Assignment
You will be presenting as if you were an expert witness in this case related to your project. Remember, state only the facts as to if you believe fraud (travel, tax, etc.) has or has not occurred and why you believe this based on the evidence and research you have done on this project. – Please write 4 or 5 pages with authorizes sources
PART 1 – CASE 1
Civil Action Nos. 05–cv–01563–EWN–BNB, 05–cv–01903, 05–cv–01707. – Jan. 2, 2007.
Plaintiff: André Andropolis (On Behalf of Himself and All Others Similarly Situated)
Defendants: RED ROBIN GOURMET BURGERS, INC. (Michael J. Snyder, James P. McCloskey, Lisa A. Dahl, Katherine L. Scherping, and Dennis B. Mullen)
Discuss and provide specific examples of the legal and ethical standards relating to this type of fraud
There are many legal and ethical standards that govern the conduct of legal practices as well as the judicial framework. Federal Standard of Civil Procedure Rule mandates that in all averments of fraud or error, the grounds establishing fraud or error shall be specified with specificity in all pleadings of deceitful activity. A compelling case should be made for scienter by detailing the purported fraud’s circumstances, along with the precise misrepresentations or omissions and the grounds for those comments or omissions’ deceptive nature.
Federal Rule of Civil Procedure provides a legal standard allowing the defense (Red Robin Gourmet Burgers INC.) to petition to dismiss the claim if a plaintiff (André Andropolis) fails to articulate a claim upon which remedies can be awarded. Dismissal of a claim is allowed when it seems that the complainant (André Andropolis) cannot prove any set of information to back up the claims which entitles him to remedies, acknowledging the well-pleaded accusations of the dispute as genuine. In the case, scenario, the plaintiffs (André Andropolis and all others similarly situated) claim was dismissed on grounds that he was not able to fully back up his claims. When considering a Rule petition, the court is not looking at proof that the parties might submit at trials, but rather at whether the plaintiff complaint is adequate to articulate a claim for which remedies can be awarded.
The legal standard to keep clients’ information and counsel confidential is crucial to people’s confidence in the judicial process. It builds the parties confidence in the court system and promotes open and honest dialogue between the parties (Duff, 2020). In many nations, unless the parties consents, a lawyer cannot comment about secret discussions between himself and his client. In the travel fraud case, the defendant’s counsel is mandated to keep management team information discreet.
Using the Fraud Theory Approach outlined in your Fraud Examiners Manual, analyze how you would have used this approach in this case and why
The fraud theory should be used by investigators of fraudulent activities due to its significance in assisting investigators to organize and direct investigations based on the data that is available at the moment. It also generates quality outcomes when strictly adhered. This approach requires the investigators to first evaluate the evidence at their disposal, formulate a hypothesis, put the hypothesis to the trial, and, finally, describe and modify the hypothesis.
Based on the case scenario given, I would commence by analyzing data gathered from various sources such as articles and press statements, expert reports, and evidence given by the company’s workers. I would then develop preliminary hypotheses based on the data that has been analyzed. The hypothesis ought to be based on the absolute worst possible outcome. In other words, I would assess the worst-case scenario based on the caller’s comments. In the given case scenario, the worst-case scenario would be that the management misused company and investor funds to pay for personal travel and other expenditures that were unrelated to business. After I have developed a hypothesis, I will need to validate it through the collection of fresh evidence or by the modification and combination of material already at my disposal. If, after putting a hypothesis to the trial, I conclude that the hypothesis cannot be proven, I would then continue to update the hypothesis and put it to the test basing on the evidence available until a conclusion that is reasonable is produced.
Discuss and provide specific examples of how evidence was collected in this case and discuss if you think this was appropriate, why or why not. If you would have collected the evidence in a different manner or from a different source explain what you would have done and why as it specifically relates to this case.
Evidence collection in a case as similar to the André Andropolis vs. Red Robin Gourmet Burgers INC. is much important and require a careful consideration in making sure that there is no accusation without solid supporting information that confirms the securities fraud. The plaintiff (André Andropolis) filed a case against the Red Robins Gourmet Burgers INC. claiming that the company omitted the proxy statement and the editing of the financial information within the organization. The omission of the information as claimed by the plaintiff became difficult to prove because the evidence collection process was improper since more focus was directed to the files and records of omitted data but not focusing on the root cause of the replacement of the staff that were present during the period of the fraud. Failure to involve the individuals that participated in the fraud cases that is supported by the organization management makes the evidence less significant to prove the claims because the mismanagement within an organization might be an internal issue, but the key is to understand the motive. If given the opportunity to collect the evidence, I would make sure that there are the witnesses that are ready to share the information about the fraud that they were part of and in this case are the replaced staff of Red Robins Gourmet Burgers INC. (Michael J. Snyder, James P. McCloskey, Lisa A. Dahl, Katherine L. Scherping, and Dennis B. Mullen). I consider the approach due to its significance in providing the necessary support to the omitted and edited security information that is unethical. However, having the witness confession and testimonies as a source of evidence makes the case stronger and the plaintiff would argue the issue more clearly and have a successful win over the case.
Identify and provide specific examples of the application of the laws that preserve the rights of individuals suspected of committing the fraud, the laws that govern civil and criminal prosecutions and admittance of evidence.
The examples of the laws application in preserving the rights of the suspect that committed crime include the opportunity that was given in defending the case against them and having the right to be heard. The suspect also enjoyed the right to have an attorney that act as the representative in the case and assist in the legal work and procedures. In this case, there was the aspect that the defendant enjoyed the two rights of representation and being heard, and this is important in making sure that the plaintiff (André Andropolis) has the enough evidence that is possible to showcase the defendant as a criminal. There is always the need to provide proof about the accusation of fraud and the defendant used the right to defend the issue in a more and better way that made the case more significant in bringing important evidence and not just a more accusation. In addition, there was the issue of the defendant having the right in cross-examining the witnesses that testified against the defendant and use the chance to dispute their testimony and this right is closer to the fair hearing. All defendants in the court of law enjoy the chance of being heard through a fair hearing where both sides of the defendant (Red Robin Gourmet Burgers INC.) and the plaintiff (André Andropolis) are given the opportunity to offer their evidence about the case that gives the jury the information necessary of making the decisions on the case (Fisch & Gelbach, 2020). The evidence that are used has to be genuine and correct where it should be accurate and not misleading to give a fair justice to the defendant and victim.
Compare and contrast the laws, providing specific examples, that govern civil and criminal prosecutions of fraud suspects in these types of cases.
In civil case, defendants who have been found guilty of wrongdoing may be required to pay damages by the jury. In the case scenario given, the investors wanted to be reimbursed for the losses the business had sustained as a result of the management actions. Losses that may be quantified, such as economic losses, are eligible for compensation (Duff, 2020). Punitive damages may be awarded in some cases. In criminal cases however, judges convicts defendants who has been proven guilty by a jury in a criminal case. Sentencing laws established by the criminal legislation must be followed by the court. Confinement, parole, and/or monetary fines are all possible outcomes in a criminal prosecution.
Cases involving civil laws, such as those involving securities fraud, may on occasion be resolved outside of a court of law, through means such as mediation with a neutral third party. Alternative dispute resolution methods include civil trials and administrative processes. On the other hand, cases involving criminal law can only be heard within the context of the criminal justice system.
Various guidelines are applicable to criminal and civil cases prosecution. In a civil court, a plaintiff (André Andropolis) files a complaint against a defendant (Red Robin Gourmet Burgers INC). The complainant (André Andropolis) bears the burden of proof and must show that the accused is to be blamed for the issue (Duff, 2020). In the case scenario presented, the plaintiffs (investors) were unable to establish that the defendants (management) were to blame for the problem, resulting in the lawsuit being dismissed. The accused is considered to be liable instead of guilty if a jury finds him or her to be accountable. In a criminal court, on the other hand, a person is either freed or proven guilty beyond a reasonable doubt. The federal government must demonstrate beyond a reasonable doubt that the defendant executed the offense.
Nearly every civilization, economic system, business sector, and industry, as well as field of work, have experienced some form of employee travel fraud. There are three reasons that always exist for employee fraud to take place: pressure, opportunities, and rationalization (Sumrell-Benitez, 2017).
For that reason, I will analyze some travel expenses by IDEA software to achieve to know if travel expenses are submitted only once, expenses are for business travel and airfares charged are reasonable, and tickets purchased are used by the employee (not cashed in).
The audit date will be 1/1/2023 to 12/31/2023.
In the following reports, I will determine if the expense reports are submitted once and are properly authorized. Also, I will detect duplicate expenses, unmatched expenses, nonbusiness transactions, and suspicious payees.
Answers: Travel Section
2.a. Perform a Duplicate Key Detection test (under Analysis) using the keys DATE, EXPTYPE, AMOUNT. Output duplicate records. Index the resulting databases on “AMOUNT” in descending order. Name the result “Duplicate Expenses”. Discuss the items you would conduct further tests on and why they appear suspicious.
These are the expenses we have a duplicate in the database for more than 500 expenses. Just 50 are duplicated under different categories, for example:
• Airfare for $584.40 on 05/23/2022 with destination Washington
• Hotel for $215.57 in May and July in San Francisco City, and the vendor Argent
• Dinner for $35 and $28 in May in local and hotel restaurants
• Internet for $14.95 in May in San Francisco
• Mileage for $14.18 in May in TVR
– Important Note: Most of the duplicate expenses were in May 2023 in different categories. As a professional, I consider it necessary to do a review in this moth.
2.b. Make sure the Expense Reports April 25 23 through Dec 31 23 is the active file. Perform a summarization on EXPTYPE and include the AMOUNT, statistics: Sum, Average. Call your file “Exp Report Sum by Type with Average”. Discuss any examples of car rentals and mileage that took place on the same day (which might be an indicator of double-billing).
The first picture is the summary of the database of the amounts, and the second picture show which billings are duplicate for Milage, on May 23rd and May 26th, for $14.18.
2.c. Make sure the Expense Reports file is the active file. Perform an extraction EXPTYPE = “Airfare” (note that airfare is generally the highest avg dollar). Name the resulting file “Expenses Airfare”.
The following picture shows airfare expenses by vendor, city, dates, and amount.
– Important Note: We can see some expenses duplicate for example, 06/27/2023 and 11/07/2023 for $ 218.40
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