This story is taken from Metro/Regional News at sacbee.com.

Kaiser heir sentenced for fraud

By Denny Walsh -- Bee Staff Writer
Published 2:17 pm PDT Tuesday, August 22, 2006

Then a group of European con artists lured him into believing he finally got the break he needed.

What the 62-year-old Oakland resident got instead was a year and a day prison sentence.

A Sacramento federal court Tuesday issued the sentence for Kaiser's role in the theft of $2 million from publicly traded SureWest Communications, a Roseville-based telecommunications firm.

In the words of his lawyer, Kaiser "fell prey to false promises of instant capital for his company and crossed the line in pursuit of that capital."

By virtue of that extra day on his sentence, he is eligible for up to 54 days off his term for good behavior. Such a reduction is not credited if the sentence is a year or less.

Kaiser was ordered to surrender Oct. 24 to begin serving his sentence.

Kaiser pleaded guilty in April 2004 to interstate transportation of fraudulently obtained property and engaging in monetary transactions with criminally derived property.

The sentencing range for his offenses, as calculated under federal advisory guidelines, is two years and nine months to three years and five months. But Assistant U.S. Attorney R. Steven Lapham, in a letter to the judge, recommended leniency, citing Kaiser's extraordinary cooperation in the government's investigations of two co-defendants and others.

In late 2001, Kaiser, Larry Wells and a third partner started Quivira Ventures as an investment fund for health care start-ups.

During the ensuing two years few institutions were investing in venture capital funds. In addition, since none of the three had ever run a fund, they had no track record upon which potential investors could rely.

Some European promoters told them if Quivira could demonstrate that it had $25 million on deposit at a major bank, the promoters would come up with $200 million to underwrite Quivira's venture capital fund, without Quivira ever having to relinquish any of the $25 million.

Jeffrey Wells was then a senior treasury analyst at SureWest with access to a portion of the firm's money.

According to the grand jury indictment of Kaiser and the Wellses, "in return for cash and other considerations, including the promise of future employment with Quivira Ventures," Larry Wells persuaded his son to transfer up to $25 million from SureWest to Quivira bank accounts for the purpose of demonstrating Quivira had sufficient funds to make it a viable venture capitalist.

"It was an extremely elaborate scheme," U. S. District Judge Morrison C. England Jr. observed in sentencing Kaiser. "Had it not been discovered, there is no telling what the consequences would have been."

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