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An agent's knowledge will not be imputed to the principal if the agent is engaged in fraudulent activities and concealing them from the principal. 


Under the adverse agent doctrine, where an agent secretly acts entirely for his or her own benefit, the agent's knowledge is not imputed to the principal. Restatement (Second) of Agency § 282 provides: 


Section 282. Agent Acting Adversely to Principal


(1) A principal is not affected by the knowledge of an agent in a transaction in which the agent secretly is acting adversely to the principal and entirely for his own or another's purposes, except as stated in Subsection (2).


(2) The principal is affected by the knowledge of an agent who acts adversely to the principal:


(a) if the failure of the agent to act upon or to reveal the information results in a violation of a contractual or relational duty of the principal to a person harmed thereby;


(b) if the agent enters into negotiations within the scope of his powers and the person with whom he deals reasonably believes him to be authorized to conduct the transaction; or


(c) if, before he has ...

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