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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
VERMONTY POWER ALLEGES COMMISSION JAY VERMONTY SECURITIES EXCHANGE STEINBERG POWER PHONE TMC AGROWORLD ACCOUNTING TANNENBAUM FINANCIAL STATEMENTS CARRION EXCHANGE ACT CARMEN VERMONTY RELIEF DEFENDANT STOCK FRAUDULENT MICHAEL ADEST ACCORDING ASSETS VIOLATIONS CHIEF EXECUTIVE OFFICER STOCK PROMOTERS FALSE PRESS AUDITED FINANCIAL STATEMENTS REGISTRATION STATEMENT |
SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16303 / September 28, 1999
Accounting and Auditing Enforcement
Release No. 1173
SECURITIES AND EXCHANGE COMMISSION v. NOAH STEINBERG, ENRIQUEZ REYES
CARRION, GERSHON TANNENBAUM, JAY M. VERMONTY AND CARMEN VERMONTY (AS
RELIEF DEFENDANT), Civil Action No. 99-Civ. 6050 (E.D.N.Y.) (RJ)(filed
September 28, 1999)
SEC SUES SENIOR OFFICERS OF A MICROCAP COMPANY
AND ITS STOCK PROMOTERS FOR FINANCIAL FRAUD
The Securities and Exchange Commission ("Commission") today announced
the filing of a complaint in the United States District Court for the
Eastern District of New York against Noah Steinberg, Enriquez Reyes
Carrion, Gershon Tannenbaum, Jay M. Vermonty, and relief defendant
Carmen Vermonty. The complaint alleges that from 1995 through 1997,
the defendants engaged in a fraudulent scheme to falsify and inflate
the financial condition of Power Phone Inc., a New York corporation
formerly headquartered in Brooklyn, and its successor, TMC Agroworld
Corporation. According to the complaint, Steinberg, the president and
chief executive officer of Power Phone, and Carrion, the president and
chief executive officer of TMC Agroworld, orchestrated the fraud by
filing fraudulent financial statements with the Commission and by
issuing false press releases. The complaint also alleges that
Tannenbaum and Jay Vermonty fraudulently promoted Power Phone and TMC
Agroworld stock.
The complaint alleges that Power Phone's audited financial statements
for the fiscal year ended June 30, 1995, improperly included two
assets that Power Phone did not own (i) artwork with a purported value
of $2 million; and (ii) a commercial grade application software
program known as "ASAP," also with a purported value of $2 million.
Collectively these assets accounted for 95% of Power Phone's total
assets. According to the complaint, Power Phone's audited financial
statements for the fiscal year ended June 30, 1995 were included in
Power Phone's annual report on Form 10-K and in a Form 10 registration
statement, both of which were filed with the Commission in October
1995 and June 1996, respectively. The complaint states that Steinberg
prepared and signed Power Phone's annual report and registration
statement. The complaint also alleges that Steinberg made false
statements to the accountants that audited Power Phone's financial
statements for its fiscal year ended June 30, 1995.
The complaint further alleges that Steinberg and Carrion were involved
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