UNITED STATES OF AMERICA
before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 47286 / January 30, 2003
ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 1710 / January 30, 2003
ADMINISTRATIVE PROCEEDING
File No. 3-11024
_________________________________________________________________
In the Matter of
American Rice, Inc.,
Joseph A. Schwartz, Jr.,
Joel R. Malebranche
and Allen W. Sturdivant
Respondents.
_________________________________________________________________
ORDER INSTITUTING PUBLIC PROCEEDINGS PURSUANT TO SECTION 21C OF THE
SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS AND IMPOSING A
CEASE-AND- DESIST ORDER
I.
The Securities and Exchange Commission ("Commission") deems it
appropriate that public administrative proceedings be, and hereby are,
instituted pursuant to Section 21C of the Securities Exchange Act of
1934 ("Exchange Act") against American Rice, Inc. ("American Rice"),
Joseph A. Schwartz, Jr. ("Schwartz"), Joel R. Malebranche
("Malebranche") and Allen W. Sturdivant ("Sturdivant") (collectively,
"Respondents").
II.
In anticipation of the institution of these proceedings, Respondents
have submitted Offers of Settlement ("Offers") which the Commission
has determined to accept. Solely for the purpose of these proceedings
and any other proceedings brought by or on behalf of the Commission,
or in which the Commission is a party, the Respondents, without
admitting or denying the findings contained herein, except that
Respondents admit that the Commission has jurisdiction over them and
over the subject matter of this proceeding, consent to the entry of
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION
ACCOUNTING AND AUDITING ENFORCEMENT
ORDER INSTITUTING PUBLIC PROCEEDINGS PURSUANT TO SECTION 21C OF THE SECURITIES EXCHANGE ACT
1934 against American Rice, Inc., Joseph A. Schwartz, Jr.
, Joel R. Malebranche
and Allen W. Sturdivant
In anticipation of the institution of these proceedings, Respondents have submitted Offers of
At all relevant times, American Rice was an issuer with a class of securities registered with
Schwartz supervised the financial activities of American Rice in Haiti.
Malebranche was responsible for facilitating the prompt clearance of American Rice shipments
Rice Corporation of Haiti, S.A. was a Haitian corporation with its principal place of
RCH processed, packaged and marketed rice for American Rice in Haiti under an at-will service
American Rice treated RCH as a wholly owned subsidiary and included the operations of RCH in
Kay supervised American Rice's business activities in Haiti.
From at least January 1998 to August 1999, American Rice employees, at the direction of an
The payments assisted American Rice to obtain or retain its business of selling rice in Haiti
However, competition from rice smugglers, who paid no import taxes, corruption among customs
In connection with the January shipment, Kay instructed Sturdivant to prepare a fake set of
At or about the same time, Malebranche negotiated the amount of the bribery payment with the
Savings Bribery Payment Net Savings Laurie-Kristie 01/02/98 1,820.92 82,839 25,000 57,839
Schwartz concealed the bribery payments by falsely recording them as routine business
E. American Rice Lacked Adequate Accounting Controls
The bondholders appointed a new Board of Directors, none of whom had worked at American Rice.
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