Bob Smithers and Joe Cramer ran a finance company called Beat the Street, LLC. Bob was the CEO, Joe was the COO. Beat the Streot sold interestbearing investrents to clients with the promise of extraodinarily high interest payments for five years, at which point the principal would be repaid. Most of the business was conducted over the phone and internel. To the clients, nothing seemed suspicious or nefarious. Rather than investing the clients' mondy however, Smithern and Cramer were using the money to find thes lowish lifestyies. They paid interest to existing investors with money glaid by new clents. As long as they cocle eep bringing in new investors, they could keep the scherme going Eventually, Bob and Joe ran out of new investors to recuilt and were unable to pay promised interest payments. CGents complained to the FBI, which invessigated and found that Bob and Joe had taken in over $400 million from 7,000 individual investoss and paid out only $100 million in interest paryments over the course of 10 years. When the conpary/s assets were veized by the FBI, there was only $10 million in assets lef. The foderal povemment charged Bob and Joe with securities and wine fraid. 1. According to the textbook, what are the 5 elements of criminal fraud? 2. Given the facts above, do you think Bob and Joe are guilty of criminal fratd? If so, tixplain how they futiled at 5 elements if nok explain now the elements de not agply io them. Bob Smithers and Joe Cramer ran a finance company called Beat the Street, LLC. Bob was the CEO, Joe was the COO. Beat the Streot sold interestbearing investrents to clients with the promise of extraodinarily high interest payments for five years, at which point the principal would be repaid. Most of the business was conducted over the phone and internel. To the clients, nothing seemed suspicious or nefarious. Rather than investing the clients' mondy however, Smithern and Cramer were using the money to find thes lowish lifestyies. They paid interest to existing investors with money glaid by new clents. As long as they cocle eep bringing in new investors, they could keep the scherme going Eventually, Bob and Joe ran out of new investors to recuilt and were unable to pay promised interest payments. CGents complained to the FBI, which invessigated and found that Bob and Joe had taken in over $400 million from 7,000 individual investoss and paid out only $100 million in interest paryments over the course of 10 years. When the conpary/s assets were veized by the FBI, there was only $10 million in assets lef. The foderal povemment charged Bob and Joe with securities and wine fraid. 1. According to the textbook, what are the 5 elements of criminal fraud? 2. Given the facts above, do you think Bob and Joe are guilty of criminal fratd? If so, tixplain how they futiled at 5 elements if nok explain now the elements de not agply io them
