Bill Bartmann trial continues in federal court
Tuesday, October 7th 2003, 12:00 am
By: News On 6
Day 7 in the fraud trial of CFS Founder Bill Bartmann and the focus was on the performance of CFS.
Prosecutors claim that Bartmann knew the company was failing and say he illegally inflated CFS revenues to keep investors happy. Tuesdayâ€™s witness was the man who CFS brought in to take over for Bartmann. As News on 6 business reporter Steve Berg tells us, he didn't last long.
By January of 1997, CFS was getting so big, so fast that a decision was made to bring in an outside person to take over the operation of the company. The witness, Mitch Vernick, told the court Tuesday that in his job interview, he was told that Bill Bartmann was mainly an entrepreneur and wanted somebody with big company experience, which Vernick had, to be President and CEO.
Vernick took the job and set about studying the company. Thatâ€™s when he testified he grew uncomfortable with CFS's business plan. He said, "He didn't think it was wise" for CFS "to continue financing" the way it was. He felt CFS was borrowing too much money and that it would be too hard to pay it back. By late May of 1997, he says he met with Bill Bartmann and expressed his opinion and his worry that CFS "was putting itself on a path where it might default at some point."
He says he advised him to slow the company's growth. But he says Bartmann disagreed. And he says he later met with the executive committee of CFS, which also disagreed.
He was terminated that very same week, just a few months after he started at CFS.