The board of directors of Let’s Eat, Inc., a large food andbeverage manufacturer, asks a CFE Certified Fraud Examiner (CFE) toinvestigate a potential bribery scheme involving one of its seniormanagersVice-Presidents, Marshall Smith. Mr. Smith recentlycontracted with a relief organization to supply food and water to aregion of the world that was devastated by a massive earthquake.The board suspects that Let’s Eat is paying bribes to get thesupplies into the region, and it wants the CFE to look into thematter and report back. The CFE interviews Mr. Smith, who explainsthat he accepted the contract with the relief organization as acharitable effort, and that he expects to break even on thecontract. He also tells the examiner that the drivers who deliverthe supplies are given cash to keep with them so that when they arestopped by the local militia, they can pay whatever is demanded andcontinue their mission. Smith says that these special payments area cost of doing business. He also mentions that in the past,drivers without cash were murdered. The CFE is sure that none ofthe money is flowing back to Mr. Smith, whose only motive is to getthe supplies delivered. Also, the operation is expected to becompleted within the next few months. The CFE considers whether heshould report the special payments to the board or keep silent.
Please answer the following questions about this case:
What harm might be done to the relief agency if the examiner CFEwere to report the special payments to the board?
What might the consequences be to the earthquake victims if theexaminerCFE were to report the special payments to the board?
If you were in the examiner’s CFE’s position, how would you feelif earthquake victims died from dehydration or starvation as aresult of not receiving the supplies?
What good might come out of the examiner CFE reporting thespecial payments to the board and what harm might result if theexaminer CFE overlooked the special payments?
What should legal considerations be taken into accountconsidered by the CFE?
