ACCT 572 Week 6b Other Types of Fraud Discussion
Legal Recourse (graded)
The IRS has a criminal investigation division that investigates various fraud cases, including those cases involving bankruptcy fraud. How does a bankruptcy case begin, and what percentage of bankruptcy petitions does the IRS estimate contains some kind of fraud? Can you find any bankruptcy fraud cases uncovered by the IRS? How was the fraud uncovered? Were the fraudsters punished? Who prosecutes these cases for the IRS?
(an instructor response)
can you find any notable cases in which IRS CID has been involved?
(an instructor response)
R
these cases can get quite interesting!
(an instructor response)
Chapter 16, Case 13
Lets take a look at Chapter 16, Case 13, on page 590. How do you think these frauds are uncovered? What are the legal remedies for these frauds?
Case 13
After a jury trial, Charles H. and his parents, Charles M. and Helen J. of White Plains, New York, were found guilty on charges of theft of public funds, wire fraud, bankruptcy fraud, and money laundering conspiracy. The charges arose from the familys schemes to defraud and their use of bankruptcy proceedings to further those schemes. Both father and son were convicted of concealing assets from the bankruptcy trustee and creditors and making false statements under penalty of perjury. The father was also found guilty of transferring approximately $489,000 from his brokerage account to an account in the Bahamas in contemplation of bankruptcy, and the mother was found to have engaged in bankruptcy fraud by receiving property in her name to defeat the bankruptcy laws. The White Plains office assisted in the investigation and preparation for the bankruptcy aspects of the trial. If the father was to be prosecuted criminally, what fact would have to hold regarding his transfer of money?
(an instructor response)
What about divorce fraud? What can Sue do in Chapter 16, Case 16, on page 591? Are there any notable cases of divorce fraud?
Case 16
Bill and Sue were college students when they met each other in the library and began dating. After a few short months, they decided to get married. After a time of marital bliss, both Bill and Sue discovered the relationship was not what they had planned. Bill did not like Sues candles and stuffed animals with which she insisted on filling the house, and Sue did not care for Bills habit of spending all his money on the lottery. So, after a few failed attempts at reconciling the marriage, both concluded that divorce would be best. Each agreed to split their assets 5050.
Due to Sues displeasure in seeing lottery tickets cluttering the house, Bill kept most of the tickets inside his desk on campus. A few months before the divorce, one of Bills lottery tickets hit the jackpot, giving him a little under $1 million. Instead of depositing the money into the couples joint account, he hid it by creating a different bank account. Bill never brought up the news to Sue, and the court did not find out about the money during the court proceedings.
1. What type of fraud did Bill commit?
2. What can Sue do about this situation?
(an instructor response)