Kaiser, convicted in November by a jury in New York, will be sentenced Thursday by U.S. District Judge Thomas Griesa, the newspaper reported. Kaiser's lawyer, Richard Morvillo, said in court papers yesterday that prosecutors asked for the lengthy sentence after claiming that the fraud had cut the market value of Royal Ahold NV, U.S. Foodservice's owner, by $6 billion and cost investors $800 million.
Morvillo believes Kaiser should get no more than 27 months because the government's figures are inflated. Morvillo said it would be unfair to base Kaiser's sentence on a $6 billion drop in market value as prosecutors and the U.S. Probation Office are urging.
"This case is a far cry from the parade of massive frauds that have been publicized over the last several years, like Enron, WorldCom, Qwest and Global Crossing," Morvillo wrote. "The defendants at the heart of the frauds at those companies wreaked far greater havoc on the public than Mr. Kaiser."
Kaiser was convicted of helping U.S. Foodservice overstate earnings from 2000 to 2003 by recording as income promotional rebates the company hadn't yet earned. Prosecutors said Kaiser was seeking to burnish his resume and succeed Jim Miller as chief executive of the subsidiary.
According to Morvillo, prosecutors claim the fraud drove down Ahold's market capitalization by $6 billion after news of the scheme came to light in 2003. However, the lawyer said, "Ahold's stock price rebounded to within 42 cents of its pre-announcement share price" within months, after its internal probes ended.
Morvillo said it would be unfair to base Kaiser's sentence on a $6 billion drop in market value as prosecutors and the U.S. Probation Office are urging. He said the government is relying on provisions of advisory U.S. sentencing guidelines that recommend a 30-year sentence for any loss of more than $100 million.
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