UNITED STATES OF AMERICA
Before The
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 42979 / June 23, 2000
ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 1278 / June 23, 2000
ADMINISTRATIVE PROCEEDING
File No. 3-10242
_________________________________________________________________
In the Matter of
RICHARD S. KONDUB, CPA,
SCHNITZER & KONDUB, P.C.,
and ROSS J. SCHNITZER, CPA
Respondents.
_________________________________________________________________
ORDER INSTITUTING PROCEEDINGS
PURSUANT TO RULE 102(e) OF THE
COMMISSION'S RULES OF PRACTICE,
MAKING FINDINGS AND IMPOSING
REMEDIAL SANCTIONS
I
The Securities and Exchange Commission ("Commission") deems it
appropriate and in the public interest that public administrative
proceedings be, and they hereby are, instituted against Schnitzer &
Kondub, P.C. ("S & K"), Richard S. Kondub ("Kondub"), and Ross J.
Schnitzer ("Schnitzer"), pursuant to paragraph (1)(ii) of Rule 102(e)
of the Commission's Rules of Practice (17 C.F.R. § 201.102(e)(1)(ii))
("Rule 102(e)(1)(ii)").
II
In anticipation of the institution of these administrative
proceedings, S & K, Kondub and Schnitzer (collectively, "Respondents")
have each submitted an Offer of Settlement, which the Commission has
determined to accept. Solely for the purpose of these proceedings, and
any other proceeding brought by or on behalf of the Commission or in
which the Commission is a party, and without admitting or denying the
Commission's findings contained herein, except for the jurisdiction of
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION
RICHARD S. KONDUB, CPA, SCHNITZER & KONDUB, P.C.,
and ROSS J. SCHNITZER, CPA
COMMISSION'S RULES OF PRACTICE, MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS
In anticipation of the institution of these administrative proceedings, S & K, Kondub and
Respondents engaged in improper professional conduct in connection with their audits of the
DCI incorporated those financial statements into the corresponding five Forms 10-K that it
Each year Respondents issued audit reports stating that their audit had been conducted in
In fact, Respondents did not comply with GAAS in their audits of DCI's financial statements,
DCI's primary business activity has been the acquisition of small,
DCI was filing periodic reports pursuant to Section 13 of the Exchange Act.
In January 1995, DCI acquired the assets of Alpha Products in exchange for 850,000 shares of
On February 14, 1995, DCI acquired all of the outstanding stock of Casino Marketing Inc., a
GAAP required that value be assigned to the assets in proportion to the stock released to the
Reported Less Overstatements
DCI booked the transaction under the purchase method as if it had acquired R & D Scientific
On November 26, 1996 DCI entered into a written agreement with the owners of Muller Media,
On March 25, 1997 -- six days before the close of its 1997 fiscal year -- DCI acquired all of
In late November and early December of 1998, DCI entered into a series of agreements
Notwithstanding the rescission, DCI included the $5,000,000 Carlyle promissory note in its
Had he exercised due professional care, Kondub would have realized that because of the
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