Discussion Question

1. State courts are organized hierarchically, typically with trial courts at the lowest level, followed
by appellate courts, and the highest level being the state's supreme court.

2. Federal courts are organized with district courts as the trial level, followed by circuit courts of
appeals, and the United States Supreme Court at the top.

3. The main difference between civil and criminal fraud trials is the nature of the allegations.
Civil fraud trials deal with disputes between parties, often seeking financial remedies, while
criminal fraud trials involve the prosecution of individuals or entities for violating criminal laws.

4. The civil litigation process typically involves stages such as filing a complaint, discovery, pre-
trial motions, trial, and potential appeal.

5. An interrogatory is a written set of questions used in the discovery process to gather

information from the opposing party in a legal case.

6. A deposition is a pre-trial testimony taken in a less formal setting, subject to court rules and
regulations, where witnesses are questioned under oath.

7. Depositions are powerful tools for obtaining information because they allow thorough and
direct questioning of witnesses, helping to assess their credibility and gather evidence for the
case.

8. A fraud investigator attending the deposition of opposing experts can benefit by

understanding the opposing side's strategies and gathering valuable information that can be
used to build a stronger case.

9. The criminal litigation process typically involves steps such as arrest, initial appearance,
arraignment, pre-trial hearings, trial, and potential appeals.

10. Discovery is the process in which parties in a legal case gather and exchange information,
including documents, interrogatories, depositions, and more.

11. Fraud examiners can be used as expert witnesses in court cases to provide their
professional opinions on fraud-related matters, such as analyzing financial records, investigating
fraudulent activities, and offering expert testimony.

12. The purpose of having a fraud investigator or another expert witness provide testimony in a
trial is to offer their specialized knowledge and opinions to assist the court in understanding
complex issues related to fraud or financial wrongdoing.

13. Dos and don'ts of being an expert witness include being honest and impartial, preparing
thoroughly, and avoiding speculative statements or emotional responses.
14. An expert witness can testify about various fraud-related topics, including fraud detection,
financial analysis, forensic accounting, and the interpretation of complex financial data.

15. During a deposition, an expert witness should display a professional and composed posture,
answer questions clearly and concisely, and avoid becoming confrontational or argumentative.

SHORT CASES

Case 1

Mr. Pringles is not worried about Mr. Bill's discovery because he knows that Mr. Bill did not
obtain the evidence legally.Mr. Bill searched Mr. Pringles' personal residence without a warrant,
which is a violation of the Fourth Amendment to the United States Constitution. The evidence
obtained through this illegal search is inadmissible in court.

Case 2

1. As the employer, I would seek a civil action against the bond trader for breach of
fiduciary duty and fraud. He violated my trust and caused me financial harm.
2. The case would most likely be assigned to a state court because the alleged fraud
occurred within the state.

Case 3

The Cendant case is in the pre-trial stage of the criminal litigation process. The SEC has filed
charges against the seven top executives, but the trial has not yet begun.

Case 4

A fraud investigator can add value in the following ways:

● Investigation: The investigator can gather evidence of the fraud, interview witnesses,
and identify the perpetrators.
● Legal follow-up: The investigator can work with the prosecuting attorney to prepare for
trial and present the evidence in a clear and convincing manner.
● Implementation of controls: The investigator can recommend changes to the
company's internal controls to prevent similar frauds from happening in the future.

Case 5

O.J. Simpson was acquitted of criminal charges in the death of his wife, Nicole Simpson, but he
was found liable for her wrongful death in a civil lawsuit. This is because the burden of proof in a
civil lawsuit is lower than in a criminal trial. In a civil case, the plaintiff must only prove that the
defendant is more likely than not to have committed the wrong. In a criminal case, the
prosecution must prove beyond a reasonable doubt that the defendant is guilty.

Case 6
The receiving clerk should be fired for theft. He violated the company's policies and procedures
and caused financial harm to the company. The nepotism of the other manager should not be a
factor in this decision.

Case 7

1. As a partner for the XYZ accounting firm, I would recommend that the firm appeal the
verdict. The firm has a strong case that the evidence against it was obtained illegally.
2. As the prosecuting attorney, I would object to the admission of the photocopied bank
statements. The opposing party should be required to produce the original bank
statements, or the photocopies should be excluded from evidence.

Case 8

As an expert witness, my role will be to help the jury understand the complex financial
transactions involved in the alleged fraud. I will testify about the fraud scheme and how it was
used to steal money from the corporation. I will also testify about the impact of the fraud on the
corporation and its shareholders. I will be most involved in the case during the discovery and
trial phases.

To assist the prosecution as much as possible, I will:

● Work with the prosecution team to develop a case strategy.

● Review the evidence and identify any potential weaknesses.
● Prepare testimony that is clear, concise, and easy to understand.
● Be prepared to answer questions from the opposing attorney during cross-examination.

Case 9

Bobby Jones will go through the following stages of civil litigation:

● Complaint: ABC Corporation will file a complaint with the court alleging that Bobby
Jones committed fraud.
● Answer: Bobby Jones will file an answer to the complaint denying the allegations.
● Discovery: Both sides will exchange information and evidence.
● Pre-trial motions: Both sides may file motions with the court seeking to exclude
evidence or dismiss the case.
● Trial: If the case goes to trial, a judge or jury will decide whether Bobby Jones is liable
for fraud.
● Judgment: If Bobby Jones is found liable, the court will enter a judgment against him
awarding ABC Corporation damages.

Case 10

1. Yes, John may have grounds for appeal. The Fourth Amendment protects people from
unreasonable searches and seizures. If the investigators did not have probable cause to
search John's computer, the evidence obtained from the search may be inadmissible in
court.
2. Whether or not John's rights were violated depends on the specific circumstances of the
case. If the investigators had probable cause to search John's computer, the search was
 legal and his rights were not violated. However, if the investigators did not have probable
cause, the search was illegal and his rights may have been violated.

Case 11

Yes, the FBI's request to OHS Manufacturing could be a possible violation of the Fourth
Amendment. The Fourth Amendment protects people from unreasonable searches and
seizures. Employers do not have the same authority as the government to search their
employees' belongings. If OHS Manufacturing searched the employee's locker without his
consent, the search may have been illegal.

Case 12

1. Here are some reasons why Turley Bank might not pursue a civil case against Mr. Oaks:
● The cost of litigation could be high, and the bank may not be confident that it would win
the case.
● The bank could suffer negative publicity if the case goes to trial and it is revealed that
Mr. Oaks was able to circumvent internal controls to commit fraud.
● The bank may be reluctant to pursue a civil case against a former CEO, even if he
committed fraud, in order to protect its reputation.
2. Here are some reasons why Turley Bank might settle out of court before the actual trial:
● Settling out of court would be less expensive and time-consuming than going to trial.
● Settling would avoid the negative publicity that could result from a trial.
● Settling would allow the bank to recover some of the money that was lost to fraud, even
if it is not the full amount.
3. Here are some reasons why Mr. Oaks might settle out of court before the actual trial:
● Mr. Oaks may be facing criminal charges for the fraud, and settling the civil case could
help him get a lighter sentence.
● Mr. Oaks may not be able to afford to go to trial, and settling would allow him to avoid
the financial burden of litigation.
● Mr. Oaks may be concerned about the negative publicity that could result from a trial.

Case 13

1. Here are some things that the expert witness did well:
● He was composed and confident during his testimony.
● He was able to provide detailed explanations of the complex financial transactions
involved in the fraud.
● He refused to answer questions that were outside of his area of expertise.
2. Here is one thing that the expert witness could have done better:
● He should have avoided arguing with the opposing attorney during cross-examination.

Case 14

1. Here are three characteristics of a grand jury:

● A grand jury is a group of citizens who are convened to determine whether there is
probable cause to believe that a crime has been committed.
● Grand jury proceedings are secret.
● Grand juries have the power to subpoena witnesses and documents.
2. Here are three dos and don'ts that an expert witness should keep in mind during cross-
examination:
 ● Do: Be prepared to answer questions about your qualifications and the basis for your
testimony.
● Do: Be honest and objective in your testimony.
● Do: Be respectful of the opposing attorney and the court.
● Don't: Argue with the opposing attorney.
● Don't: Speculate or give opinions that are not based on your expertise.
● Don't: Answer questions that you don't know the answer to.
3. a. Depositions are sworn statements that are taken outside of court. b. Depositions are a
powerful tool in obtaining evidence because they allow attorneys to gather testimony
from witnesses without having to go to trial. c. The other three stages of civil litigation
are:
● Pleadings: The parties exchange pleadings, which are documents that outline their
legal claims and defenses.
● Discovery: The parties exchange information and evidence.
● Trial: If the case does not settle out of court, it will go to trial. A judge or jury will decide
whether the defendant is liable and, if so, how much money the defendant owes the
plaintiff.

CASE STUDY

Question 1

John Rigas may have rationalized his dishonest use of company assets in a number of ways.
For example, he may have believed that he was entitled to the money because of his hard work
and success. He may have also justified his actions by reasoning that he was only taking what
was rightfully his. Additionally, he may have rationalized his behavior by believing that he was
not harming anyone, or that the company could afford the losses.

Question 2

Other ways that people rationalize fraudulent behavior include:

● Blaming others: People may rationalize their fraud by blaming others, such as their
employer, their spouse, or their circumstances.
● Denying wrongdoing: Some people may simply deny that they are doing anything
wrong, even when presented with evidence to the contrary.
● Minimizing the impact: People may rationalize their fraud by minimizing the impact of
their actions, or by believing that they are only "borrowing" the money and will pay it
back later.
● Justifying the means by the end: Some people may believe that fraud is justified if it
leads to a good outcome,such as helping their family or friends.

Question 3

Owning and operating a family business can create temptations and opportunities to commit
fraud in a number of ways.For example, family business owners may have more control over
the company's finances and records, making it easier to conceal fraud. They may also be less
likely to be scrutinized by external auditors or other oversight bodies. Additionally,family
members may feel more pressure to protect the business, even if it means engaging in illegal or
unethical behavior.

Question 4

Based on the facts of the case, it is likely that this case led to both civil litigation and criminal
prosecution. Adelphia's shareholders may have filed a civil lawsuit against the Rigas family to
recover their losses. Additionally, the Rigas family members may have faced criminal charges
for fraud, embezzlement, and other crimes.

Question 5

If I were an expert witness in this case, I would pay special attention to the following facts:

● The company's cash management system and how it was used to conceal fraud
● The false transactions and phony companies that were created to inflate earnings and
hide debt
● The Rigas family's personal spending habits and how they were funded
● The company's financial statements and how they were manipulated to mislead
investors