SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
LITIGATION RELEASE NO. 15419 / July 24, 1997
ACCOUNTING AND AUDITING ENFORCEMENT
RELEASE NO. 940 / July 24, 1997
SECURITIES AND EXCHANGE COMMISSION v. ALEXANDRA ELIZABETH MONTGOMERY,
WILLIAM KENNETH NESTOR, FREDERICK BURGESS AND HARRIET GLUCK, Civil
Action
No. CV 97 4219 (E.D.N.Y.)
On July 24, 1997, the Securities and Exchange Commission filed a
civil
complaint in the United States District Court for the Eastern District
of
New York against Alexandra Elizabeth Montgomery, the former executive
vice
president, chief financial officer and a director of International
Nesmont
Industrial Corporation; William Kenneth Nestor, the former president,
chief
executive officer and chairman of the board of Nesmont; Frederick
Burgess,
the former head assayer and a director of Nesmont; and Harriet Gluck,
Montgomery's mother. Nesmont is a Canadian refiner and processor of
precious metals whose stock traded on Nasdaq from May 1993 until it
was
delisted in August 1994.
The complaint alleges that from late 1992 until mid-1994,
Montgomery,
Nestor and Burgess, while officers and/or directors of Nesmont, engaged
in
a deliberate scheme to overstate the company's income and inflate its
reported assets by including in inventory fake gold materials,
including
brass bars made up to look like gold bars. The fraudulent scheme
involved
fabricating inventory, creating phony documents, falsifying assets
and
earnings, and making false representations in press releases and
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION v. ALEXANDRA ELIZABETH MONTGOMERY, WILLIAM KENNETH NESTOR,
On July 24, 1997, the Securities and Exchange Commission filed a civil complaint in the
The complaint alleges that from late 1992 until mid-1994, Montgomery, Nestor and Burgess,
The fraudulent scheme involved fabricating inventory, creating phony documents, falsifying
For example, Nesmont reported net earnings of $219,923 (Cdn) in its audited financial
In its unaudited financial report for the year ended December
1993, Nesmont reported net earnings of $751,592, when it should have reported a net loss of
In addition, the complaint alleges that Montgomery, Nestor and Burgess knowingly circumvented
The complaint further alleges that Montgomery and Burgess made materially false and
The complaint further alleges that Montgomery and her mother, Gluck, violated the antifraud
The Commission seeks a permanent injunction enjoining Montgomery, Nestor and Burgess from
enjoining Montgomery, Nestor and Burgess from aiding and abetting violations of Section 13of
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