The following example demonstrates how a net-worth analysis assisted prosecutors

Question

The following example demonstrates how a net-worth analysis assisted prosecutors in amending their complaint against a fraud suspect:

R. Peery, age 40, the executive director of a five-state commission planning a low-level radioactive waste dump, was charged with two new charges of felony theft. Peery was also charged with one federal count of wire fraud.

Peery was accused of wiring $80,000 to a personal account in Georgia, and prosecutors said they suspected him of taking $600,000. He was also charged with two counts of using commission funds in Nebraska to buy cars: a 1990 BMW valued at $67,000, and a 1991 BMW valued at $92,000.

Peery was paid $52,000 annually. He lived in a house valued at $305,000 and at the time of his arrest had six luxury cars, including Jaguars, Mercedes-Benzes, and BMWs.

An affidavit filed in the state case lists transfers totaling $600,000, including the $80,000 mentioned in the federal charge. The affidavit quotes the bookkeeper for the commission as having told the police that various expenditures recorded as legal fees, office supply costs, and other expenses had not been authorized as legitimate commission business.

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Using the information provided, create scenarios for how you would go about performing direct analysis on records provided. Submit your homework here.

Explanation / Answer

Direct Analysis Calculation of amount of fraud by Peery the executive director S.L No Item Amount of fraud 1 Wiring $80,000 to a personal account in Georgia $              80,000.00 2 Prosecutors said they suspected him of taking $600,000- No Fraud since no specific evidence $                             -   3 Using commission funds in Nebraska to buy cars: a 1990 BMW valued at $67,000, and a 1991 BMW valued at $92,000. $            159,000.00 4 He lived in a house valued at $305,000 and at the time of his arrest had six luxury cars, including Jaguars, Mercedes-Benzes, and BMWs- No Fraud since no specific evidence $                             -   5 An affidavit filed in the state case lists transfers totaling $600,000, including the $80,000 mentioned in the federal charge- No Fraud since no specific evidence $                             -   Total $            239,000.00

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