Chapter 18: Legal Follow-Up

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1. Identify important aspects of the court system.
2. Understand the civil litigation process.
3. Understand the criminal litigation process.
4. Describe the nature of an expert witness.

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 State Courts
Can handle nearly every type of case

Generally handle most fraud cases

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 Lower-level trial courts

Handle trials for

Misdemeanors (small crimes)
Preliminaries (pretrial issues)
Below some dollar amount ($10,000)
Some types include
Housing courts
Small claims courts
Probate courts

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 Higher-level trial courts
Handle trials
Above the lower level dollar amount ($10,000)
More serious crimes than those handled in the
lower-level trial courts

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 Appellate Courts
Plaintiffs or defendants who are not satisfied
with the outcomes of trial courts can appeal
court decisions to appellate or reviewing
courts.
Have low- and high-level appellate courts.
Decision made at the highest-level appellate
courts are final.

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 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website in whole or in part.
 Federal Courts
Handle those cases over which the U.S. Constitution or
federal laws give them authority.

Handle court cases that involve federal laws or involve

several states.

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Federal Courts
The federal courts are established to enforce
federal laws and statutes.
Types of federal courts include
Bankruptcy courts
Tax courts

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 Federal Courts
Most fraud cases involving federal laws or statutes
(such as mail fraud, violations of the RICO Act,
banking, and securities regulations) are tried in
Federal Courts.

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 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website in whole or in part.
 Individuals who commit fraud can be prosecuted
criminally, civilly, or both.
Many times, a defrauded company will not pursue
a case in criminal or civil court in order to avoid
additional expenses and negative public
exposure.

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 Criminal vs. Civil Law
Criminal Law:
Involves laws that deal with offenses of a public nature
and are generally considered to be offenses against
society.

Civil Law:
Body of law that provides remedies for violations of
private rights.

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 Most fraud cases follow
four stages:
Investigation and
pleadings

Discovery

Motion practice and

negotiation

Trial and appeal.

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 Investigation and Pleadings
Initial Pleading/Complaint:
Explains the alleged violation of the law and the
monetary expenses or damages sought in the case.

Motion:
An objection to the plaintiffs complaint that the
points out defect of the case and asks for a specific
remedy.

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Remedy:
May include dismissal of all or part of the
original complaint.

Answer:
The response to the complaint that denies or
admits various allegations.

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 Discovery
The legal process by which each partys attorneys try to
gain information about the other sides case before the
trial begins.
Includes:
Production Requests , Interrogatories, Requests for Admission,
Subpoenas, Depositions, Motion Practice and Negotiation

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 Eight steps:
Filing criminal charges
Arresting and charging the defendant
Preliminary hearings
Grand jury
Arraignment
Discovery
Pretrial motions
Trial and appeal

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 Filing Criminal Charges
The victim of the fraud contacts the district attorney
for the county in which the fraud was perpetrated.
The district attorney coordinates with the local
police in the preparation of an arrest warrant or
summons.
If the case involves a federal crime, notice is also
sent to the U.S. Attorneys Office.

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 Arresting and Charging the Defendant
Fourth Amendment:
Requires that probable cause exist before a
defendant is arrested or searched.

Fifth Amendment
Requires an indictment of a grand jury before a
defendant is held for a capital crime (one where the
death penalty or other certain punishments are
possible).

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Fifth Amendment (cont.)
Precludes a person from being tried twice for the
same crime.
Gives the defendant the right to refuse to
incriminate himself or herself.
Requires the state to apply due process of law.
Forbids the state from taking a private partys
property without just compensation.

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 Preliminary Hearings
Purpose is to determine whether probable cause exists to
charge the defendant with a crimenot to establish his or
her guilt or innocence.

Grand Jury
Because a preliminary hearing is an opportunity for the
defendant to obtain discovery of the prosecutions case
without disclosing its evidence, the prosecution generally
prefers to obtain a grand jury indictment.

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 Arraignment
The charges against the defendant are read.
The defendant may plead guilty, not guilty, or nolo
contendere.
A trial is held and bail is set if the defendant pleads
not guilty.
Sentencing follows when the defendant pleads
guilty or nolo contendere.

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 Discovery
Pretrial discovery in criminal trials differs
significantly from that in civil trials.
Pretrial Motions
Two motions that are frequently made include
A request that the charges be dismissed as a matter
of law.
A request to suppress certain evidence because it
was illegally obtained.

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 An expert witness is an
individual who has
unique experience,
education, or training
regarding a subject and
can offer opinions
about it.

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