Reference no: EM133329668
Fact Pattern D: Bill's Investment
Bill lived in Denver and was always careful with money. However, he realized he could make his money grow by investing it. He researched a few options, but nothing sounded good to him until he was approached in a local bar by Amy. She started talking to him about "Western Tool and Equipment Repair and Investment Services" (hereafter, "Western Tool"). She gave him her card with that business name on it and with the title of "Investment Manager." She explained that the purpose of Western Tool was to use invested funds to purchase used tractor-railers. They would be reconditioned and sold for profit to large corporations, like K-Mart and Wal-mart. They would also be sold internationally.
She explained that they operated at a distant plant out of state in Texas but that there was a local headquarters nearby in Boulder, CO. She stated that investors made a 36% profit within the first year and that investment checks were distributed every 6 months.
Bill thought this idea sounded great. He asked for some documents to review, which Amy provided by e-mail. The numbers were too good to be true! He decided to invest $20,000 at the start.
Six months in, Bill received a check for $259 from Western Tool. He thought this was significantly lower than he was supposed to receive based on the numbers Amy provided him. He contacted Amy, who stated Bill needed to be bringing in other investors to reach those higher numbers. Amy said she would get him the information to bring others in, including some business cards and updated files.
A week later, Bill received business cards with his name on them and the title of "Investment Manager." Bill was confused because he was not an investment manager. However, he believed in the goals of the company and set out to bring more people into the business. He connected three individuals with Amy, and each person invested $5000. When Bill received his next investment check six months later, it was for $98. Now he was confused and angry. He managed to get other people to invest, and his investment proceeds decreased, contrary to what Amy told him.
At this point, he asked Amy for a face-to-face meeting because he wanted his money back. He suspected something was not right with this investment arrangement. He last saw her in the local bar and never went to headquarters in Boulder.
Amy never responded to his e-mails or phone calls. Bill drove to the address listed as headquarters in Boulder; but when he got there, it was a P.O. Box.
He hired a private investigator to find out more information. It turns out the Texas plant address didn't exist.
One of the people whom Bill managed to get to sign up, Dan, called the police after his own small investment check for $27 came in the mail. Dan thought this was some kind of fraud. He explained the details as he knew them to the police. Bill never hid any information about himself, so Dan had Bill's home address. Police went there to talk to Bill. Bill wanted to be helpful to the police. He answered the door and let them in. They began asking him about Western Tool. This was not the first time they had heard about the company, but Bill was the first person to provide significant information. With all the information Bill provided, the police forwarded the matter to the DA.
1. Assume the DA charged Bill with a crime. At trial, Dan is called as a witness and testifies that Bill told him there was an investment fund and that Bill was an investment manager. Bill also told Dan all the information he had been told by Amy. Dan testified to Amy's statements as told to Bill. What issue of evidence does this raise, if any? Rely on the entire Fact Pattern and any new facts introduced in this fact pattern.
2. What issue of evidence does this raise, if any? Rely on the entire Fact Pattern and any new facts introduced in this fact pattern.