Question: read the case below and In reference to The Shakedown case, what would YOU do if you were in Zhuk's shoes? Give specific suggestions.

CASE: the Shakedown

A young American businessman in a developing country discovers that nothing gets done unless palms are greased. Should he play the game by his personal ethics -- or the local rules?

"HOW MANY OF THEM WERE THERE? Were they armed? Did they confiscate any papers or disks?" Pavlo Zhuk suddenly realized he was shouting, though for once the telephone line to Kiev was crystal clear. Zhuk was in a state. The grandfather clock in his sprawling farmhouse in Redwoods, California, had struck 6 AM, and the young software entrepreneur had just come down to the kitchen when the telephone startled him. His friend Kostya Hnatyuk, who headed Zhuk's software development center in Kiev, was calling to say that the center had had visitors that day -- and not very welcome ones. Hnatyuk patiently repeated what he had said a moment earlier. "I'm on my way to the office, Pavlo, so I don't have all the details. Taras Borovetz called me 15 minutes ago as I was getting off the plane and said that three or four UTA agents showed up this afternoon. That's Ukraine Tax Authority. Only one of them, a woman, entered the office. I suppose the men could have been armed, but Taras didn't say so--" "What did the woman say, exactly?" Zhuk interrupted. "She said that her name was Laryssa Ossipivna Simonenko. She claimed to be a UTA special agent. She told Taras that she and her boss, who heads something called the Special Audits Department, want to meet with us soon," Hnatyuk replied. "She says that we haven't filed five of the 17 schedules we were supposed to last quarter and we owe the government tax arrears of 86,954 hryvnia." Zhuk quickly converted the figure in his head: close to $16,000. "It's a shakedown," Hnatyuk concluded. "I can't believe it!" Zhuk cried. Had his life somehow turned into a B movie? "Why are they picking on us? We did everything by the book. How much time did she give us?" "She said next week. Don't worry, Pavlo. Our accountant can dig out all the tax papers, and I'll keep the lawyer on call in case Simonenko drops in again. Meantime, I'll figure out who she is and whether she's really conducting an official inquiry. She could be running an extortion racket on the side" Hnatyuk's voice trailed off; then he added: "I'll get our security guy to post two guards outside the office 24/7, starting tonight. No one else gets in unchallenged." Zhuk was rattled by the thought of the Ukraine Tax Authority laying siege to his company's office. Standing barefoot in his kitchen, he felt powerless to deal with the situation. "Look. I'll try to get on that Lufthansa flight out of LAX this afternoon. I should be there before the weekend. Maybe it's just a misunderstanding, but if we're in the tax authority's crosshairs, this could be big trouble. I'll call you again before I head out. Tell Taras and the other guys not to panic." After putting the telephone back in its cradle, Zhuk took a deep breath. He stared out the window toward the woods, hoping to spot the family of foxes he'd seen playing there a few days earlier. Waiting for his coffee to brew, he went out for the newspaper and scanned the headlines. He stopped again to take in the countryside. It dawned on him that for the first time in memory, he wasn't looking forward to packing his bags and heading for Kiev. Back in the USSR Six months earlier, Zhuk could hardly wait to land in Kiev. When the plane descended through a thin layer of clouds, he saw the setting sun reflecting off the Dnieper River and Kiev's golden domes. Without a doubt, this 1,000-year-old city was the most beautiful sight he had ever seen from the air. Sacked by the Mongols in the thirteenth century and virtually destroyed by the Nazis and the Red Army in the twentieth century, it had still clung to much of its magnificent Renaissance and Baroque architecture. Zhuk had his own connection with Kiev's past. His parents had fled the city at the end of World War II and by 1951 had found their way to the United States. The family first settled in Cleveland but moved in 1973 when Zhuk, Sr., an engineer, accepted a job in California. Pavlo, the last of six children, was born the same year and grew up speaking English and Ukrainian at home. He was the academic star of the family. After graduating with top honors from an engineering school on the East Coast, he worked for three years in Silicon Valley as a systems analyst and then entered an MBA program at a premier West Coast school. He hadn't even graduated when he decided to set up his company, Customer Strategy Solutions, to develop software for order-fulfillment systems. That proved to be a lucrative niche. After five years, the start-up employed 35 people, generated annual revenues of $40 million, and reported profits. Then, with the help of his friend Hnatyuk, Zhuk drew up a plan to create a software development center in Kiev. Hnatyuk, a British national of Ukrainian descent, had graduated from a Newcastle polytechnic as an electronics engineer. The two had met years before while Zhuk was summering in the UK as an exchange student. Their Ukrainian roots -- and love for soccer -- had kept them in touch. Before joining Customer Strategy Solutions, Hnatyuk had been based in Kiev as the vice president of a German company that sold seeds, pesticides, and fertilizers in the Commonwealth of Independent States. His company had been doing business in Ukraine for more than six years but hadn't turned a profit there until recently. When Zhuk had called a year ago to chat about his desire to set up a software development center, Hnatyuk immediately volunteered to quit his job and help set it up. Without discussing it much, the men both knew they were motivated by a feeling that this wasn't just about business; something more basic was at stake. Ukraine was a land where, due to two world wars, an ideology-created famine, the Holocaust, and political purges too numerous to list, 17 million people had lost their lives during the twentieth century. A tenth of Western Ukraine's population, including one of Zhuk's uncles and many of Hnatyuk's relatives, had been deported to Siberia. Zhuk and Hnatyuk's return was an assertion of resilience. They were driven by a desire to create opportunity, to bring hope, and to help build a modern society in Ukraine. Zhuk thought he was well on his way to proving the naysayers -- those who had pointed out the political turmoil and corruption in Ukraine and told him he should think twice about setting up shop there -- wrong. He appreciated their concern but thought it was overblown. As he'd told his 80-year-old father at Thanksgiving, he felt quite at home in the country of his ancestors