Sam’s Electronics Universe has discovered and investigated a kickback fraud
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Sam’s Electronics Universe has discovered and investigated a kickback fraud perpetrated by its purchasing agent. The fraud lasted eight months and cost the company $2 million in excess inventory purchases. The perpetrator personally benefited by receiving kickbacks of $780,000. Your boss wants to seek restitution of what the company has lost, but is worried about the ramifications of a trial and its effect on your company’s image in the market. She is trying to decide if she should pursue remedies through a civil trial, or turn the case over to the district attorney to prosecute the perpetrator criminally. Pair up with somebody and choose sides. Discuss the pros and cons of each approach of legal follow-up to fraud. |
Here is a tip:
The federal law articulates the procedure for legal proceedings to be employed during a fraud.
Explanation
The two legal follow-up options to the plaintiff are civil suits and criminal suit. Both of the suits have their ills and benefits:
Side 1: Civil suits are filed for disputes between two parties for their rights and duties. It is suitable to file civil suits as most of the civil cases settle before the trial. The entities may avoid a public slander of their image.
Side 2: Criminal suits, on the other hand, result in harsh punishments including jail-terms. Court officers and law enforcement authorities are involved in criminal prosecutions and are the best way to set an example for the employees who may be potential fraudsters.
Verified Answer
Side 1: Company S has the option to sue the purchasing agent with civil charges. In the given case, as the company wants to seek restitution for the damages due to fraud, it is beneficial to file a civil suit.
Side 2: The other option is to sue the purchasing agent criminally. This may result in a jail sentence. Criminal suits are beneficial as the entity may set an example to the employees who may be potential fraudsters.
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