Opinion ID: 711056
Heading Depth: 4
Heading Rank: 2

Heading: Was the Audit Materially Incomplete and Did Mr. Nash Have

Text: 98 Knowledge of this Fact? 99 Mr. Nash contends, first, that the audit was completed in conformity with GAAP, and, second, that he had no knowledge of any inaccuracies that may have existed. Each contention falls far short of meeting the standard set by Jackson v. Virginia, 443 U.S. 307, 318, 99 S.Ct. 2781, 2788, 61 L.Ed.2d 560, reh'g denied, 444 U.S. 890, 100 S.Ct. 195, 62 L.Ed.2d 126 (1979). 100 Mr. Neely, an associate of Mr. Nash who worked with him on the audit, testified that he consulted with Mr. Nash about the Trafalgar audit on a daily basis throughout July 1988. He testified that the auditors never received acceptable substantiation for several material entries in Trafalgar's financial records; that Mr. Nash knew that these items had not been properly documented; that Mr. Nash was in almost constant contact with Messrs. Knapp and Sarno in an attempt to produce appropriate records; and that the effort to substantiate the information contained in the audit continued well into the fall of 1988. Mr. Neely also testified that, in his professional opinion, the audit was incomplete. Mr. Neely's testimony is largely corroborated by that of Mr. Schumann and Mr. O'Brien, both of whom worked with Messrs. Knapp and Sarno on this scheme and both of whom testified under a grant of immunity. Mr. Morgan likewise testified as to the elaborate measures taken to create a paper trail that would justify the figures contained in the audit. All four witnesses portrayed Mr. Nash as a man trying to gather or create pieces of paper to support a foregone conclusion; when in the end his efforts at fabrication failed, Mr. Nash simply delivered the opinion anyway.