Opinion ID: 149873
Heading Depth: 3
Heading Rank: 2

Heading: Fraudulent Misrepresentations

Text: In addition to attempting to hide the inflated PA income, Kaiser allegedly lied to Deloitte auditors about two facts related to the PA agreements. First, the government alleged that in order to hide the existence of PA prepayments, Kaiser told the auditors that USF did not receive prepayments. In a document that appears to have been prepared for a November 29, 2000 Audit Committee Meeting, with Mark Kaiser, typed on the front cover, there is a statement that appears to have been drafted by USF management to Deloitte. The statement provides that USF did not regularly negotiate `up-front' payments from vendors for its [PA] programs. This turned out to be false. Kaiser argued that the misrepresentation could not be directly attributed to him, and that, in any event, he was never made aware of the number of PA agreements with prepayment terms. Second, the government alleged that in order to hide the prepayments from the auditors, Kaiser told them that USF did not have written PA agreements with the vendors. In a letter providing recommendations to USF management for the year ending December 29, 2001, Deloitte included an [o]bservation related to USF's promotional allowances with vendors that no formal written agreement's [sic] are signed. An auditor testified that the document was discussed at a meeting attended by Kaiser. Kaiser argued that this statement was not specifically attributed to him, and pointed to testimony from auditors at trial that indicated their understanding that there were some written agreements in place.