Bob is the owner and president of BBB Company. He and his close friend, Bill graduated with MBAs. They always dreamed about being successful and making lots of money. They have worked in the same company for years, working their way up to senior management and eventually senior executive roles. BBB Company has been a success the entire time that Bob and Bill have worked for the company. Stock prices have increased every year, and revenues have grown by a compounded rate of 20 percent per year. Bob is becoming a little suspicious of the companys results because the earnings per share are always equal to Wall Streets projections. In the past couple of years,Bob has noticed that his friends personal life has become troubled. Bill has gotten a divorce and is continually struggling financially, even though Bob knows that bill is making plenty of money to cover his bills. One night, Bob stopped by the office to respond to some e-mails he could not get to during the day. He noticed that Bill was working late as well. Bill was the CEO, and Bob just assumed that he was working late because it was close to the end of the quarter. However, after reviewing the quarters results, Bob is suspicious again because the results are exactly equal to Wall Streets forecasts. Bob decides he needs to begin an investigation into financial reporting practices.

Question: What issues must Bob consider in deciding how to investigate the financial results of the company?

An excerpt from the Fourth Amendment reads: The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

Suspecting a Mr. W of running an illegal gambling and loan sharking operation, the FBI obtained a federal search warrant. The FBI entered the residence of Mr.W and searched through various records. Suspecting most of the records were contained on a personal computer, the FBI began attempting to access the computers various files.

Unable to access the needed files because of password barriers, the FBI installed a system known as a key logger system (KLS). This system was able to determine the keystrokes made on a computer and thus allowed the FBI to discover the password needed to enter the incriminating files. The discovery led to the gathering of evidence linking Mr. W to the suspected illegal operation

Question: Were Mr. Ws Fourth Amendment rights violated?

Max 45, just got out of jail. As a reformed citizen on parole, Max decides to go into business for himself. He starts a collections company to help companies collect debts. The terms of his parole stipulate that he pay restitution payments to the federal government of $400 a month, or 10 percent of his income, whichever is greater. As his parole officer, you notice that after a year out of jail, Slick makes some interesting purchases. First, he buys a new Jaguar, which he drives to parole meetings.

Second, he moves into an expensive neighborhood on the north side of town and takes a cruise to Bahamas with his 19-year-old girlfriend. Yet, he has never been late making his $400 monthly payments to the federal government. After obtaining a subpoena for his bank records, you notice that he has only $1,000 in his account. About this time, you receive a call from a man who is making payments to Maxs collection company. He states that Max is threatening to break his legs and hurt his family if he doesnt pay Max's company. The man says Max demands the checks be made out to a woman, not a company.

This complaint convinces you to investigate Max and his girlfriend. A search of UCC filings in the county shows that Maxs girlfriend owns three cars costing a total of $85,000, a $360,000 house, and a company called Here for U". You check her bank account and see that more than $45,000 is moving through the account each month. You decide to dig through Max and his girlfriends trash a few times each month. In these searches, you find evidence that supports the following: three car payments totaling $2,000 per month; a $2,600 monthly mortgage payment; a credit card balance of $6,500, with $200 monthly payments; a balance of $13,500 owed to Home Shopping Network, with $600 monthly payments; $350 food payments during the past two weeks; and a $3,650 payment to Bahamas Cruise Lines. After searching the girlfriends trash, you talk to her neighbors, friends, and co-workers and determine that she and Max spend between $1,500 and $2,500 a month on miscellaneous items and trips. One neighbor tells you that max just gave his girlfriend a diamond ring that cost $4,500. Maxs girlfriend works as a waitress at a small restaurant and makes only $16,500 a year. (Note: Assume that both Max and his girlfriends net worth last year were zero.)

Question: Use this information to prepare a net worth analysis of Max's girlfriend. (Ignore interest in your calculations.)