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(Solved) Case Study 2 In his own words, Daniel Jones was “ The Dude. ” With his waist-long dreadlocks,...

Case Study 2 In his own words, Daniel Jones was “The Dude.” With his waist-long dreadlocks, part-time rock band, and well-paid job managing a company’s online search directory—he seemed to have it all. Originally from Germany, Jones, now age 32, earned his doctorate and taught at the Uni- versity of Munich before coming to the United States, where he started his career in computers. In 1996, Jones started working with the company as a director of opera- tions for U.S.-Speech Engineering Service and Retrieval Technology—working on a new, closely guarded search engine tied to the company’s .net concept. The company allows employees to order an unlim- ited amount of software and hardware, at no cost, for business purposes. Between December 2001 and November 2002, Jones ordered or  used  his assistant and other employees  (including a high school  intern) to order nearly 1,700 pieces of software which had very low cost but were worth a lot on the street. He then resold them for reduced prices—reaping millions. When items with a cost of goods sold of more than $1,000 are ordered, an e-mail is sent to the employee’s direct supervisor, who must click on an “Approve” but- ton before the order is filled. In no individual order was the cost of goods more than $1,000—he  made sure none of the orders required a  supervisor’s approval. The loosely controlled internal ordering system reflects the trust the company puts in its   employees. In June, FBI agents said they saw Jones exchanging a large box of software for cash in a department store parking lot. The FBI contacted the company’s security and began monitoring Jones’ bank accounts. Previously, one account  with  his bank had  an  average  balance of $2,159. In a short time, however, the average balance ballooned to $129,775. Another account at  another bank showed irregular deposits totaling $500,000— none of which appeared to be from any legitimate in- come or other source. Investigators also noted that Jones purchased a Fer- rari F355 Berlinetta, a Jaguar XJ6, and traded in lesser vehicles for a Hummer, a Mercedes 500SEL, and a Harley-Davidson   motorcycle.   He   also   bought   an $8,000 platinum diamond ring, a  $2,230 wristwatch, and a $4,000 bracelet. “You figured that I  like big boy’s toys by looking at some of my pictures,” Jones wrote on his personal Web page. “I just can’t resist.” The Dude’s Web page includes a camera for monitor- ing his cat and photos of his yacht, cars, and other treasures. For a relatively low-level manager, it was an impressive collection. But at his company, where teen- age software engineers can earn more than company directors, no one batted an  eyelid. A neighbor across the street from Jones said that he was clearly wealthy, but not flamboyant with his money. He described Jones as an intelligent man who didn’t flaunt his education, would loan neighbors tools, and was always friendly. The neighbor was surprised to hear the accusations against someone he called his friend. All he knew about Jones was that he  was  a good neighbor who loved cars. “He was very, very help- ful. The few times I had problems with my PC, he’d come and help straighten them out,” the neighbor said. “They are just ideal neighbors. I feel terrible for him             and his wife.” Jones and his wife lived in a modest 1960s split-level home. In 2001, he joined the city’s Rotary Club, “where he seemed more outgoing and personable than the stereo- type techie,” said a local jeweler and immediate past president of the club. “He seemed like what I would expect a genius software developer to be.” The Dude was fired from the company in December 2002, shortly after the fraud was discovered. He has been charged with 15 counts of wire, mail, and com- puter fraud—with each count carrying a maximum of fives years in prison. He is expected to remain in cus- tody until his preliminary  hearing.        


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Oct 15, 2019





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