Contemporary Business and Online Commerce Law 7th Edition by Henry R Cheeseman

Exercise 4

Criminal Fraud Miriam Marlowe’s husband purchased a life insurance policy on his own life, naming his wife as the beneficiary. Three years later, after Marlowe’s husband died in a swimming accident, Marlowe received payment on the life insurance policy. Marlowe later met John Walton, a friend of a friend. He convinced Marlowe and her representative that he had a friend who worked for the State Department and had access to gold in Brazil and that the gold could be purchased in Brazil for $100 an ounce and sold in the United States for $300 an ounce. Walton convinced Miriam to invest $25,000. Instead of investing the money in gold in Brazil, Walton opened an account at Tracy Collins Bank in the name of Jeffrey McIntyre Roberts and deposited Miriam’s money in the account. He later withdrew the money in cash. What crime has Walton committed? State of Utah v. Roberts, 711 P.2d 235, Web 1985 Utah Lexis 872 (Supreme Court of Utah)

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Facts of the Case

The case is related to an act of criminal fraud. The husband of MM bought a life insurance in his name with his wife being the beneficiary. After 3 years he unfortunately lost his life in a swimming accident and accordingly MM got the insurance amount there from. She then met her friend’s friend naming JW. JW asked her that he has some information insight which states that at $100 an ounce gold can be bought in Brazil and then can be sold at $300 an ounce in US. Therefore she should make an investment of at least $25000 for exploiting this opportunity. She agreed. JW then deposited the said sum in the account of JMR at Tracy Collins Bank and withdrew the money in cash. Not a single amount was invested in gold as promised.