1. 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

2. 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.

3. 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.

4. 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

5. 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

6. 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.

7. 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

8. 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.

9. 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

10. 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.

11. 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

12. 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.

13. 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.

14. 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.

15. 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.

16. 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.

17. 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

18. 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

19. 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.

20. 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).

21. 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.

22. 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.

23. 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.

24. 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.

25. 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.