UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934
Release No. 43445 / October 16, 2000

ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 1334 / October 16, 2000

Administrative Proceeding
File No. 3-10347

I.

The Commission deems it appropriate that public administrative proceedings be, and they hereby are, instituted pursuant to Section 21C of the Securities Exchange Act of 1934 ("Exchange Act") against Victor Douenias ("Douenias" or "Respondent").

II.

In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement ("Offer"), which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceeding brought by or on behalf of the Commission or to which the Commission is a party, Respondent, without admitting or denying the matters set forth herein, except that he admits to the jurisdiction of the Commission over him and the matters set forth herein, consents to the issuance and entry of this Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934 and Findings and Order of the Commission ("Order").

III.

On the basis of this Order and Respondent's Offer, the Commission finds the following:

A. Respondent

Respondent was formerly the shipping manager for The Simone Group, Inc. ("Simone"). He left Simone in 1993.

B. The Issuer

Simone was a Delaware corporation located in Moonachie, New Jersey that was engaged in the shoe and handbag business. Simone's common stock was traded on NASDAQ until July 16, 1990, when its common stock was delisted. Simone was required to file annual and quarterly reports with the Commission pursuant to Section 13(a) of the Exchange Act. On July 21, 1993, Simone filed for Chapter 11 Bankruptcy protection. In January 1995, the Bankruptcy court approved Simone's agreement to sell certain assets. Upon the completion of this transaction, Simone ceased operations.

C. Facts

Respondent, during the fiscal year ended January 31, 1993 created invoices for goods that had not yet been shipped to Simone's customers. Such invoices were compiled on the company's daily sales register, which was submitted to a lender. Respondent maintained these invoices in a file separate from the invoices that were generated upon shipment to Simone's customers.

As a result of the respondent's actions, Simone's general ledger on a daily basis reflected sales which had not been shipped as of that date, and for which revenue should not have been booked. The prematurely booked sales were never included in publicly reported financial results, due to the discovery by Simone's independent auditors of discrepancies in the company's financial records in April 1993.

IV.

OPINION

Section 13(b)(5) of the Exchange Act prohibits the knowing circumvention or failure to implement a system of internal accounting controls. Rule 13b2-1 under the Exchange Act prohibits the direct or indirect falsification of, or causing to be falsified, any book, record or account that issuers are required to maintain pursuant to the Exchange Act. By forwarding premature invoices which were compiled as part of the daily sales register, respondent violated Section 13(b)(5) of the Exchange Act and Rule 13b2-1.

V.

The Commission finds that Respondent violated Section 13(b)(5) of the Exchange Act and Rule 13b2-1 thereunder.

VI.

ORDER

Accordingly, IT IS HEREBY ORDERED, pursuant to Section 21C of the Exchange Act, that Respondent cease and desist from committing or causing any violation of, and committing or causing any future violation of Section 13(b)(5) of the Exchange Act and Rule 13b2-1 thereunder.

Jonathan G. Katz
Secretary

http://www.sec.gov/litigation/admin/34-43445.htm