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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
COMMISSION SECURITIES ACT REVENUE COMPLAINT INSCI IMTECH LOWREY ESTRIN FRAUDULENT SALES REVENUE REPORT NET INCOME ALLEGES CIVIL PENALTIES REVENUE RECOGNITION SCHEME PERMANENTLY ENJOINING VIOLATING JUDGMENT PERMANENTLY ENJOINING CONSENT OFFICER FRAUDULENT REVENUE RECOGNITION OVERSTATE INFORMATION MANAGEMENT TECHNOLOGIES RECORDING FILINGS PRESIDENT FINANCIAL STATEMENTS NET LOSS |
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SECURITIES AND EXCHANGE COMMISSION
Washington D.C.
Litigation Release No. 14744 / December 5, 1995
Accounting and Auditing Enforcement
Release No. 738
SECURITIES AND EXCHANGE COMMISSION v. PIERCE LOWREY, JR. AND
RICHARD ESTRIN, 95 CiV 10242 (SHS) (S.D.N.Y. Dec. 5, 1995)
NEW YORK -- The Securities and Exchange Commission announced
today that it filed a civil injunctive action in the United
States District Court for the Southern District of New York
charging two former corporate officers with engaging in a
fraudulent revenue recognition scheme to overstate materially the
company's accounts receivable, sales revenue and net income.
Named in the complaint were:
Pierce Lowrey, Jr. ("Lowrey"), who was the chief executive
officer ("CEO") and chairman of the board of Information
Management Technologies Corp. ("IMTECH") and the president of
IMTECH's wholly-owned subsidiary, INSCI Corp. ("INSCI") during
the time of transactions and events alleged in the complaint. In
November 1991, Lowrey resigned as IMTECH's CEO and chairman and
as INSCI's president.
Richard Estrin ("Estrin"), who was assistant controller of IMTECH
from in or about September 1987 until September 1990, at which
time he became general business manager of INSCI. Estrin's
employment with INSCI was terminated in November 1991.
The Commission's complaint alleges that, during the period April
1990 through October 1991, Lowrey and Estrin (collectively,
"Defendants") fraudulently inflated by material amounts the
accounts receivable, sales revenue and net income of IMTECH and
INSCI in financial statements for the year ended March 31, 1991
and the quarter ended June 30, 1991. These financial statements
were included in the following documents filed with the
Commission and disseminated to the public: IMTECH's annual
report and its quarterly report; a registration statement filed
by IMTECH; and a registration statement filed by INSCI. The
Defendants allegedly each knowingly or recklessly participated in
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