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To: Axxel who wrote (9996)6/10/2002 3:03:53 PM
From: StockDung  Read Replies (1) | Respond to of 19428
 
In the Matter of Ashford.com, Inc., Kenneth E. Kurtzman, Brian E. Bergeron and Amazon.com, Inc., Administrative Proceeding File No. 3-10797 and Securities Exchange Act Release No. 46052

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
Litigation Release No. 17550 / June 10, 2002
Accounting and Auditing Enforcement
Release No. 1574 / June 10, 2002

Securities and Exchange Commission v. Kenneth E. Kurtzman and Brian E. Bergeron, 1:02CV01126 (D.D.C.) (June 10, 2002).

In the Matter of Ashford.com, Inc., Kenneth E. Kurtzman, Brian E. Bergeron and Amazon.com, Inc., Administrative Proceeding File No. 3-10797 and Securities Exchange Act Release No. 46052.

SEC FILES SETTLED CEASE-AND-DESIST ORDER AGAINST ASHFORD.COM, INC., TWO OF ITS EXECUTIVES AND AMAZON.COM, INC.; THE COMMISSION FINDS THAT ASHFORD.COM BEAT ANALYSTS' PRO FORMA EARNINGS EXPECTATIONS BY MISSTATING ITS GAAP RESULTS

The Securities and Exchange Commission announced today the filing of a civil action filed in federal court against Kenneth E. Kurtzman (Ashford.com's former Chief Executive Officer) and Brian E. Bergeron (Ashford.com's former Vice President for Finance). Kurtzman and Bergeron consented, without admitting or denying the allegations in the Commission's complaint, to pay civil penalties of $60,000 and $25,000, respectively.

The Commission also announced the filing of a settled cease-and-desist order against Ashford.com, Inc., Kurtzman, Bergeron and Amazon.com, Inc. The Commission's Order finds that, in March 2000, Kurtzman and Bergeron, on behalf of Ashford.com, improperly deferred $1.5 million in expenses under a contract with Amazon.com, causing Ashford.com to materially understate its marketing expenses and allowing the company to report a pro forma net loss of $0.30 per share, just beating analysts' pro forma earnings estimates of a net loss of $0.31 per share for the quarter ended March 31, 2000. Without the understatement, Ashford.com would have reported a pro forma loss of $0.32 per share. The improper deferral resulted from the settlement of a dispute with Amazon.com using two separate documents which were prepared by Amazon.com at Ashford.com's request. Ashford.com subsequently failed to disclose one of the two documents to its auditors.

The Order also finds that in September 2000, Ashford.com misstated its pro forma results by changing the classification of expenses on its income statement. In two previous quarters, Ashford.com had properly classified these expenses as marketing expenses. But in September 2000, without disclosing that it had made a change, Ashford.com classified the expenses as "depreciation and amortization," which improved the company's pro forma results (which did not take depreciation and amortization into account).

Additionally, during 2000, Ashford.com misclassified a portion of the expenses arising under its contracts with Amazon.com, causing Ashford.com to materially understate its reported marketing expenses and improve its pro forma results. Under these agreements, Ashford.com issued common stock in exchange for advertising placements and an agreement not to compete. Ashford.com, however, classified all of the expenses under this contract as "depreciation and amortization." This classification was not in conformity with Generally Accepted Accounting Principles, because Ashford.com should have classified the portion attributable to advertising placements as marketing expenses.

The Commission's Order further finds that:

Ashford.com violated Sections 10(b), 13(a) and 13(b)(2)(A) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-1 and 13a-13 thereunder;

Kurtzman violated Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1 and 13b2-2 thereunder and was a cause of Ashford.com's violation of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder;

Bergeron violated Exchange Act Rule 13b2-1 and was a cause of Ashford.com's violation of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder; and

Amazon.com, Inc. was a cause of Ashford.com's violation of Section 13(a) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder.
Ashford.com, Kurtzman, Bergeron and Amazon.com consented, without admitting or denying the findings in the Commission's Order, to cease-and-desist from committing or causing violations of the provisions of the federal securities laws cited above. The allegations in the Commission's civil action are substantially the same as set forth in the Commission's Order.

SEC Complaint in this matter.

sec.gov

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To: Axxel who wrote (9996)6/10/2002 3:17:54 PM
From: StockDung  Read Replies (2) | Respond to of 19428
 
Mob Boss John Gotti Dies at Age 61

By RICHARD PYLE
.c The Associated Press

NEW YORK (AP) - John Gotti, who swaggered, schemed and murdered his way to the pinnacle of organized crime in America only to be toppled by secret FBI tapes and a turncoat mobster's testimony, died at a prison hospital Monday. He was 61.

The U.S. Medical Center for Federal Prisoners in Springfield, Mo., announced the death of the former Mafia boss. Gotti had suffered from throat cancer and had been moved to the prison hospital from the maximum-security federal prison in Marion, Ill.

Once known as the ``Dapper Don'' for his fine double-breasted suits and confident bearing, and as the ``Teflon Don'' after a series of acquittals, Gotti was sentenced to life in 1992 for racketeering and six killings. His victims included ``Big Paul'' Castellano, whom he succeeded as boss of New York's Gambino crime family in 1985.

Gotti reigned for six years as the nation's most high-profile mobster, passing himself off as a plumbing supply salesman while strutting about in $2,000 Brioni suits and sneering at law enforcers who kept trying to put him behind bars. Some crime chroniclers called him the most important gangster since Al Capone, a comparison Gotti did not discourage.

When Gotti finally was convicted by a federal jury in Brooklyn, James Fox, the FBI agent in charge in New York, declared: ``The Teflon is gone. The don is covered with Velcro.''

In the end, Gotti's leadership of the Gambinos led to the loss of power and money for the crime family, because his high profile attracted so much attention from prosecutors.

His undoing was Salvatore ``Sammy Bull'' Gravano, his onetime closest confidant and underboss who turned government witness.

When Gotti moved to take over the Gambinos, they were the biggest and most powerful of the city's five Mafia families, with 300-plus ``made'' members, 2,000 ``associates'' and fingers in every pie, including the garment district, garbage hauling, construction, extortion and loan sharking.

He took charge by murdering Castellano, who had angered Gotti and others with, among other things, his ban on drug trafficking. By some accounts, Gotti feared Castellano was plotting to eliminate him, so he carried out a pre-emptive strike.

Gotti and Gravano watched from half a block away as a hit squad in matching raincoats ambushed Castellano and his driver outside a Manhattan steakhouse on Dec. 16, 1985. They then cruised brazenly past the scene to make sure the pair were dead.

Gotti's seizure of power made him a criminal celebrity. He appeared on the cover of Time magazine and was glamorized as a gangster the law couldn't bring down.

Already in 1984, he had walked free when when he was charged with attacking a motorist over a minor traffic dispute. The alleged victim refused to identify him in court, inspiring a tabloid headline, ``I FORGOTTI.'' In 1987, Gotti beat a federal rap in Brooklyn by bribing a juror, and in 1990, another apparent payoff helped win his acquittal in the attempted murder of a union official.

Embarrassed federal authorities finally made gains through electronic surveillance, planting bugs in Gotti's Manhattan headquarters, his social club and an apartment that Gotti borrowed for private discussions.

In 1990, FBI agents arrested Gotti, Gravano and crony Frank Locascio on charges of racketeering and murder, the key charge being the Castellano rubout.

At pretrial hearings, prosecutors played tapes of Gotti delivering profane, egotistic tirades about ``whacking'' people and other mob topics. He said a crony was murdered because he ``didn't come in when I called.''

Weeks before the 1992 trial, Gravano cut a deal and became the star witness.

During the trial, Gotti smirked, preened and feigned boredom as Gravano explained the tapes and admitted his own participation in 19 murders. Prosecutors called him a more important witness than Joe Valachi, who had first exposed La Cosa Nostra in the 1960s.

Given Gotti's record of subverting justice, the jurors were tightly sequestered; even the judge didn't know their names. The jury found Gotti guilty on all 14 counts, including murder, racketeering and tax evasion.

From his underground cell at Marion, Ill., Gotti allegedly continued to control the Gambino family through his youngest son, John Jr., but his power and influence clearly waned. The younger Gotti eventually pleaded guilty to bribery, extortion, gambling and fraud and was sentenced to nearly 6 1/2 years.

Gravano, branded a ``rat'' by Gotti, continued to testify for the government in one mob trial after another. He eventually dropped out of the federal witness program and was indicted anew in Arizona for allegedly running an Ecstasy drug operation.

John Gotti was born Oct. 27, 1940, one of 13 children of poor immigrant parents from Naples. Gotti quit school at 16 and gravitated to petty crime. His violent ways drew the notice of Gambino family wiseguys in his Brooklyn neighborhood in the 1950s.

Within a few years, he was running cargo thefts at Kennedy Airport, for which he served three years. Released in 1972, he killed the murderer of a nephew of boss Carlo Gambino - an act that earned him four more years in prison but helped him climb in mob ranks.

By the early '80s, Castellano had replaced the deceased Carlo Gambino as family boss. And Gotti began attracting the attention of the FBI, which was making increasing use of the new RICO anti-racketeering statute to fight organized crime.

Married in 1960, John Sr. and his wife, the former Victoria DiGiorgio, had four other children - daughters Victoria, a successful romance author, and Angela; and sons Peter and Frank.

In 1980, at 12, Frank was killed by a neighbor's car while riding his minibike. Though ruled blameless by police, the neighbor was abducted weeks later and never seen again. No charges were ever brought.


06/10/02 15:10 EDT