are used in public schools across the nation. If the stimulus had said, "If someone committing a crime shortly thereafter writes a memoir about it....", it would fit squarely under the principle of doing something bad or illegal. A convicted criminal has already paid his or her debt to society and writing about their experience is not bad, illegal or fraudulent. Ugh. Sorry this one was frustrating to try to understand

[intent228]

I was hung up on the notion of repayment, that the party in question had already profited, and thus the penalty would need to ensure that we recouped those profits.

With E, it seemed pre-emptive, as though we stopped the criminal from profitting at all, so there was nothing to repay.

[anandamaia]

Okay,

So I definitely do not understand how the conditional "writing a memoir about a criminal act" is in any way related to fraudulently getting funds. I think by process of elimination anyone could get to this answer choice. But there are so many books written by convicted criminals; this is not illegal, nor is it even bad. In fact, I am very certain texts of these sorts of narratives are used in public schools across the nation. If the stimulus had said, "If someone committing a crime shortly thereafter writes a memoir about it....", it would fit squarely under the principle of doing something bad or illegal. A convicted criminal has already paid his or her debt to society and writing about their experience is not bad, illegal or fraudulent. Ugh. Sorry this one was frustrating to try to understand

So I could be wrong, but I see it this way - yes it's not illegal to write a book, the same way that it is not illegal to invest money (going back to Nikki's comment). There are two actions happening: 1) stealing money (illegal), 2) investing money (not illegal). The stimulus suggests that if you are profiting off of action 1 (illegal), you don't get to keep the profits (even if the means by which you are doing it are legal). Also, I think in regards to whether or not the convicted criminal paid for his crime, I don't think it matters because the stimulus doesn't suggest there is a limit to the punishment implemented, only that it will offset *any* profit made using the [illegal action].