UNITED STATES SECURITIES AND EXCHANGE COMMISSION

     LITIGATION RELEASE NO. 15425 / July 29, 1997

     ACCOUNTING AND AUDITING ENFORCEMENT 
     RELEASE NO. 942 / July 29, 1997 

     SEC v. MITCHELL A. HAMMER AND JOSEPH LETZELTER, JR., Civil Action No. 97-
     6892-CIV-ZLOCH (S.D. Fla. filed July 25, 1997)

          On July 25, 1997, the Commission filed a civil injunctive action
     against two former employees of Sheffield Industries, Inc., a bankrupt
     manufacturing company which had been based in Miami, Florida.  The
     Commission's complaint alleges that between June 1991 and January 1993
     Mitchell A. Hammer (Hammer), Sheffield's former CEO, and Joseph Letzelter,
     Jr. (Letzelter), Sheffield's former controller, perpetrated a massive fraud
     on Sheffield's investors by maintaining two sets of books and by filing
     materially false financial reports with the Commission on Sheffield's
     behalf.  The complaint seeks permanent injunctive relief and officer and
     director bars against both defendants.

          The complaint alleges that six of Sheffield's SEC filings, which
     Hammer signed, overstated accounts receivable and inventory by as much as
     40%, and falsely stated that Sheffield had complied with a critical loan
     covenant from a principal lender when, in fact, it was in default
     thereunder.  Hammer, with Letzelter's assistance, orchestrated the scheme
     by causing Sheffield to keep two sets of books and records: a secret set
     which accurately reflected the company's deteriorating financial condition,
     and a public set which fraudulently overstated the company's financial
     condition.  Thus, the complaint alleges that Sheffield, through Hammer,
     Letzelter and others, failed to make and keep books and records which
     accurately reflected Sheffield's financial and accounting transactions, and
     failed to maintain a system of internal accounting controls sufficient to
     provide assurances that accounting transactions were recorded as necessary
     to permit the proper preparation of financial statements in conformity with
     generally accepted accounting principles.

          The complaint also alleges that Hammer announced in a newswire report
     that he anticipated revenues for Sheffield for the fiscal year ended 1992
     to be approximately $36 million, with anticipated net profits of
     approximately $.75 per share on 2.6 million average shares outstanding (or
     approximately $1.95 million in net profits.)  However, on December 17,
     1992, Sheffield reported losses of $1,800,000.  The complaint alleges that
     Hammer had no reasonable basis for Sheffield's July 1992 profit projection.

            Sheffield was not named in the complaint because it had recently
     liquidated under Chapter 7 of the Bankruptcy Code.

          The staff seeks to obtain officer and director bars and permanent
     injunctions against both defendants, based on: Hammer's alleged individual
     violations of Section 17(a) of the Securities Act of 1933 (Securities Act),
     and Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934

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     (Exchange Act) and Rules 10b-5 and 13b2-1 thereunder, and as a control
     person, of Sections 13(a) and 13(b)(2) of the Exchange Act and Rules 12b-
     20, 13a-1, 13a-11 and 13a-13 thereunder; and based on Letzelter's alleged
     violations of Section 17(a) of the Securities Act, and Sections 10(b) and
     13(b)(5) of the Exchange Act and Rules 10b-5 and 13b2-1 thereunder.
















































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