Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Fraud Examination, 4E Chapter 18: Legal Follow-Up

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Learning Objectives  Identify important aspects of the court system.  Understand the civil litigation process.  Understand the criminal litigation process.  Describe the nature of an expert witness.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Court System  State Courts  Can handle nearly every type of case.  Governed by:  The U.S. Constitution  The state’s constitution  The state’s laws Generally handle most fraud cases.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Court System  State Courts—Lower-level trial courts  Handle trials for:  Misdemeanors (small crimes)  Preliminaries (pretrial issues)  Below some dollar amount ($10,000)  Some types include…  Housing courts  Small claims courts  Probate courts

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Court System  State Courts—Higher-level trial courts  Handle trials for/having:  Above the lower level dollar amount ($10,000)  More serious crimes than those handles in the lower- level trial courts

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Court System  State Courts—Appellate Courts  Plaintiffs or defendants who are not satisfied with the outcomes of lower or higher trial courts can appeal court decisions to appellate or reviewing courts.  Have low- and high-level appellate courts.  Decision made at the high-level appellate courts are final.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Organization of State Courts

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Court System  Federal Courts  Handle cases the U.S. Constitution or federal laws give authority.  Handle court cases that involve federal laws or include several states.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Court System Federal Courts  The federal courts are established to enforce federal laws and statutes.  Types of federal courts include:  Bankruptcy courts  Tax courts

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Court System  Federal Courts  Most fraud cases involving federal laws or statutes (such as mail fraud, violations of the RICO Act, banking, and securities regulations) are tried in Federal Courts.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Organization of Federal Courts

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Civil and Criminal Fraud Trials  Individuals who commit fraud can be prosecuted criminally, civilly, or both.  Many times, a defrauded company will not pursue a case in criminal or civil court in order to avoid additional expenses and negative public exposure.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Civil and Criminal Fraud Trials  Criminal vs. Civil Law  Criminal Law:  Involves laws that deal with offenses of a public nature and are generally considered to be offenses against society as a whole.  Civil Law:  Body of law that provides remedies for violations of private right.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Civil Litigation Process  Most fraud cases follow four stages:  Investigation and pleadings  Discovery  Motion practice and negotiation  Trial and appeal.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Civil Litigation Process  Investigation and Pleadings  Initial Pleading/Complaint:  Explains the alleged violation of the law and the monetary expenses or damages sought in the case.  Motion:  An objection to the plaintiff’s complaint that the points out defect of the case and asks for a specific remedy.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Civil Litigation Process Remedy: May include dismissal of all or part of the original complaint. Answer: The response to the complaint that denies or admits various allegations.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Civil Litigation Process  Discovery  The legal process by which each party’s attorneys try to gain information about the other side’s case before the trial begins.  Includes:  Production Requests, Interrogatories, Requests for Admission, Subpoenas, Depositions, Motion Practice and Negotiation

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Criminal Litigation Process  Seven steps:  Filing criminal charges  Arresting and charging the defendant  Preliminary hearings  Arraignment  Discovery  Pretrial motions  Trial and appeal

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Criminal Litigation Process  Filing Criminal Charges  The victim of the fraud contacts the district attorney for the county in which the fraud was perpetrated.  The district attorney coordinates with the local police in the preparation of an arrest warrant or summons.  If the case involves a federal crime, notice is also sent to the U.S. Attorney’s Office.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Criminal Litigation Process  Arresting and Charging the Defendant  Fourth Amendment:  Requires that probable cause exist before a defendant is arrested or searched.  Fifth Amendment  Requires an indictment of a grand jury before a defendant is held for a capital crime (one where the death penalty or other certain punishments are possible).

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Criminal Litigation Process Fifth Amendment (cont.)  Precludes a person from being tried twice for the same crime.  Gives the defendant the right to refuse to incriminate him- or herself.  Requires the state to apply due process of law.  Forbids the state from taking a private party’s property without compensation.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Criminal Litigation Process  Preliminary Hearings  Purpose is to determine whether “probable cause” exists to charge the defendant with a crime—not to establish his or her guilt or innocence.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Criminal Litigation Process  Arraignment  The charges against the defendant are read.  The defendant may plead guilty, not guilty, or nolo contendere.  A trial is held and bail is set if the defendant pleads not guilty.  Sentencing follows when the defendant pleads guilty or nolo contendere.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Criminal Litigation Process  Pretrial Motions  Two motions that are frequently made include:  A request that the charges be dismissed as a matter of law.  A request to suppress certain evidence because it was illegally obtained.

Albrecht, Albrecht, Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Nature of an Expert Witness  An expert witness is an individual who has unique experience, education, or training regarding a subject and can offer opinions about it.