If a corporation obtains funds fraudulently, then the penalty should take into account the corporation's use of those...

yckim2180 on June 22, 2020

Totally lost

How could E possibly be the right answer?

Create a free account to read and take part in forum discussions.

Already have an account? log in

shunhe on June 23, 2020

Hi @yckim2180,

Thanks for the question! So let’s take a look at the stimulus here. We’re being told that if a corporation gets funds via underhanded methods, then the penalty should include profits made off of those funds. So maybe a bad corporation got $100k of fraudulent funds initially. But them it invested them and made $200k in profits. Then the penalty shouldn’t be limited to the original $100k; it should also include the $200k of profits. This is the principle being espoused in the stimulus, and now we need to find an answer choice that’s most like it.

Now take a look at (E). Here, a convicted criminal writes a book about their crime and makes money off of it. So this is like a criminal doing something bad initially, and then getting more profit off of it, similar to the company doing something bad initially, and then getting more profit off of it. And then (E) says that proceeds of the book should be donated to a charity chosen by a third party. So similarly, profits from doing the bad thing shouldn’t go towards the criminal, even if they’re downstream effects. Since this matches the stimulus’s principle, we can pick (E) as the correct answer.

Hope this helps! Feel free to ask any other questions that you might have.

Alex-Mansour on January 3, 2022

Hello, I had the exact same question. My issue is that I saw E matched, but I interpreted the passage as referring to corporations explicitly. Why is this not the case in E who is a convicted criminal?

Ravi on February 11, 2022

This is a principle question, so we're looking for an answer choice that conforms most closely to the principle in the stimulus. As such, it's ok that E is talking about a convicted criminal, whereas the stimulus is discussing a corporation. The reason it's ok is because the fundamental principle fits both situations. With E, if the money from book sales are donated to a charity chosen by a third party, this would mean that the criminal would not receive the benefits from committing the crime and then going on to write a book about it.

The basic principle in the stimulus is about the idea of not letting an organization/someone gain benefits that stem from some sort of violation. That's why E is correct.