Forensic Accounting – Frauds and Statutory Laws
This assignment will prepare you for reading and understanding statutory laws that pertain to fraud. Learning to read statutory law is important in an accounting career to avoid unethical behavior.
For your first written assignment you will assume you are the judge in the following case.
The defendant, a first time offender, has been convicted by a jury of running a telemarketing scam over the telephone and by using e-mail. The scammer promised elderly people over age 55 that if they invested in his environmentally clean energy generation company, which he claimed was the latest technology; they would be guaranteed to receive a reduction in their electric bill, become a 3% owner in the company, and receive an annual dividend from the company. The con artist acted alone and scammed 5,000 elderly victims within the United States out of $5,000,000 dollars. After receiving an e-mail brochure from the defendant on the bogus company, the victims made an initial investment of $1000 each. No one received a reduction in their electric bill and the company never existed, so there was no ownership interest or dividends.
As the judge, you will be preparing a sentencing report for the defendant. Give the defendant a name and make up anything else that you think is useful for your report.
In order to prepare the report, you must first read the federal statutes on wire fraud (18 U.S.C. § 1343) and enhanced penalties for violation of 18 U.S.C. § 1343 (18 U.S.C. § 2326)
Make note of the possible penalties for the crime described above. Both statutes provide you with that information.
Next, you will read and work with a small portion of the Federal Sentencing Guidelines to gain a basic understanding of how the Guidelines are applied by the judiciary by doing the following:
1. Open the Federal Sentencing Guidelines.
Note: The Federal Sentencing Guidelines were amended by Congress in 2015, including some of the provisions that we will be using; but, these amendments have not yet been included in the Guidelines Manual, so please use the material at the link provided, as you are learning the process the judge must use. Thus, the existing provisions are still applicable for this assignment.
2. Click View Individual Chapters and Guidelines in HTML. On the Federal Sentencing Guidelines home page, you'll also see an option to open a PDF version.
3. Scroll down to CHAPTER TWO PART B – Basic Economic Offenses. Below Theft, Embezzlement, Receipt of Stolen Property, Property Destruction and Offenses Involving Fraud or Deceit, click on the link for §2B1.1.
4. You will be working with subsections (a) and (b). Under subsection (a), determine the base points. It will be either 7 or 6 points. You need to determine this based on the penalties under the statutes you read and the facts of the case.
5. Under subsection (b), calculate points under (b)(1) and (b)(2).
6. Once you have a total for all of your points (this is your "Offense Level"), go back to the opening page for the Guidelines. Scroll down, and click on Fine Table (for Individual Defendants). Based on the Offense Level jot down the maximum and minimum fines you could impose on the defendant.
7. Now, prepare a sentencing report that imposes a fine and a prison sentence that falls within the minimums and maximums that you calculated. You should discuss how you arrived at the minimums and maximums you are considering. Once you have arrived at the actual sentence you want to impose, justify the reasons for your sentence. Consider some of the cases in your readings and the facts of the case in making your decision.
8. Make sure you fully support your decision.
It is not always easy to be a judge!
There is no page limit for this assignment. You must complete all of the requirements, so you are likely to end up with about two pages, excluding your title and reference page. APA formatting requires a title and reference page, so make sure you include these.