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U.S. Securities and Exchange Commission

LITIGATION RELEASE NO. 18801 / July 27, 2004

ACCOUNTING AND AUDITING ENFORCEMENT RELEASE NO. 2063 / July 27, 2004

SECURITIES AND EXCHANGE COMMISSION V. MICHAEL SCRIVO, 04-CV-5837 (S.D.N.Y.) (RCC)

SEC CHARGES FORMER OFFICERS OF VICON FIBER OPTICS CORPORATION WITH FINANCIAL FRAUD

The Commission today announced that it filed a complaint in the United States District Court for the Southern District of New York against Vicon Fiber Optics Corporation's former vice president of operations, Michael Scrivo. Vicon, headquartered in Pelham Manor, New York, manufactures and sells fiber optic illuminating systems. The case involves a scheme to inflate Vicon's inventory in Vicon's 1999 annual report and quarterly report for the second quarter of 2000. In its complaint, the Commission charged Scrivo with violations of the antifraud, reporting, books and records, and internal controls provisions of the Securities Exchange Act of 1934 ("Exchange Act"). The Commission also announced that it instituted settled cease-and-desist proceedings and proceedings pursuant to Rule 102(e) of the Commission's Rules of Practice against Vicon's former CFO Leslie Wasser. In the cease-and-desist proceeding, the Commission made findings that Wasser violated those same sections.

In its complaint, the Commission alleged that Scrivo engaged in a fraudulent scheme to inflate Vicon's inventories in its 1999 year-end financial statements by including inventory, which did not exist. In furtherance of the scheme, Scrivo fabricated documents that reflected non-existent inventory and as a result, Vicon's reported net loss was decreased by 22% in its 1999 financial statement. Scrivo subsequently attempted to conceal and to reverse the overstated inventory by falsely reporting in Vicon's second quarter 2000 Form 10-Q that the inventory was defective and had been scrapped.

Without admitting or denying the allegations of the complaint, Scrivo consented to the entry of a final judgment enjoining him from violations of Sections 10(b), 13(a), 13(b)(2), and 13(b)(5) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1, 13a-13, 13b2-1, and 13b2-2 thereunder. Scrivo also consented to be barred from acting as an officer or director of a public company and agreed to pay $20,000 in civil penalties.

In its administrative Order, the Commission found that Wasser, a certified public accountant, committed or caused the same violations of the Exchange Act. Wasser consented to the entry of an administrative Order requiring him to cease and desist from committing or causing and violations and any future violations of the same provisions and denying him the privilege of appearing or practicing before the Commission as an accountant.

 

http://www.sec.gov/litigation/litreleases/lr18801.htm


Modified: 09/03/2004