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agreements is compounded by their reliance upon bookkeeping
entries alone to substantiate the economic effect of the
programs.
Parties to complex million-dollar transactions normally
insist upon adequate documentation of their rights and
responsibilities. In this case, however, Fred created journal
entries or bookkeeping entries to reflect transactions that he
alone perceived to have happened. In most instances, those
transactions did not happen in fact; the only substantiation for
them is Fred's self-serving testimony and the bookkeeping entries
that he created.
Confronted with the absence of notes or other evidence of
the claimed transactions, Fred has claimed that they were not
needed. Fred was asked at trial how Machise gave the MIT 82
partners $3,075,000 without transferring cash or property or
executing any document. Fred explained: "The transaction
occurred, it was recorded on the books of all the parties with a
full explanation and you don't really need notes, checks or cash
or property." Asked to amplify, Fred said
No advance, no notes, nothing had to be done. One
person--two people or 35 people agreed that there would
be a transaction that occurred. For one reason or
another, that's what they wanted to do. I knew it
occurred, all the parties knew it occurred, all the
parties agreed to the transaction. As the accountant,
I recorded the transaction.
Fred is wrong in ignoring the significance of his repeated
failures to provide documentation or other substantiation for the
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