Which action might be used to conceal a sham loan transaction by disguising the true purpose?

Which action might be used to conceal a sham loan transaction by disguising the true purpose?

• A. Turn the loan over to a collections agency
• B. Let the loan go into arrears
• C. 'Digging' the loan on the books
• D. Double-count the loan in profits

Answer: (C)

The main idea is concealing a fraudulent loan by manipulating how it’s recorded. “Digging” the loan on the books means adjusting ledger entries or classifications so the transaction looks like a genuine loan, masking the true, sham nature behind an appearance of legitimacy. This kind of concealment focuses on the reporting and presentation of the loan, which is exactly what disguises the real purpose from auditors and observers. The other actions would surface problems or misstate results rather than hide what the loan really is—transferring to collections, letting it go into arrears, or double-counting profits would each reveal or distort different aspects of the transaction rather than conceal its underlying intent.

The main idea is concealing a fraudulent loan by manipulating how it’s recorded. “Digging” the loan on the books means adjusting ledger entries or classifications so the transaction looks like a genuine loan, masking the true, sham nature behind an appearance of legitimacy. This kind of concealment focuses on the reporting and presentation of the loan, which is exactly what disguises the real purpose from auditors and observers. The other actions would surface problems or misstate results rather than hide what the loan really is—transferring to collections, letting it go into arrears, or double-counting profits would each reveal or distort different aspects of the transaction rather than conceal its underlying intent.