The Foreign Corrupt Practices Act (FCPA) of 1977 is a U.S. statute with two main components: anti-bribery provisions and accounting (books and records and internal controls) provisions. The anti-bribery provisions prohibit U.S. issuers, domestic concerns, and any person acting within U.S. territory from corruptly offering, paying, promising, or authorizing payment of anything of value to a foreign official, foreign political party, party official, or candidate in order to obtain or retain business or secure an improper advantage. Key elements include: (1) a covered person or entity; (2) a corrupt intent; (3) an offer, payment, promise, or authorization of anything of value; (4) made directly or indirectly (including through third parties with knowledge or willful blindness); (5) to a foreign official; and (6) for a business purpose. The FCPA permits facilitating or 'grease' payments for routine governmental actions and provides affirmative defenses for payments lawful under the foreign country's written law and for reasonable, bona fide expenditures such as travel for product demonstrations. The accounting provisions require issuers to maintain accurate books and records and a system of internal accounting controls. Enforcement is shared by the Department of Justice (criminal) and the Securities and Exchange Commission (civil).

The UK Bribery Act 2010 is broader. It establishes four offenses: (1) bribing another person (active bribery); (2) being bribed (passive bribery); (3) bribing a foreign public official; and (4) a corporate offense of failing to prevent bribery by an associated person. Unlike the FCPA, it covers private-sector (commercial) bribery, prohibits facilitation payments, and does not require proof of corrupt intent for the corporate failure-to-prevent offense, which is strict liability. The only defense to the corporate offense is demonstrating that the organization had 'adequate procedures' in place to prevent bribery, guided by six principles: proportionate procedures, top-level commitment, risk assessment, due diligence, communication and training, and monitoring and review. Jurisdiction extends to any organization carrying on business in the UK, regardless of where the bribery occurs. For CFEs, understanding these distinctions is essential when assessing compliance programs, investigating cross-border corruption, and advising on anti-bribery controls.

In the CFE body of knowledge under The Law Related to Fraud, misrepresentation and concealment of material facts are two of the most common legal theories used to establish fraud. Misrepresentation of material facts, often called fraudulent misrepresentation or deceit, occurs when a person knowingly makes a false statement of fact, intending that the victim rely on it, and the victim does rely on it and suffers damages. The classic elements are: (1) a material false statement, (2) knowledge of its falsity (scienter), (3) reliance by the victim on the false statement, and (4) resulting damages. The statement must concern a material fact, meaning one that would influence a reasonable person's decision; mere opinion, puffery, or predictions generally do not qualify unless the speaker holds special knowledge. The victim's reliance must be justifiable, and the defendant must have intended to induce that reliance.

Concealment of material facts addresses situations where fraud is committed not through an affirmative false statement but through silence or active hiding of information. Concealment becomes actionable when the defendant had a legal duty to disclose, knew the fact was material, deliberately failed to disclose or took steps to hide it, and the victim was harmed by acting without that knowledge. A duty to disclose typically arises from a fiduciary or confidential relationship (such as trustee and beneficiary, attorney and client, or officer and corporation), from statutes or regulations, from partial disclosures that create a misleading impression, or when one party has superior knowledge the other cannot reasonably obtain. Active concealment—such as destroying documents or falsifying records—can be fraud even absent a special relationship.

For fraud examiners, these concepts are essential because they define what the prosecution or plaintiff must prove, guide how evidence of intent, materiality, reliance, and damages is gathered, and distinguish fraud from honest mistakes, negligence, or simple breach of contract.

In the CFE Law section, breach of fiduciary duty is a civil wrong that arises when a person in a position of trust fails to act in the best interests of the party who relies on them. A fiduciary relationship exists whenever one party (the fiduciary) is entrusted with power or discretion over the affairs or property of another (the principal or beneficiary). Common fiduciaries include corporate officers and directors, trustees, agents, partners, attorneys, and employees in positions of confidence. Fiduciary duties are generally divided into two core obligations: the duty of care and the duty of loyalty.

The duty of care requires a fiduciary to act with the diligence, prudence, and skill that a reasonably careful person would exercise in similar circumstances. For corporate directors, this means making informed decisions, attending meetings, reviewing relevant information, and overseeing management. Courts often apply the 'business judgment rule,' which protects fiduciaries from liability for honest mistakes made in good faith after reasonable inquiry, but it does not shield gross negligence, recklessness, or willful inaction.

The duty of loyalty requires the fiduciary to place the interests of the principal above personal interests. It prohibits self-dealing, usurping corporate opportunities, accepting kickbacks or secret commissions, competing with the principal, and misusing confidential information. Undisclosed conflicts of interest are a classic violation and frequently underlie occupational fraud schemes such as bribery and corruption.

A breach of fiduciary duty is proven by showing: (1) a fiduciary relationship existed, (2) the fiduciary breached a duty, and (3) the breach caused damages to the principal. Unlike fraud, intent to deceive is not required; even a negligent breach can create liability. Remedies include compensatory damages, disgorgement of ill-gotten profits, rescission of transactions, constructive trusts, and injunctions. For fraud examiners, establishing a breach of fiduciary duty is often an alternative or complementary theory to fraud, since it can be easier to prove and still allows recovery of losses caused by disloyal or careless insiders.

Mail fraud and wire fraud are two of the most frequently charged federal fraud offenses in the United States and are central to the CFE Law section. Mail fraud, codified at 18 U.S.C. § 1341, makes it a crime to devise or intend to devise a scheme or artifice to defraud, or to obtain money or property by means of false or fraudulent pretenses, representations, or promises, and, for the purpose of executing that scheme, to use the U.S. Postal Service or any private or commercial interstate carrier (such as FedEx or UPS). Wire fraud, codified at 18 U.S.C. § 1343, is the parallel statute covering schemes executed through interstate or foreign wire, radio, or television communications, which courts have interpreted to include telephone calls, faxes, emails, text messages, internet transmissions, and electronic funds transfers. Because wire fraud requires that the communication cross state or national borders, prosecutors must show the interstate element; mail fraud has no such requirement, since the mails are inherently within federal jurisdiction. The essential elements for both offenses are: (1) the defendant knowingly and intentionally devised or participated in a scheme to defraud; (2) the defendant acted with specific intent to defraud; (3) the scheme involved material misrepresentations or omissions; and (4) the defendant used, or caused the use of, the mails or interstate wires in furtherance of the scheme. Importantly, the mailing or wire transmission does not itself need to be fraudulent or essential to the scheme; it is sufficient that it was incident to an essential part of the scheme or a step in the plot. Each separate mailing or transmission can constitute a separate count. Success of the scheme is not required; the attempt is punishable. Penalties include up to 20 years imprisonment per count, increased to 30 years and fines up to $1 million when the fraud affects a financial institution or relates to a presidentially declared disaster. These statutes are powerful tools because they also serve as predicate offenses for RICO and money laundering charges, allowing prosecutors to reach schemes not specifically addressed by other laws.

In the CFE 'Law' section, perjury and conspiracy are two criminal offenses that fraud examiners must understand because they frequently arise in fraud investigations and prosecutions.

Perjury is the act of knowingly making a false statement, under oath or affirmation, about a material matter in an official proceeding. Under U.S. federal law (18 U.S.C. §1621 and §1623), the government must prove that: (1) the defendant was under oath before a competent tribunal, officer, or proceeding; (2) the defendant made a false statement; (3) the statement concerned a material matter (one capable of influencing the outcome of the proceeding); and (4) the defendant knew the statement was false when made. An honest mistake or faulty memory is not perjury. A related offense is subornation of perjury, which is inducing another person to commit perjury. For fraud examiners, perjury is significant because witnesses and subjects may lie in depositions, grand jury testimony, or trials, and because examiners themselves must testify truthfully and accurately. Note also that lying to federal agents outside of sworn proceedings may be charged under 18 U.S.C. §1001 (false statements) rather than perjury.

Conspiracy is an agreement between two or more persons to commit an unlawful act, coupled with at least one overt act in furtherance of that agreement (18 U.S.C. §371). The crime is the agreement itself; the underlying offense need not be completed. Each conspirator is liable for the reasonably foreseeable acts of co-conspirators committed in furtherance of the conspiracy (the Pinkerton rule). Conspiracy charges are valuable to prosecutors because they allow joinder of multiple defendants, extend the statute of limitations until the last overt act, and permit admission of co-conspirators' statements as an exception to the hearsay rule. A conspirator may withdraw only by taking affirmative action to disavow and defeat the scheme. For CFEs, understanding conspiracy helps in mapping the roles of collusive actors in fraud schemes such as kickbacks, bid rigging, and financial statement fraud.