Fraud FINAL

federal courts handle cases

- over which the constitution or federal courts give them authority- that involve federal laws or involve parties in diff states (diversity jurisdictions)

corruption

any scheme in which a person uses his or her influence in a business transaction to obtain an unauthorized benefit contrary to that person's duty to his or her employer

types of fraud schemes include

- bribery- conflict of interest - illegal gratuities - extortion

bribery

any scheme in which a person offers, gives, receives, or solicits sth of value FOR THE PURPOSE OF INFLUENCING an official act or business decision without knowledge/consent of the principal

commercial bribery vs official bribery

- in CB, the bribe is to influence a business decision.- in OB, bribe is to influence decisions of gov officials or agents

bribery schemes can be

- kickbacks - bid-rigging schemes

kickbacks are

undisclosed payments made by vendors to employees of purchasing companies

bid-rigging schemes

when an employee fraudulently assists a vendor in winning a contract through the competitive bidding process

conflict of interest

any scheme where an employee/manager/executive has an undisclosed economic or personal interest in a transaction that adversely affects the company as a result

Illegal gratuities

any scheme where a person offers, gives, receives or solicits sth of value for, or BECAUSE OF, an official act or business decision without the knowledge/consent of the principal

Example of illegal gratuities

manager is influenced to make a financial decision based on undisclosed gifts or awards

extortion

the coercion of another to enter into a transaction or deliver property based on wrongful use of actual/threatened force, fear, or economic duress

State courts

- handle most fraud cases- handle most legal cases in the US

How are state courts organized?

- lower level trial courts- higher level trial courts- appellate courts

lower level trial courts

- courts of limited jurisdiction- try misdemeanors and pretrial issues involving < $10,000- eg. housing courts, small claims court, etc

higher level trial courts

- trial courts of general jurisdiction- sits in a panel of 2 or 3 judges- try felony or civil cases > $10,000

appellate courts

- courts that do not try criminal cases but hear appeals of decisions of lower courts- highest level appellate court is the state supreme court- sit in a panel of 3 to 9 judges

federal courts include

- bankruptcy courts- tax courts

civil law

body of law that provides remedies for violations of private rights- deals with rights and duties between indiv & orgs

the purpose of a civil lawsuit is

to compensate for harm done

criminal law

involve laws that deal with offenses of a public nature and are generally considered to be offenses against society

in criminal cases,

- prosecution is by gov, not an indiv- perpetrators serve jail sentences, pay fines and restitution to victims

in criminal cases,

- to be convicted, proof of guilt "beyond a reasonable doubt" is required- juries (12) rule unanimously on guilt for perpetrator

in civil cases,

- jurors can be as few as six- verdict doesn't have to be unanimous- often heard by judges instead of juries- proof of "preponderance of evidence" is required

preponderance of the evidence

evidence supporting the plaintiff must only be slightly more than any evidence supporting the defendant

civil law

laws that provide remedies for violations of private rights (damages and injunctions)

criminal law

- laws that punish bad acts (fines and prison)- malum in se (bad in and of themselves)- malum prohibitum (public welfare offenses)

Civil litigation process involves four stages

- investigation and pleadings- discovery- motion practice and negotiation- trial and appeal

criminal litigation process involves 8 stages

1) investigation2) filing criminal charges3) arresting and arraigning the defendant4) probable cause showing- preliminary hearings- grand jury and indictment5) discovery6) pretrial motions7) plea negotiations8) trial and appeal

discovery

a legal process in which each party's attorneys are permitted to obtain info about the other side's case before the trial begins- includes interrogatories, subpoenas, depositions, etc

what led to the creation of federal sentencing guidelines (1984)?

disparities in sentencing for similar offenses

sentencing under the guidelines are made by

- cross referencing the base offence with the defendent's criminal history- creating a system of points on a matrix

adjustments to the score are

made based on aggravating or mitigating factors that can have significant impact on the ultimate sentence

creation of the federal guidelines has

dramatically impacted the willingness of defendants to go to trial in the federal system

during discovery, expert witnesses

write reports setting out their qualifications, opinions, and underlying basis for their opinion

who decides if expert testimonies are allowed?

judges

opposing parties are allowed to

depose expert witnesses to test their qualifications and basis for opinion

standards that determine whether an expert is allowed to render their opinion

United States v FyreDaubert v Merrill Dow Pharmaceuticals, Inc

what can standards do?

determine the outcome of a case

Mail Fraud

An act of fraud using the Postal Service, as in making false representations through the mail to exploit another party.

Racketeer Influenced and Corrupt Practices (RICO) Statute

an offense for a person/enterprise engaging in interstate commerce to conduct the affairs of the enterprise through a "pattern of racketeering activity

Racketeering example

a criminal activity in which a person or organization engages in a "racket." A racket is when the criminal creates a problem for others for the purpose of solving that problem by some type of extortion.

Foreign Corrupt Practices Act (1977)

This law outlaws bribery of foreign officials by US companies for business purposes

Frauds connected to the FCPA

- RICO statute- Wire & Mail Fraud- Travel Act

travel act

criminal statute which forbids the use of the U.S. mail, or interstate or foreign travel, for the purpose of engaging in certain specified criminal acts

wire fraud

a crime in which a person concocts a scheme to defraud or obtain money based on false representation or promises. This criminal act is done using electronic communications or an interstate communications facility

Two key distinctions in Frye

impact the use of experts: education (PhD) and whether the opinion is generally accepted in the field

Under Frye,

The opinion must be based on research that has been peer reviewed and accepted by the balance of the academy

Under Daubert, what determines acceptability for expert testimony?

- Whether the theory or technique used by the accounting expert can be or has been tested- Whether the theory or technique has been subjected to peer review and publication- The known or potential rate of error of the method used- The degree to which the method or conclusion has been accepted within the relevant community- Whether the theory existed before litigation began