Question

Crako Premium Nutraciticals Company manufactures and sells a wide range of specialty health and beauty products. Crako only sells through its distributors, which it has located in all major regions of the United States. What makes Crako successful is its excellent research division, which has buyers constantly roaming the globe in search of things like new kinds of skin crèmes, soaps, and cosmetics. The company even employs chemists with Ph. D. s for custom blending and testing ingredients in the company’s labs. Crako has been having a problem for the last 2 years. Every time Crako gets close to launching a new product, one particular competitor, always the same one first launches the exact same product. Crako’s CEO is convinced that the competitor is somehow stealing Crako’s secrets, because recently the competitor launched a skin crème that Crako had been researching for 4 years. The formula for the cream requires exact proportions of rare natural ingredients from four different continents. It would be impossible for a competitor to produce a perfect copy of such a formula by chance.

Required
a. Formulate two alternative fraud theories to explain Crako’s problem.
b. For each fraud theory, develop a plan for collecting evidence.



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  • CreatedFebruary 26, 2015
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