Accounting/Business Law Class 1. Which of the following statements is false? a.

Question

Accounting/Business Law Class

1. Which of the following statements is false?       

              a. The term "financial institution" as defined by the Bank Secrecy Act includes not only banks, but car dealers and travel agencies as well.

      b. Financial institutions are allowed to share customer information with one another.

       c. Baker owns a U.S. corporation. Approximately 20% of his sales occur in Australia. To avoid paying taxes on these overseas funds, the money is sent directly from Australia to a bank account in the Cayman Islands. The overseas account is in Baker's name, not the corporation, and he is a signatory on the account. The account balance is approximately $75,000. Baker is required to file a Report of Foreign Bank and Financial Accounts.

     d.. Baker sells illegal drugs in California. He takes the proceeds of the sales and drives to Texas where he launders the money through a restaurant his brother owns. If caught, Baker may be charged with violating the Lanham Act.

Explanation / Answer

Answer a. False - The term "financial institution" includes: banks; securities brokers or dealers; casinos subject to the Bank Secrecy Act; money transmitters, check cashers, currency exchangers, and money order issuers and sellers subject to the Bank Secrecy Act.

Answer b. True

Answer C. True - Baker had to file a report of foreign bank and financial institution as it's transaction exceeds the limit of $10000.

Answer d. False - He will also charged for selling the drugs,

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