SECURITIES AND EXCHANGE COMMISSION Washington, D.C. Litigation Release No. 16003 / December 17, 1998 Accounting and Auditing Enforcement Release No. 1089 / December 17, 1998 Securities and Exchange Commission v. John F. "Pete" Oliver, Willard A. "Tony" Meador, Wayne M. Sampson, James R. Gehringer, Julie McNabb-Meador, Patrick M. Jacobi, Michael W. Roberts, and Steven M. Gross, Civil Action No. 98 CV 75 (DJS) (E.D. Mo.) (Dec. 16, 1998). The Securities and Exchange Commission yesterday filed an enforcement action in the Eastern District of Missouri charging eight individuals with perpetrating a financial fraud at Oliver Transportation, Inc. (OTI), a now defunct trucking company formerly headquartered in Mexico, Missouri. The complaint alleges that: From the time OTI went public in 1993 until it ceased operations in August 1995, OTI's senior management and other employees unlawfully inflated OTI's financial results by fabricating phony customer orders, and in turn accounts receivable, for trucking services. As a result of the recording of phony receivables, OTI's financial statements and other disclosures in its June 1993 registration statement and subsequent periodic reports filed with the Commission contained materially false and misleading information. By the time the fraud was uncovered in August 1995, nearly half of OTI's reported receivables were based on phony customer orders. As to the roles played by each of the defendants, the complaint alleges, among other things, that:  John F. "Pete" Oliver (OTI's founder and chairman) devised and initiated the fraud to obtain funds under a bank loan secured by the company's accounts receivable. In addition, Oliver sold 32,000 shares of OTI common stock, receiving proceeds of In total, Oliver sold 32,000 OTI shares for $129,869, and Meador$129,869, when he knew that OTI's financial statements and periodic reports contained materially false and misleading information.  Willard A. "Tony" Meador (OTI's president until October 1994) directed the entry of the phony customer orders into OTI's books and records. While aware that OTI's financial statements and other disclosures were materially false and misleading, Meador also sold 100,500 OTI shares, receiving proceeds of $288,637.  Wayne M. Sampson (the company's initial chief financial officer and later Meador's successor as president), James R. Gehringer (the director of operations), and Julie McNabb-Meador and Patrick M. Jacobi (both billing supervisors), each assisted in the entry and tracking of the phony orders in OTI's books and records.  Steven M. Gross (Sampson's successor as chief financial officer) and Michael W. Roberts (controller), both certified public accountants, knowingly reported the phony accounts receivable in OTI's financial statements included in periodic filings with the Commission. In addition to civil money penalties, the complaint seeks to permanently enjoin the defendants from violating the antifraud, books and records, and internal accounting control provisions of the federal securities laws. The Commission also requested that the court order Oliver and Meador to disgorge their ill-gotten gains from their insider trading and permanently bar each from serving as an officer or director of any public company. Simultaneously with the filing of the complaint, without admitting or denying the complaint's allegations, Oliver, Sampson, Gehringer, Roberts, and Gross each agreed to settle the charges against them by consenting to final judgments. The final judgments against Oliver and Sampson prohibit each from violating Section 17(a) of the Securities Act of 1933, and Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5, 13b2-1, and 13b2-2 thereunder. The judgment against Oliver also bars him from serving as an officer or director of a public company under Section 21(d)(2) of the Exchange Act. The judgment against Gehringer prohibits him from violating 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. Gross and Roberts consented to judgments enjoining them from violating Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1, and 13b2-2 thereunder. As part of their settlements, Gross and Roberts have agreed to the entry of Commission orders barring each from appearing or practicing before the Commission as accountants. The Commission agreed not to seek imposition of civil money penalties against the settling defendants based on their demonstrated inability to pay. For the same reason, the Commission also agreed to waive the payment of disgorgement by Oliver. The charges filed against Meador, McNabb-Meador, and Jacobi are pending before the court.