REGIS POSSINO THE CON MAN WAS BEHIND MADERA INTL INC and had his account at the Boiler Room LA JOLLA CAPITAL CORP
Notices of Proposed Sale Reported on Form 144 of POSSINO REGIS Description
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Company
Select a company below for more information. Relation File Date Shares Broker
MADERA INTL INC N 11/7/1996 40,334
LA JOLLA CAPITAL CORP
Regis Possino (CON MAN)and the SEC. Possino has to be sweating this one. Not only did Mandarin Overseas sell Madera the rights to an alleged mahogony concession in Peru for $1.5million , but he might also be tied to the dubious deal with Ralph
Financial Corp. for "400,000 hectares of timber-producing property in
Brazil.''
Madera issued more than 12 million shares of preferred stock (plus 2
million shares of common to somebody as a finder's fee) only to encounter
ownership problems nine months later.
The only Ralph Financial Corp. I could turn up was a Santa Monica company
that was suspended by the California Secretary of State's office in1988.
But my Nexis search for incorporations connected with Madera International
Inc. did turn up this:
NEVADA SECRETARY OF STATE, CORPORATE RECORD
NAME: COMMONWEALTH INVESTMENTS, LTD.
TYPE OF CORPORATION: REGULAR(DOMESTIC PROFIT)
CORPORATE STATUS: PERMANENTLY REVOKED 01/01/2001
STATUS-COMMENT:
LIABILITY STATUS: HAS LIMITED LIABILITY
DURATION: PERPETUAL
DATE OF INCORPORATION/QUALIFICATION: 03/04/1994
STATE-INCORP: NEVADA
REGISTERED AGENT: DANIEL LEZAK
STATUS: ACCEPTED 03/04/1994
NUMBER OF COMPANIES REPRESENTED BY REGISTERED AGENT: 50
NUMBER OF COMPANIES REPRESENTED BY REGISTERED AGENT IN GOOD STANDING: 5
REGISTERED OFFICE: P.O. BOX 7202
1098 LUCERNE WAY
INCLINE VILLAGE, NV 89450
PURPOSE: ALL LEGAL ACTIVITIES
CAPITAL/STOCK:
CAPITAL: $1,000
PAR SHARES: 100,000
PAR VALUE: $.010
ANNUAL-REPORT:
LAST REPORT: ANNUAL LIST OF OFFICERS
LAST REPORT FILED ON: 07/20/1994
ENDING YEAR: 1995
MORE OFFICERS ON LIST
PRESIDENT: RALPH MARTINEZ
SUITE 10
3233 DONALD DOUGLAS LOOP
SANTA MONICA, CA 90405
STATUS: ADDED 07/20/1994
SECRETARY: RALPH MARTINEZ
SUITE 10
3233 DONALD DOUGLAS LOOP
SANTA MONICA, CA 90405
STATUS: ADDED 07/20/1994
TREASURER: NONE SHOWN
NONE SHOWN
NONE SHOWM, UN
STATUS: ADDED 07/20/1994
INCORPORATORS: MADERA INTERNATIONAL, INC.
23548 CALABASAS RD. #203
CALABASAS, CA 91302
CORPORATION NUMBER: 3463-1994
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3233 Donald Douglas Loop....Where have I seen that address before?
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CALIFORNIA SECRETARY OF STATE, CORPORATE RECORD.
NAME: PACIFIC RIM CAPITAL, INC. WHICH WILL DO BUSINESS IN CALIFORNIA AS DELAWARE PACIFIC RIM
CAPITAL, INC.
TYPE OF CORPORATION: STATEMENT AND DESIGNATION BY FOREIGN CORPORATION
CORPORATE STATUS: ACTIVE
DATE OF INCORPORATION/QUALIFICATION: 10/25/1999
MAILING ADDRESS: CT CORPORATION SYSTEM
818 W SEVENTH STREET
LOS ANGELES, CA 90017
STATE OF INCORPORATION: DE
REGISTERED AGENT: REGIS POSSINO
REGISTERED OFFICE: 3233 DONALD DOUGLAS LOOP SOUTH
SANTA MONICA, CA 90405
TAX-BASIS: STOCK
CORPORATE NUMBER: 2180354
CALL LEXIS DOCUMENT SERVICES FOR ALL YOUR CORPORATE NEEDS. 800-634-9738
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UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 44815 / September 19, 2001
ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 1450 / September 19, 2001
ADMINISTRATIVE PROCEEDING
File No. 3-10578
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In the Matter of
REGINA FERNANDEZ,
Respondent.
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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 against Regina Fernandez ("Fernandez") pursuant to Section 21C of the Securities Exchange Act of 1934 ("Exchange Act").
II.
In anticipation of the institution of these proceedings, Fernandez has submitted an Offer of Settlement, which the Commission has determined to accept. Solely for the purposes of these proceedings and any other proceedings brought by or on behalf of the Commission or to which the Commission is a party, Fernandez, without admitting or denying the findings set forth herein, except that she admits the jurisdiction of the Commission over her and over the subject matters set forth herein, consents to the issuance of this Order Instituting Public Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings and Imposing a Cease-and-Desist Order ("the Order").
III.
On the basis of this Order and Fernandez' Offer of Settlement, the Commission makes the following findings:1
A. RESPONDENT
Fernandez, age 41, was the corporate secretary of Madera International, Inc. ("Madera") from March 1996 until April 1999. She signed Madera's fiscal 1998 Annual Report filed with the Commission as Madera's secretary-treasurer and chief financial officer.
B. THE ISSUER
Madera was at all times relevant to this proceeding a Nevada corporation headquartered in Coral Gables, Florida, engaged in the timber business. Its common stock is registered with the Commission pursuant to Section 12(g) of the Exchange Act and was traded on the Electronic Bulletin Board operated by the National Association of Securities Dealers.
C. MADERA'S FALSE FINANCIAL STATEMENTS
During its fiscal year ended March 31, 1998, Madera overstated its sales revenues in financial statements filed with the Commission by a total of $2,654,934. This financial fraud was accomplished by the preparation and recordation of false sales invoices and the submission of false accounts receivable confirmations to Madera's independent auditors. Had Madera not recorded these fraudulent sales, it would have reported a pre-tax loss of $1,489,264 for fiscal 1998, rather than the $1,165,670 pre-tax profit it falsely reported in the financial statements included in its annual report on Form 10-K.
In fiscal 1999, Madera recorded additional fraudulent sales in the total amount of $1,759,947. In its quarterly report on Form 10-Q for the first quarter of fiscal 1999, Madera reported timber sales of $1,819,350. This amount included a fraudulent sale in the amount of $401,030. As a result of recording this bogus sale, Madera falsely reported a pre-tax profit of $215,694 for that quarter rather than a pre-tax loss of $185,336. During the fourth quarter of fiscal 1999, Madera recorded additional bogus sales totaling $1,358,917. These fraudulent sales were reflected in sales figures contained in a Madera press release dated May 4, 1999, which announced what the company purported to be record revenues and profits for fiscal 1999 and "the complete turnaround afforded the company at the hands of present management...." The fraudulent sales recorded in fiscal 1999 were later reversed in connection with the audit of Madera's financial statements for its fiscal year ended March 31, 1999.
D. FERNANDEZ' ROLE
During the period in question, Fernandez was responsible for, among other things, Madera's accounting and bookkeeping functions as well as furnishing Madera's independent auditors with documents and information to support their audits of Madera's financial statements. In connection with Madera's fiscal 1998 audit, Fernandez prepared invoices totaling $2,654,934 that she knew or was reckless in not knowing were materially false and misleading and provided
these invoices to Madera's independent auditors. In addition, Fernandez prepared audit confirmation requests for completion by certain entities that Madera represented to be customers and whose responses were relied upon by Madera's auditors. Fernandez, however, knew or was reckless in not knowing but failed to disclose to the auditors that these entities had not, in fact purchased any product from Madera.
In connection with Madera's fiscal 1999 audit, Fernandez prepared and furnished to the company's auditors invoices amounting to $1,358,917 that she knew or was reckless in not knowing were false and misleading. In addition, Fernandez prepared audit confirmation requests for completion by certain purported customers of Madera whose responses were relied upon by Madera's auditors. Fernandez, however, knew or was reckless in not knowing but failed to disclose to the auditors that these entities had not, in fact, purchased any product from Madera. Further, Fernandez furnished the company's auditors with fabricated cash receipts records.
IV.
A. Violations of the Reporting Provisions
Commission Rules 13a-1 and 13a-13 require issuers whose securities are registered pursuant to Section 12 of the Exchange Act to file annual and quarterly reports, respectively. Rule 12b-20 requires that the reports contain such information as is necessary to insure that the statements made in those reports are not, under the circumstances, misleading. Financial statements incorporated in Commission filings must comply with Regulation S-X, which in turn requires conformity with Generally Accepted Accounting Principles ("GAAP"). As described above, Madera violated these provisions by filing annual and quarterly reports with the Commission that included materially false financial statements.
Fernandez caused Madera's violations of the reporting provisions of the Exchange Act by preparing false and misleading invoices and recording them in Madera's books and records and by furnishing Madera's auditors with these false and misleading invoices, and with false and misleading cash receipts records.
B. Violations of the Antifraud Provisions
Material misstatements or omissions made with scienter in connection with the purchase or sale of securities violate Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. See, e.g., SEC v. Texas Gulf Sulphur Co., 401 F.2d 833 (2d Cir. 1968), cert. denied, 394 U.S. 976 (1969). Fernandez violated Section 10(b) and Rule 10b-5 thereunder by intentionally or recklessly causing materially false and misleading periodic reports to be filed with the Commission, as detailed above. In so doing, Fernandez satisfies the scienter requirement of Section 10(b) and Rule 10b-5.
C. Violations of the Books and Records and Internal Accounting Control Provisions
Section 13(b)(2) of the Exchange Act requires an issuer to make and keep books, records, and accounts which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of its assets. Section 13(b)(5) provides that no person shall knowingly circumvent or knowingly fail to implement a system of internal accounting controls, or knowingly falsify any accounting book, record or account. Rule 13b2-1 promulgated under Section 13(b)(2) provides that no person shall, directly or indirectly, falsify or cause to be falsified any book, record, or account subject to Section 13(b)(2). Rule 13b2-2, also promulgated under Section 13(b)(2), prohibits any officer or director from making or causing to be made any materially false or misleading statement to an accountant in connection with an audit of the issuer's financial statements or the preparation of any filing with the Commission.
Fernandez violated Section 13(b)(5) and Rule 13b2-1 by falsifying Madera's books and records in connection with the recording of fraudulent sales and receivables. She violated Rule 13b2-2 by providing Madera's auditors with false sales invoices and cash receipts records, and by failing to disclose to the auditors that the unexecuted accounts receivable confirmations she prepared for them did not reflect actual receivables of the company.
V.
Based on the foregoing, the Commission finds that Fernandez violated Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1, and 13b2-2 thereunder and caused violations by Madera of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder.
VI.
In view of the foregoing, the Commission finds that it is appropriate to impose the following relief as agreed to in the Offer of Settlement.
Accordingly, IT IS HEREBY ORDERED, pursuant to Section 21C of the Exchange Act, that Fernandez cease and desist committing or causing any violations and any future violations of Sections 10(b) and 13(b)(5) of the Exchange Act and Exchange Act Rules 10b-5, 13b2-1 and
13b2-2 and from causing any violations and any future violations of Section 13(a) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1 and 13a-13.
By the Commission.
Jonathan G. Katz
Secretary
Footnote
1 The findings herein are made pursuant to Fernandez' Offer of Settlement and are not binding on any other person or entity in this or in any other proceeding.
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