The Amigito Insurance Agency (continued from chapter 9) Jason remembered something that Bruce had said on the phone. "Don't be fooled by the looks of Matilda's office. Jason understood Bruce's admonition when they pulled into the small strip mall that housed Matilda's store- front office. On one side of her office was the Lucky Golden Pawn shop. On the other side was Fast Pay Check Cashing. Jason parked directly in front of the large plate-glass window that had been painted black from the inside. A small neon sign in the lower-right part of the window said "Attorney." Matilda appeared to be in her late 60s, or even older. But despite her age, and her jeans and cowboy shirt, her face bore the look of a hardened attorney, something that he had seen many times before. They sat in the center of the room at a large conference table. She pushed aside a pile of papers and began the meeting. "You have to crack an egg before you can fry it," she said. "And that's exactly what we are going to do in this case. I'm going to crack the egg, and then Bruce is going to fry it." Jason didn't understand but felt assured by her matter-of-fact tone of voice. Bruce turned to Jason as he brought up the employment contracts. "The son has no expectation of privacy," he said. "So, your job is to spy on him. Find out everything that you can. Wait until he's not in the office and check out everything on his computer." She explained that she had contacted the attorney for the other victim who currently had a case open in court. The victim was broke and couldn't pay attorney's fees, and the case was going nowhere. She explained her strategy. She had persuaded the other victim's attorney to immediately file a Chapter 11 bankruptcy via ECFS. She laid out her plan. "We will use the bankruptcy process to get all the discovery we need for your client's case. That will cost almost nothing. We'll get the trustee to do all the work for us. Then, once we get what we need, we'll push for a huge settlement in your client's case. They will pay really big to keep a lid on what they have been doing." Jason didn't like what he was hearing. He wanted the fraud exposed to the public, and he especially wanted to take down Senator Fonten. "I don't like this," he said. "If we don't expose them, they will just victimize others." Matilda and Bruce looked at each other as if they shared a secret. Bruce spoke, "We're lawyers and not the police. Our job is to get as much money as we can for our client. Even if things go really well in bankruptcy court, winning a lawsuit would likely take years. They would delay, deny, and defend at every step, and then they would fight like crazy in the damages phase, and beyond all that, there would be endless appeals, and we don't even do appeals work." "You're talking about a private settlement," said Jason. "I'm supposed to risk my career for this?" "Don't worry," said Bruce. "We will either settle this quickly, or it will go nowhere. If things go well in the Chapter 11 phase, I'll bring in Cleaver and Associates, and Gretta and company will have the opportunity to bill the file like crazy. I'm thinking a settlement of \($10\) million, and your firm could easily bill a million dollars before it's all over. You would be a hero." "How could my firm possibly bill a million dollars when we are only talking about a relatively small insur- ance agency?" Matilda interrupted. "Your firm would need to audit every single transaction that ever happened in the agency. It would need to review all the discovery documents, review the filings, participate in the settlement discussions, and do all the damage calculations. But, to be totally honest, we wouldn't be able to get a settlement without the backing of a forensic accounting firm. These types of people never settle unless you can show them you can prove an airtight case. If you file too soon, they fight and cheat in discovery. You'll end up getting little or nothing out of them, and then they will file for a dismissal on the basis of your lack of evidence." Jason left the meeting with Bruce and Matilda wondering what he was going to find. He knew nothing about the seller's son, so he would begin his investigation by profiling him and everyone else in the agency. And more importantly, he would investigate the son's computer and all his electronic dealings. He knew exactly how to proceed. 

Required

a. What procedures in bankruptcy could be used to uncover the possible fraud scheme?

b. What role might Jason play in the bankruptcy case?