Question

Case Study 2 Fred’s Miracle Cough Syrup has hit the market and become a huge success with the burgeoning integrative medicine demographic. Per your advice, Fred has patented his famous concoction and trademarked the Fred’s Miracle Cough Syrup name and logo.

Demand is so high that Fred and Sally are working full-time on the business. Their children, Sam and Lilly, and their respective spouses, Jane and Tim, have joined the company full-time as well. In fact, Fred and Sally have made Sam and Lilly part owners of the business. Fred, Sam, and Tim handle the production, sales, and delivery. Sally and Lilly handle the majority of the administrative and business management tasks, while Jane acts as the bookkeeper. Sally and Fred are the only authorized signatories on the corporate account. Sally and Lilly have been hard at work securing a new production facility and distribution chain to accommodate an upcoming contract with a national chain.

After locating a large warehouse on several acres, Sally and Lilly approach their local credit union for a loan. The business has only one business credit card used to purchase supplies for the production of Fred’s Miracle Cough Syrup, and there is a small mortgage outstanding on the family farm. Personal debts of the individual family members consist of small credit-card balances for Fred, Sally, Sam, and Lilly as well as an auto loan on Sam’s van.

During the commercial loan accounting review process, Sally and Lilly discover that Jane has been siphoning off large amounts of corporate money and “cooking the books” to hide her actions. Jane has written several checks from the corporate account and forged both Sally’s and Fred’s signatures. Jane has made out all but one of the forged checks to Don, a local loan shark, in an effort to repay her gambling debts. The check Jane did not deliver to Don was made out to “Cash,” which she slipped into the collection box at church in an effort to absolve her guilt. The embezzlement was so severe that the family fears that Fred’s Miracle Cough Syrup is now on the brink of bankruptcy.

Meanwhile, Sam’s refusal to enter into an exclusive distribution deal with the local drugstore has enraged Bob, the owner. Bob has now reverse engineered Fred’s cough syrup recipe and has posted it online in an act of vengeance. As Fred and Sally tearfully recount the events of the past month, you reassure them that you are on the case, and you begin to ponder the legal issues at hand. Specifically, the following critical elements must be addressed:

What legal defenses might Fred and Sally raise with regard to the checks written by Jane to Don and the church?

Answer 1

Solution:-

What legal defenses might Fred and Sally raise with regard to the checks written by Jane to Don and the church:-

The legal defenses Fred and Sally might raise with regard to the checks written by Jane toDon are robbery, larceny, fraud, and counterfeit. The first legal defense for Fred and Sally is robbery because robbery is the forceful and unlawful taking of a personal property (Dynamic Business Law eBook, 2011, Pg. 150). The second legal defense for Fred and Sally is larceny because it is secretive and wrongful taking of carrying away of a person’s property of another with intent to deprive the owner of its use or possession (Dynamic Business Law eBook, 2011, Pg. 150). The last legal defense for Fred and Sally is fraud with the fraudulent crime being forgery. Fraud is encompassing a variety of means for which the individual intentionally uses misrepresentation to gain advantages over others (Dynamic Business Law eBook, 2011, Pg. 153). The forgery would be considered a felony and the penalties could range from jail time to fines, probation, and restitution (Forgery Laws and Penalties).

Counterfeiting means the good or service appears to originate from the legitimate source, but they are unauthorized reproductions (Followill). They are not limited to creating fraudulent documents and goods, but altering the legitimate items as well. Counterfeiting can be used for this case because Jane was caught forging the signatures of Fred and Sally on the checks to Don. Fred and Sally would be able to use robbery, larceny, fraud, and counterfeitas legal defenses because Jane unlawfully took the money without their permission depriving them of using the moneythemselves.