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U.S. Securities and Exchange Commission

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF GEORGIA


SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,   

v.

DENNIS A. BAKAL, SUSAN P. DIAL and
WILLIAM S. COLE,

Defendants.   


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Civil Action No.

COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF

The Securities and Exchange Commission ("Commission") files this Complaint for Injunctive and Other Relief and alleges as follows:

INTRODUCTION

1. This matter involves financial reporting fraud perpetrated during 1999 and 2000 by Professional Transportation Group Ltd., Inc. ("Professional Transportation"), a company that operated an interstate trucking business headquartered in Marietta, Georgia.

2. During the first three quarters of 1999, Professional Transportation's President and Chief Executive Officer, Dennis A. Bakal, along with the company's Chief Financial Officer Susan P. Dial, orchestrated a scheme to inflate the company's net income by recording fictitious sales on the accounting records of the primary operating subsidiary of the company. The scheme caused Professional Transportation to fraudulently report a cumulative net profit of $402,000 for the nine months ended September 30, 1999, instead of a net loss of $1.7 million.

3. Additionally, during the first two quarters of 2000, Bakal and Dial, along with the company's controller, William S. Cole, engaged in a second scheme to inflate Professional Transportation's net income by recording sales and receivables actually earned by another trucking entity controlled by Professional Transportation's majority shareholder. This scheme caused the company to fraudulently report a cumulative net profit of $1.4 million for the six months ended June 30, 2000, instead of a net loss of $1.7 million.

4. Defendants Bakal and Dial have engaged in, and unless restrained and enjoined by this Court, will continue to engage in, acts and practices which constitute and will constitute violations of Section 17(a) of the Securities Act of 1933 ("Securities Act") [15 U.S.C. 77q(a)] and Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. 78j(b) and 78m(b)(5)] and Rules 10b-5, 13b2-1 and 13b2-2 thereunder [17 C.F.R. 240.10b-5, 240.13b2-1 and 240.13b2-2], and acts and practices that aid and abet Professional Transportation's violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act [15 U.S.C. 78m(a) and 78m(b)(2)(A)] and Rules 12b-20, 13a-1 and 13a-13 thereunder [17 C.F.R. 240.12b-20, 240.13a-1 and 240.13a-13].

5. Defendant Cole has engaged in, and unless restrained and enjoined by this Court, will continue to engage in, acts and practices which constitute and will constitute violations of Sections 10(b) and 13(b)(5) of the Exchange Act [15 U.S.C. 78j(b) and 78m(b)(5)] and Rules 10b-5 and 13b2-1 thereunder [17 C.F.R. 240.10b-5 and 240.13b2-1], and acts and practices that aid and abet Professional Transportation's violations of Sections 10(b), 13(a) and 13(b)(2)(A) of the Exchange Act [15 U.S.C. 78j(b), 78m(a) and 78m(b)(2)(A)] and Rules 10b-5, 12b-20, and 13a-13 thereunder [17 C.F.R. 240.10b-5, 240.12b-20 and 240.13a-13].

JURISDICTION AND VENUE

6. The Commission brings this action pursuant to Sections 20(b), 20(d) and 20(e) of the Securities Act [15 U.S.C. 77t(b), 77t(d) and 77t(e)] and Sections 21(d) and 21(e) of the Exchange Act [15 U.S.C. 78u(d) and 78u(e)] to enjoin the defendants from engaging in transactions, acts, practices and courses of business alleged in this complaint, and transactions, acts, practices, and courses of business of similar purport and object, for disgorgement of illegally obtained funds and prejudgment interest, other equitable relief, and for civil money penalties.

7. This Court has jurisdiction of this action pursuant to Sections 20(b), 20(d), 20(e) and 22(a) of the Securities Act [15 U.S.C. 77t(b), 77t(d), 77t(e) and 77v(a)] and Sections 21(d), 21(e) and 27 of the Exchange Act [15 U.S.C. 78u(d), 78u(e) and 78aa].

8. The defendants, directly and indirectly, have made use of the mails, the means and instruments of transportation and communication in interstate commerce, and the means and instrumentalities of interstate commerce, in connection with the transactions, acts, practices and courses of business alleged in this Complaint.

9. Venue lies in this Court pursuant to Section 22(a) of the Securities Act [15 U.S.C. 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. 78aa] because defendants Bakal, Dial and Cole reside within this district, and because many of the acts alleged in this complaint occurred within the Northern District of Georgia.

THE DEFENDANTS

10. Dennis A. Bakal, age 58, co-founded Professional Transportation in 1990. He served as the company's President and Chief Executive Officer, and served as a member of its Board of Directors, until November 2000. Bakal was also Professional Transportation's majority shareholder until December 1999.

11. Susan P. Dial, age 57, joined Professional Transportation as its controller in 1997. From February 1999 to July 2000, she served as the company's Chief Financial Officer. Dial was also a member of the company's Board of Directors during 1999.

12. William S. Cole, age 48, joined Professional Transportation as a staff accountant in 1993. From April 1999 to November 2000, he served as the company's Controller.

RELATED PARTIES

13. Professional Transportation Group Ltd., Inc., formerly a Georgia corporation, was last headquartered in Marietta, Georgia. The company, which was formed in 1990 and went public in 1997, provided truckload delivery services. In November 2000, the company announced that it was ceasing its operations, due to the acceleration of its debt by its primary lender. Professional Transportation's securities, registered under Section 12(g) of the Exchange Act, were delisted from the NASDAQ SmallCap Market on November 29, 2000.

14. William M. Kelly, Jr., deceased, was a resident of Acworth, Georgia. Kelly was Professional Transportation's Vice President of Transportation from November 1991 to November 2000, and was in charge of the company's day-to-day trucking operations. Kelly died in October 2002.

15. U. S. Trucking, Inc., a Colorado corporation, is headquartered in Louisville, Kentucky. Similar to Professional Transportation, U.S. Trucking provided truckload delivery services. During most of the year 2000, both U.S Trucking and Professional Transportation were predominately owned and controlled by Logistics Management LLC.

16. Yohalem Gillman & Company LLP is a certified public accounting firm based in New York, New York. Yohalem Gillman was Professional Transportation's outside auditor from March 2000 to November 2000. It audited the company's financial statements included in its 1999 Form 10-K filed on April 14, 2000.

THE SCHEME TO OVERSTATE EARNINGS DURING 1999

17. Professional Transportation was in the transportation services industry, primarily involved in the delivery of freight and cargo "loads" via truck for a fee. Professional Transportation also provided agency services, whereby the company allowed certain third party trucking companies (the "agents") to operate under the Professional Transportation name in exchange for a fee.

18. Beginning shortly after its initial public offering in 1997, Professional Transportation entered into various credit facilities with SouthTrust Bank in order to fund its working capital requirements. By 1999, the company had a total line of credit of $9 million with SouthTrust.

19. During 1997 and 1998, Professional Transportation reported net losses on its annual financial statements filed with the Commission on Form 10-K. During the first quarter of 1999, Professional Transportation's financial situation continued to deteriorate. Additionally, the company had no availability on its line of credit facility, which was due to mature on May 31, 1999.

20. Due to the company's continuing losses, SouthTrust told Bakal that it wanted to terminate the line of credit facility with Professional Transportation.

21. In early 1999, Bakal, who had personally guaranteed the line of credit facility, began to search for alternate financings sources, while attempting to temporarily extend the facility maturity date with SouthTrust.

22. In April 1999, while closing the company's books for the quarter ended March 31, 1999, Dial told Bakal that Professional Transportation would report a net loss for the period.

23. Bakal, at the time, had been unable to locate an alternate lender and was fearful that SouthTrust would refuse to extend the maturity date of the credit facility if Professional Transportation did not reverse its declining financial performance and report a net profit. Accordingly, he told Dial that the company could not afford to show a net loss for the first quarter of 1999, and further instructed her to record false revenue on the company's accounting books and records so that Professional Transportation could report a net profit on its quarterly financial statements filed with its March 31, 1999 Form 10-Q.

24. In order to inflate the company's revenue for the first quarter of 1999, Bakal and Dial directed and caused the recording of fictitious receivables on the books of Professional Transportation by directing the re-recording of several hundred previously paid invoices to customers, totaling approximately $304,000.

25. To record the fictitious receivables, Dial directed Professional Transportation employees to re-enter into the company's accounting system certain information from old invoices that had been previously billed and collected.

26. In order to conceal the fraud, the old invoices were frequently re-recorded under a different customer's name, often with a false address. New invoices for the re-billed amount were not printed nor mailed.

27. Dial included these re-recorded amounts in the sales revenue and accounts receivable balances reported in Professional Transportation's quarterly financial statements.

28. The inflated accounts receivable balances were also reported to SouthTrust Bank, Professional Transportation's line of credit provider.

29. As a result of these actions, Professional Transportation overstated its revenues and net income for the first quarter of 1999 by approximately $304,000. This resulted in the company reporting a profit of $86,168 in lieu of a net loss of ($217,676).

30. On May 18, 1999, Bakal and Dial caused the company to issue false press releases announcing the fictitious first quarter 1999 results.

31. Bakal and Dial repeated this process of recording fictitious sales revenue from re-billed invoices during the second and third quarters of 1999. Baker and Dial directed the recording of approximately $830,442 of fictitious invoices in the second quarter of 1999. They directed the recording of approximately $986,783 of fictitious invoices in the third quarter of 1999.

32. During the nine months ended September 30, 1999, Bakal and Dial fraudulently re-recorded approximately 1,800 invoices totaling $2.1 million on the company's general ledger system.

33. The approximately 1800 re-billed invoices caused Professional Transportation to report a net profit in lieu of a net loss on its financial statements included in the Forms 10-Q filed with the Commission for each of the first three quarters of 1999, as detailed below:

Net Income (Loss)

Report

Quarter Ended

Filing Date

As Reported

Should Have Been

Difference

% Overstated

10-Q

3/31/99

5/19/99

$86,168

($217,676)

$303,844

140%

10-Q

6/30/99

8/16/99

$122,492

($707,950)

$830,442

117%

10-Q

9/30/99

11/15/99

$194,437

($792,346)

$986,783

125%

34. On May 18, 1999, August 10, 1999, and November 8, 1999, Professional Transportation released press releases announcing falsely the aforementioned results.

35. In May 1999, due in part to Professional Transportation's reported profitability for the first quarter of 1999, SouthTrust agreed to further extend the maturity date of the line of credit facility, until September 30, 1999. The bank subsequently extended the maturity date into the year 2000.

BAKAL AND DIAL CAUSE THE NOTES ACCOMPANYING PROFESSIONAL TRANSPORTATION'S 1999 ANNUAL AND FIRST QUARTER 2000 FINANCIAL STATEMENTS TO BE MATERIALLY MISSTATED

36. In early 2000, Bakal and Dial deleted the $2.1 million of fictitious invoices from Professional Transportation's internal accounting books and records in order to avoid possible detection of their scheme by Yohalem Gillman, Professional Transportation's outside auditors, who were conducting the 1999 year-end audit of the company.

37. On or about April 2000, Yohalem Gillman noticed a $2.1 million difference on a revised version of the company's accounts receivable sub-ledger. When questioned, Dial told the auditors that the sub-ledger difference was due to certain old invoices that were recently written off by the company.

38. What Dial told Yohalem Gillman was untrue because the 1999 invoices written off were actually the re-recorded invoices that Professional Transportation used during the first three quarters of 1999 to artificially inflate the company's revenues.

39. Believing Dial's false explanation, Yohalem Gillman asked Dial for documentation supporting the validity of the invoices being written off. Since the invoices were actually fictitious, Dial could not provide any supporting documentation, and falsely told Yohalem Gillman that the time to locate the documentation, which she claimed was not maintained in Professional Transportation's current offices, would be substantial, if the documentation could be found at all. She indicated that the documentation could not be provided in time for completion of the 1999 year-end audit.

40. After further inquiry, Yohalem Gillman was mistakenly led to believe that the recording of the $2.1 million was an error, not an intentional misstatement. Based upon information provided by Bakal and Dial, other representatives of Professional Transportation falsely advised Yohalem Gillman that the recording of the $2.1 million was due to several factors, including substantial changes in the company's data processing and operating systems, and loss of a substantial number of its accounting staff due to the company's moving its headquarters during 1999. These changes and loss of staff allegedly caused difficulty in the billing and collection of certain outstanding invoices, which were supposedly re-billed by Professional Transportation during the first nine months of 1999 in order to try to collect them.

41. Based upon its belief that the recording of the $2.1 million was an error, Yohalem Gillman required Professional Transportation to record reversing journal entries to its accounting books and records to correct the sales and accounts receivable balances ultimately reported on its 1999 financial statements.

42. The notes to the 1999 annual financial statements included with the Form 10-K filed with the Commission in 2000 explained "sales and receivables of $2,100,000, upon review of management, were determined to have been inappropriately recorded during the first three quarters of 1999." This note, based upon information provided by Bakal and Dial, is misleading, since it failed to fully explain that the adjustment was the result of fictitious revenue and receivables fraudulently recorded by Bakal and Dial. Bakal and Dial signed the Form 10-K.

43. Professional Transportation also issued a misleading press release dated April 17, 2000, which stated that the company adjusted revenue based upon sales that were recorded in error in prior quarters. The release omitted to disclose that the sales were intentionally and fraudulently recorded.

44. The 1999 Form 10-K was incorporated by reference in Post-Effective Amendment No. 1 to Professional Transportation's IPO registration statement on Form SB-2, which the company filed on April 17, 2000 and which became effective as of May 4, 2000. This filing was signed by Bakal and Dial.

45. Professional Transportation restated its 1999 quarterly results in a Form 10-Q filed on May 15, 2000. While the numerical financial restatements were correct, the reason given for the restatements was misleading because it omitted any mention of the fraudulent conduct of Bakal, Dial and Kelly. Note 6 to the financial statements in the first quarter 2000 Form 10-Q claimed that the reason for the misstated 1999 quarterly results was primarily due to Professional Transportation moving its headquarters, which reportedly caused much of the company's accounting staff to resign as well as " . . . substantial changes in the [c]ompany's data processing systems and operations." These were false statements because Bakal and Dial knowingly caused to be booked the fictitious revenue. Bakal and Dial signed the Form 10-Q.

THE SCHEME TO OVERSTATE EARNINGS DURING 2000

46. In December 1999, Bakal sold his entire interest in Professional Transportation (2.5 million shares) to Logistics Management LLC for approximately $3 million.

47. Logistics Management also owned a controlling share in U.S. Trucking, Inc., a non-affiliated competitor of Professional Transportation.

48. In early 2000, due to problems with its own computer systems, U.S. Trucking began to use Professional Transportation's computer systems for certain functions. Professional Transportation established a separate database within its operational computer system for U.S. Trucking truck load information, including invoicing and accounting records.

49. In approximately March 2000, U.S. Trucking sent the file copies of approximately $9 million of previously billed shipping invoices of one of its agents, Besok's Enterprises, to Professional Transportation's office in Georgia. Professional Transportation input this information into U.S. Trucking's database in the McLeod system, in order to create an account receivable aging report for U.S Trucking.

50. During the beginning of the second quarter of 2000, prior to Professional Transportation's finalizing and reporting its first quarter results, Kelly, on behalf of Bakal and Dial, directed Professional Transportation's computer staff to create a program that would allow the transfer of the Besok accounts receivable from U.S. Trucking's database maintained on Professional Transportation's computer system to Professional Transportation's accounts receivable sub-ledger.

51. Kelly accessed this program from the computer terminal in his office, and selected individual invoice amounts to transfer from U.S. Trucking's database to Professional Transportation's accounts receivable sub-ledger. The dollar amount transferred was based upon the weekly cash requirements of Professional Transportation, derived from information supplied by Bakal and Dial.

52. Kelly specifically selected the Besok receivables to transfer onto Professional Transportation's sub-ledger because Professional Transportation had previously received from U.S. Trucking the underlying Besok shipping documents in order to create an accounts receivable aging sub-ledger, necessitated by U.S. Trucking's computer system problems. Kelly used these Besok billing documents to create fictitious documentation files supporting the recorded invoices fraudulently transferred onto Professional Transportation's accounts receivable sub-ledger.

53. The transferred Besok receivables bypassed Professional Transportation's billing system and were directly recorded into an accounts receivable sub-ledger. As such, quarter-end journal entries were required to record the transferred receivables onto Professional Transportation's income statement and balance sheet.

54. Beginning at the end of the first quarter of 2000, Bakal and Dial directed Cole to record journal entries reflecting the sales and expenses "created" by the transferred invoice information.

55. Bakal and Dials directed Cole to run certain reports from the McLeod system that captured the dollar amount of the transferred Besok receivables. Cole used the information from these reports to prepare journal entries to record the revenue underlying the transferred Besok receivables on Professional Transportation's general ledger. In fact, the revenue was not Professional Transportation's revenue.

56. Bakal and Dial also directed Cole to record an agency expense for the recorded false invoices. Bakal asked Cole to run the draft income statement several times, each time telling Cole to decrease the agency expense used (effectively increasing the bottom line profit). Each time Cole ran the draft income statement, he gave it to Bakal and Dial for review and approval.

57. Finally, Bakal and Dial changed the amount of the fictitious offsetting agency expense to 61% (well below the industry standard of 85-90%), in order that Professional Transportation would meet a targeted income amount. Once Bakal and Dial decided to use an agency expense percentage of 61%, Cole prepared journal entries to record the agency expense.

58. Bakal and Dial continued the process of transferring U.S. Trucking invoice information, and Bakal, Dial and Cole continued recording journal entries to record transactions representing the transferred information, during the second and third quarters of 2000.

59. These re-billed invoices caused Professional Transportation to report a net profit in lieu of a net loss on its financial statements included in the Forms 10-Q filed with the Commission for each of the first two quarters of 2000, as detailed below:

Report

Quarter Ended

Filing Date

As Reported

Should Have Been

Difference

% Overstated

10-Q

3/31/00

5/15/00

$601, 695

($1,221,497)

$1,823,192

149%

10-Q

6/30/00

8/18/00

$748,371

($499,972)

$1,248,343

250%

60. On May 16, 2000 and August 21, 2000, Professional Transportation also issued false press releases announcing the aforementioned fraudulent results.

CLAIMS FOR RELIEF
COUNT I - FRAUD

Violations of Section 17(a) of the Securities Act [15 U.S.C. 77q(a)]

61. Paragraphs 1-60 are hereby realleged and are incorporated herein by reference.

62. Defendants Bakal and Dial, from 1999 through the second quarter of 2002, in connection with the offer or sale of securities, by use of the means and instruments of transportation and communication in interstate commerce or by use of the mails, directly and indirectly,

(a) employed devices, schemes and artifices to defraud purchasers of such securities;

(b) obtained money or property by means of untrue statements of material fact or omissions to state a material fact necessary in order to make the statements made, not misleading; and

(c) engaged in transactions, practices and a course of business which operated as a fraud or deceit upon the purchasers of such securities, all as more particularly described in the paragraphs above.

63. Defendants Bakal and Dial knowingly, intentionally and/or recklessly engaged in the aforementioned devices, schemes and artifices to defraud. In engaging in such devices, schemes and artifices to defraud, Bakal and Dial acted with scienter, that is, with intent to deceive, manipulate or defraud or with a severe reckless disregard for the truth.

64. By reason of the foregoing, Defendants Bakal and Dial, directly and indirectly, have violated and unless restrained and enjoined, will continue to violate Section 17(a) of the Securities Act [15 U.S.C. 77q(a)].

COUNT II - FRAUD

Violations of Section 10(b) of the Exchange Act [15. U.S.C.
78j(b)] and Rule 10b-5 thereunder [17 C.F.R. 240.10b-5]

65. Paragraphs 1 through 60 are hereby realleged and are incorporated herein by reference.

66. Defendants Bakal and Dial, from 1999 through the second quarter 2000, and Defendant Cole, for the first two quarters of 2000, in connection with the purchase or sale of securities described herein, by the use of the means and instrumentalities of interstate commerce and by use of the mails, directly and indirectly:

a) employed devices, schemes, and artifices to defraud;

b) made untrue statements of material facts and omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and

c) engaged in acts, practices, and courses of business which would and did operate as a fraud and deceit upon the purchasers of such securities, all as more particularly described in the paragraphs above.

67. Defendants Bakal, Dial and Cole knowingly, intentionally, and/or recklessly engaged in the aforementioned devices, schemes and artifices to defraud, made untrue statements of material facts and omitted to state material facts, and engaged in fraudulent acts, practices and courses of business. In engaging in such conduct, Defendants Bakal, Dial and Cole acted with scienter, that is, with intent to deceive, manipulate or defraud or with a severe reckless disregard for the truth.

68. By reason of the foregoing, Defendants Bakal, Dial and Cole, directly and indirectly, have violated and, unless enjoined, will continue to violate Section 10(b) of the Exchange Act [15 U.S.C. 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. 240.10b-5].

COUNT III-AIDING AND ABETTING FRAUD

Liability of Cole for Aiding and Abetting Professional
Transportation's Violations of Section 10(b) of the Exchange Act
[15 U.S.C. 78j(b)] and Rule 10b-517 C.F.R. 240.10b-5]
thereunder

69. Paragraphs 1 through 60 are hereby realleged and are incorporated herein by reference.

70. Defendant Cole, for the first two quarters of 2000, aided and abetted Professional Transportation's violations of Section 10(b) of the Exchange Act [15 U.S.C. 78j(b)] and Rule 10b-5 [17 C.F.R. 240.10b-5] thereunder, which occurred when Professional Transportation filed annual and periodic reports that contained financial statements that were not prepared in conformity with GAAP and contained material misstatements. Through the conduct described in the above paragraphs, Cole knowingly or recklessly substantially assisted Professional Transportation's violations of this section and rules.

71. By reason of the foregoing, Defendant Cole aided and abetted violations and unless enjoined, will continue to aid and abet violations of Section 10(b) of the Exchange Act [15 U.S.C. 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. 240.10b-5].

COUNT IV-AIDING AND ABETTING REPORTING PROVISIONS

Liability of Bakal, Dial and Cole for Aiding and Abetting
Professional Transportation's Violations of Section 13(a) of the
Exchange Act [15 U.S.C. 78m(a)] and Rules 12b-20 and 13a-13
thereunder [17 C.F.R. 240.12-20 and 240.13a-13]

Liability of Bakal and Dial for Aiding and Abetting
Professional Transportation's Violation of Rule 13a-1
[17 C.F.R. 240.13a-1]

72. Paragraphs 1 through 60 are hereby realleged and are incorporated herein by reference.

73. Defendants Bakal and Dial, from 1999 through the second quarter of 2000, and Defendant Cole, for the first two quarters of 2000, aided and abetted Professional Transportation's violations of Section 13(a) of the Exchange Act and Rules 12b-20 and 13a-13 thereunder, which occurred when Professional Transportation filed periodic reports that contained financial statements that were not prepared in conformity with GAAP and contained material misstatements. Additionally, Defendants Bakal and Dial, from 1999 through the second quarter of 2000, aided and abetted Professional Transportation's violations of Rule 13a-1, which occurred when Professional Transportation filed annual reports that contained financial statements that were not prepared in conformity with GAAP and contained material misstatements. Through the conduct described in the above paragraphs, Bakal, Dial and Cole knowingly or recklessly substantially assisted Professional Transportation's violations of this section and rules.

74. By reason of the foregoing, Defendants Bakal, Dial and Cole have aided and abetted violations, and, unless enjoined, will continue to aid and abet violations of, Section 13(a) of the Exchange Act [15 U.S.C. 78m(a)] and Rules 12b-20 and 13a-13 thereunder [17 C.F.R. 240.12-20 and 240.13a-13].

75. By reason of the foregoing, Defendants Bakal and Dial have aided and abetted violations, and, unless enjoined, will continue to aid and abet violations of, Exchange Act Rule 13a-1 [17 C.F.R. 240.13a-1].

COUNT V- AIDING AND BETTING BOOKS AND RECORDS AND INTERNAL CONTROLS VIOLATIONS

Liability of Bakal, Dial and Cole for Aiding and Abetting
Professional Transportation's Violations of Section 13(b)(2)(A)
of the Exchange Act
[15 U.S.C. 78m(b)(2)(A)]

76. Paragraphs 1 through 60 are hereby realleged and are incorporated herein by reference.

77. Defendants Bakal and Dial, from 1999 through the second quarter of 2000, and Defendant Cole, for the first two quarters of 2000, aided and abetted Professional Transportation's violations of Section 13(b)(2)(A) of the Exchange Act [15 U.S.C. 78m(b)(2)(A)], which occurred when Professional Transportation's failed to make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflected the transactions and dispositions of Professional Transportation's assets. Through the conduct described in the above paragraphs, Bakal, Dial and Cole knowingly or recklessly substantially assisted Professional Transportation's violations of these sections.

78. By reason of the foregoing, Defendants Bakal, Dial and Cole have aided and abetted violations, and, unless enjoined, will continue to aid and abet violations of, Section 13(b)(2)(A) of the Exchange Act [[15 U.S.C. 78m(b)(2)(A)].

COUNT VI- BOOKS AND RECORDS AND INTERNAL CONTROLS VIOLATIONS

Liability of Bakal, Dial and Cole for Violating
Section 13(b)(5) of the Exchange Act [15 U.S.C. 78m(b)(5)] and
Rule 13b2-1 [17 C.F.R. 240.13b2-1]
thereunder

79. Paragraphs 1 through 60 are hereby realleged and are incorporated herein by reference.

80. Defendants Bakal and Dial, from 1999 through the second quarter of 2000, made or caused to be made material false or misleading statements, or omitted or caused another to omit a material fact necessary to make a statement not misleading to an accountant in connection with an audit or examination of financial statements or a document or report required to be filed with the Commission.

81. By reason of the foregoing, Defendants Bakal, Dial and Cole, directly and indirectly, have violated and, unless enjoined, will continue to violate 13(b)(5) of the Exchange Act [15 U.S.C. 78m(b)(5)] and Rule 13b2-1 [17 C.F.R. 240.13b2-1] thereunder.

COUNT VII- FALSE STATEMENTS TO AUDITORS

Liability of Bakal and Dial for Violating Rule 13b2-2 [17 C.F.R. 240.13b2-2]

82. Paragraphs 1 through 60 are hereby realleged and are incorporated herein by reference.

83. Defendants Bakal and Dial, from 1999 through the second quarter of 2000, made or caused to be made material false or misleading statements, or omitted or caused another to omit a material fact necessary to make a statement not misleading to an accountant in connection with an audit or examination of financial statements or a document or report required to be filed with the Commission.

84. By reason of the foregoing, Defendants Bakal and Dial, directly and indirectly, have violated and, unless enjoined, will continue to violate Rule 13b2-2 [17 C.F.R. 240.13b2-2].

PRAYER FOR RELIEF

WHEREFORE, Plaintiff Commission, respectfully prays that the Court:

I.

Make findings of fact and conclusions of law in accordance with Rule 52 of the Federal Rules of Civil Procedure.

II.

Issue a permanent injunction enjoining defendants Bakal and Dial and their agents, servants, employees, attorneys, and all persons in active concert or participation with them who receive actual notice of the order by personal service or otherwise, and each of them:

from violating Section 17(a) of the Securities Act [15 U.S.C. 77q(a)];

from violating Section 10(b) of the Exchange Act [15 U.S.C. 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. 240.10b-5];

from violating Section 13(b)(5) of the Exchange Act [15 U.S.C. 78m(b)(5)] and Rules 13b2-1 and 13b2-2 thereunder [17 C.F.R. 240.13b2-1 and 240.13b2-2];

from aiding and abetting violations of Section 13(a) of the Exchange Act [15 U.S.C. 78m(a)] and Rules 12b-20, 13a-1 and 13a-13 thereunder [17 C.F.R. 240.12b-20, 240.13a-1 and 240.13a-13]; and

from aiding and abetting violations of Section 13(b)(2)(A) of the Exchange Act [15 U.S.C. 78m(b)(2)(A)].

III.

Issue a permanent injunction enjoining defendant Cole and his agents, servants, employees, attorneys, and all persons in active concert or participation with them who receive actual notice of the order by personal service or otherwise, and each of them:

from violating Section 10(b) of the Exchange Act [15 U.S.C. 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. 240.10b-5];

from violating Section 13(b)(5) of the Exchange Act [15 U.S.C. 78m(b)(5)] and Rule 13b2-1 thereunder [17 C.F.R. 240.13b2-1];

from aiding and abetting violations of Section 10(b) of the Exchange Act [15 U.S.C. 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. 240.10b-5];

from aiding and abetting violations of Section 13(a) of the Exchange Act [15 U.S.C. 78m(a)] and Rules 12b-20 and 13a-13 thereunder [17 C.F.R. 240.12b-20 and 240.13a-13]; and

from aiding and abetting violations of Section 13(b)(2)(A) of the Exchange Act [15 U.S.C. 78m(b)(2)(A))].

IV.

Issue an Order requiring defendant Bakal to disgorge any ill-gotten gains and losses avoided as a result of the conduct alleged in the Commission's Complaint, plus pay prejudgment interest thereon.

V.

Issue an Order requiring defendants Bakal, Dial and Cole, pursuant to Section 20(d) of the Securities Act [15 U.S.C. 77t(d)] and Sections 21(d)(3) and 21A of the Exchange Act [15 U.S.C. 78u(d)(3) and 78u-1], to pay civil monetary penalties.

VI.

Issue an Order pursuant to Section 20(e) of the Securities Act [15 U.S.C. 77t(e)] and Section 21(d)(2) of the Exchange Act [15 U.S.C. 78u(d)(2)] permanently prohibiting defendants Bakal and Dial from acting as an officer or director of any issuer that has a class of securities registered with the Commission pursuant to Section 12 of the Exchange Act [15 U.S.C. 78l] or that is required to file reports with the Commission pursuant to Section 15(d) of the Exchange Act [15 U.S.C. 78o(d)].

VII.

Issue an Order that retains jurisdiction over this action in order to implement and carry out the terms of all orders and decrees that may have been entered or to entertain any suitable application or motion by the Commission for additional relief within the jurisdiction of this Court.

VIII.

Grant such other and further relief as may be necessary and appropriate.


Dated: September , 2003

RESPECTFULLY SUBMITTED,
________________________
William P. Hicks
DISTRICT TRIAL COUNSEL
Ga. Bar No. 351649

COUNSEL FOR PLAINTIFF
U. S. SECURITIES AND EXCHANGE
COMMISSION
3475 Lenox Road, N.E., Suite 1000
Atlanta, Georgia 30326-1234
Tel. (404) 842-7600
Fax. (404) 842-7666


http://www.sec.gov/litigation/complaints/comp18388.htm


Modified: 10/06/2003