Reference no: EM133327135

Assignment: Wally Bigwheel is the president of an investment firm. His work involves investing his own family's money, along with the assets of his firm's clients, in the stock market. The firm is small and is owned by his family. He draws an annual salary of $500,000. Bigwheel becomes upset when Congress decides to repeal the tax laws passed early in the Trump presidency, and to subject persons who have annual income in excess of $300,000 (the top 1 percent) to a higher marginal income tax rate. When this change in the tax law is enacted, Bigwheel decides to juggle his company's books so that he can avoid the higher tax rate. Bigwheel plans legally to reduce his salary to $299,999 annually. He also intends, however, quite illegally, to disguise many of his personal non-deductible household expenses as fake " business expenses,"which his family firm will pay and then promptly deduct on its business income tax return.

Through this scheme, Bigwheel expects to be able to live at his accustomed level of comfort without paying the new taxes. Assume that if Bigwheel carried out his plan, he would be guilty of criminal tax evasion, a felony under federal law.

1. Assume that Bigwheel makes detailed plans about how he will juggle his company's books. Bigwheel makes the mistake of putting his plans in writing, in a notebook, which is found and read by his younger brother, Beaver. Beaver, who is painfully honest, is incensed that his brother would even consider sullying the family name by violating the law. Beaver takes the notebook to a FBI agent, who contacts the appropriate U.S. Attorney to inquire about prosecuting Wally. Can Wally be arrested immediately? (yes or no)______ If so, for what crime, and if not, why not?

Assume that instead of writing about his plans, Wally decides to discuss them with Beaver. Wally and Beaver meet at a local malt shop, where Wally tells Beaver in detail about his plans. Beaver thinks Wally's scheme is terrific, and agrees to help Wally put it into effect. The two decide that they will need to get some help from a C.P.A Beaver telephones an accountant he happens to know. He uses the malt shop's pay phone. Unfortunately for the brothers, Nancy Grew (famous girl detective) overhears both the conversation between the brothers and Beaver's side of the phone call to the accountant. Beaver's side of the conversation was more than detailed enough to show that Beaver used the call to invite the accountant to join him and Wally in their tax evasion scheme. Nancy promptly reports everything she overheard to you at the U.S. Attorney's office.

2. Have Wally and Beaver committed any crimes for which they could legally be arrested at this point? (yes or no)_____If so, what crimes are they, and if not, why not?