Probably the latter, take it or leave it.
Unfortunately, taking that option has dragged the integrity of all WFL associates involved in this fiasco into the quagmire. Now there's a mountain of explaining, grovelling, and in future, if there is one, a little more due diligence on who you might be dealing with would come in handy.
Having said that, it's not the first rodeo with CPS, GAKS et al, so they knew what they were signing up for.
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