Bobby was a $30-$year$-$old high$-$school graduate who wanted a bank loan, but he didn$$t think

he would be approved based on his credit history and current unemployment. He decided to

secure a loan using a non$-$traditional method.

Bobby worked with a crime syndicate to obtain forged documents $($an income tax return and a

company letter$),$ and presented them to the bank with his loan application. The loan officer

reviewed and accepted the documents, and Bobby was approved for a large, unsecured loan and

issued a checkbook. Immediately, he wrote a check to the syndicate for $30$ percent of the total

available loan amount.

When Bobby defaulted on his loan repayment, the loan officer called the employer, only to

discover the phone number routed to a secretarial company. The company provided answering

services and a mailing address for companies. Bobby did not work there.

The bank launched an investigation and all $50$ of the perpetrators of the crime syndicate were

identified. The police set up a sting and arrested Bobby when he came into the bank to get

another checkbook. Bobby was convicted in criminal court and sentenced to $36$ months in jail.

The other members of the syndicate all faced charges in criminal court. The bank recovered

less than $50$ percent of the total loss, equaling USD $500,000.$

Questions

$1.$ What fraudulent activities did Bobby and his partners commit?

$2.$ What steps could bank personnel have taken to prevent this scheme?