UNITED STATES OF AMERICA
                                     Before the
                         SECURITIES AND EXCHANGE COMMISSION
          SECURITIES EXCHANGE ACT OF 1934
          Release No.  39843 / April 9, 1998
          ACCOUNTING AND AUDITING ENFORCEMENT
          Release No.   1023 / April 9, 1998
          ADMINISTRATIVE PROCEEDING
          File No. 3-9573
          _________________________
          In the Matter of         :
                                   : ORDER INSTITUTING PROCEEDINGS
          Lee Pharmaceuticals      : PURSUANT TO SECTION 21C OF THE
          Henry L. Lee, Jr.        : SECURITIES EXCHANGE ACT OF 1934
          Ronald G. Lee            : AND RULE 102(e) OF THE Michael L. Agresti, CPA
                                   : COMMISSION'S RULES OF
                                   : PRACTICE, MAKING FINDINGS
                                   : AND IMPOSING SANCTIONS AND Respondents.
                                   : CEASE-AND-DESIST ORDER
          _________________________:
             I.
          The Securities and Exchange Commission (the "Commission") deems
          it appropriate that public administrative proceedings be
          instituted pursuant to Section 21C of the Securities Exchange Act
          of 1934 ("Exchange Act") against Lee Pharmaceuticals ("Lee"),
          Henry L. Lee, Jr. ("Henry Lee"), Ronald G. Lee ("Ron Lee"), and
          Michael L. Agresti ("Agresti") (collectively "Respondents").
          Accordingly, IT IS HEREBY ORDERED that said proceedings be, and
          hereby are, instituted.
          The Commission also deems it appropriate that public
          administrative proceedings be instituted against Agresti pursuant
          to Rule 102(e)(1)(iii) of the Commission's Rules of Practice.[1]/
          Accordingly, IT IS HEREBY ORDERED, that said proceedings be, and
          hereby are, instituted.
                                         II.
          In anticipation of the institution of these administrative
          proceedings, Lee, Henry Lee, Ron Lee, and Agresti have each
          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 in which the Commission is a party, and without
          admitting or denying the findings herein, except that Respondents
          admit the jurisdiction of the Commission over them and over the
          subject matter of these proceedings; and Respondents each consent
          to the entry of this Order Instituting Proceedings Pursuant to
          Section 21C of the Securities Exchange Act of 1934 and Rule
          102(e) of the Commission's Rules of Practice, Making Findings and
          Imposing Sanctions and Cease-And-Desist Order ("Order") and to
          the entry of the findings and imposition of the sanctions as set
          forth below.
                                        III.
          On the basis of this Order and of the Offers of Settlement of
          Lee, Henry Lee, Ron Lee, and Agresti, the Commission makes the
          following findings:
          A.The Respondents
          1.Lee Pharmaceuticals ("Lee") is a California corporation with
          offices in South El Monte, California that manufactures dental
          and cosmetic products.  Its common stock is registered pursuant
          to Section 12(b) of the Exchange Act, and traded on the American
          Stock Exchange from October 1973 until January 1996 when it was
          delisted.  Its common stock now trades in the over-the-counter
          market.
          2.Henry L. Lee, Jr. ("Henry Lee"), age 70, was Lee's Chairman of
          the Board from 1971 through April 1995, is presently a director,
          and provides consulting services.
          3.Ronald G. Lee ("Ron Lee"), age 44, is Henry Lee's son, has
          worked for Lee since 1975, became Lee's President and Chief
          Executive Officer ("CEO") in October 1987 and became Chairman of
          the Board in April 1995.
          4.Michael L. Agresti ("Agresti"), age 55, has worked for Lee
          since 1974, became Vice President of Finance and Chief Financial
          Officer ("CFO") in 1987, and has an inactive California Certified
          Public Accountant ("CPA") license that he may reactivate by
          satisfying continuing professional education requirements.
B.The Facts
          1.Background
          In 1987, Lee first learned of high levels of contamination in its
          soil and groundwater.  The California Regional Water Quality
          Control Board ("Water Board") then ordered Lee, both in 1988 and
          in 1989, to investigate the contamination on its property, but
          Lee replied that Lee did not cause any contamination.[2]/  Lee's
          consultants then performed tests, and confirmed Lee's
          contamination to Henry Lee in a 1989 letter and two 1990 reports.
          But Lee still failed to complete its investigation of its
          contamination and, from 1991 through 1996, utilized its
          Commission filings to mislead investors about the nature and
          extent of Lee's environmental responsibilities and liabilities.
2.Lee's False Statements And Omissions In Its Periodic Reports
          Lee, in periodic reports from fiscal 1991 through fiscal 1996
          (Lee's fiscal year runs from October 1 through September 30),
          made material omissions and misstatements about its
          contamination.  Henry Lee, Ron Lee, and Agresti signed and/or
          reviewed Lee's 1991 and 1992 Forms 10-K, and 1993 through 1996
          Forms 10-KSB.  Henry Lee prepared the environmental disclosures
          in the text and the notes to the financial statements of Lee's
          1991 through 1994 periodic reports.
a.Lee's 1991 Form 10-K
          By the time Lee filed its 1991 Form 10-K, on December 30, 1991,
          in spite of the events occurring from 1987 through 1990 and
          additional information Lee obtained about its environmental
          obligations during 1991, Lee materially understated its
          environmental responsibilities.  For example, upon learning that
          Lee was not investigating its contamination, in March 1991, the
          United States Environmental Protection Agency ("EPA") sent Henry
          Lee a "General Notice" designating Lee as a Potentially
          Responsible Party ("PRP") for San Gabriel Superfund Site
          investigation and cleanup costs.[3]/
          Lee, however, did not disclose in its 1991 Form 10-K that it was
          not performing its investigation, and that it was a PRP.
          Further, when Lee still failed to perform its investigation and
          cleanup, the Water Board issued a "Cleanup Order" in August 1991,
          finding that Lee had delayed its investigation, and again ordered
          Lee to investigate and clean up its contamination.  Lee filed
          monthly reports with the Water Board, and in October 1991, Henry
          Lee received from an environmental consultant a $465,200 estimate
          for Lee's environmental investigation and cleanup costs.
          However, Lee still did not complete its investigation or clean up
          its contamination.  Management believed the $465,200 estimate was
          unreliable.  Nevertheless, Lee was obligated to obtain, disclose,
          and accrue as appropriate a reasonable estimate of Lee's
          environmental liabilities and cleanup costs.  Lee failed to
          disclose the $465,200 estimate, and falsely reported in its 1991
          Form 10-K that it was conducting further tests.  Moreover, by
          September 1991, Henry Lee had received copies of consultants'
          reports that confirmed contamination on Lee's property, and Ron
          Lee and Agresti also understood that Lee's property was
          contaminated.  Lee, nevertheless, falsely reported in its 1991
          Form 10-K that Lee had "some potential contamination," but that
          the environmental tests were "inconclusive."
          b.Lee's 1992 Form 10-K
          In its 1992 Form 10-K, filed on January 13, 1993, Lee continued
          to materially understate the seriousness of its environmental
          obligations.  First, Lee represented that it was not a PRP even
          though Henry Lee, Ron Lee and Agresti knew that the EPA had
          designated Lee as potentially liable for Superfund site
          contamination in March 1991.  Further, without any basis, Lee
          also falsely stated in its 1992 Form 10-K that the EPA had
          announced that contamination was sufficiently low that the EPA
          was not currently requiring a cleanup.  Henry Lee, Ron Lee, and
          Agresti knew, however, that the EPA had not excused Lee's cleanup
          obligations, and that the EPA had announced that it would
          continue to investigate and require cleanups of contaminated
          properties, including Lee's.
          Lee also falsely stated in its 1992 Form 10-K that it had no
          information about the cleanup costs for its property, even though
          in May 1992, Henry Lee, in a letter to Lee's insurance carrier,
          estimated Lee's environmental investigation and cleanup costs at
          $700,000.  Lee also failed to disclose that it was still not
          performing its environmental investigation as required by the
          Water Board, and, instead, stated in its 1992 Form 10-K that
          "testing has not been completed and the extent of any
          contamination has not been determined."  Yet, Henry Lee knew that
          Lee was not completing its environmental investigation, and he
          sent letters to the Water Board throughout 1992, claiming that
          Lee lacked the time or money for added environmental work.  Ron
          Lee knew that although Lee claimed it could not afford
          environmental work, it was able to purchase the assets of another
          company during 1992 for $233,000 cash.
          c.Lee's 1993 Form 10-KSB
          Even though Lee apparently released more chemicals onto its
          property during 1993, Lee continued to make material false
          statements and omissions about its environmental contamination
          and investigation and cleanup obligations.  During 1993, the EPA
          was so concerned about Lee's failure to perform its
          investigation, that it had its own consultant perform the
          investigation.  The EPA's tests established that Lee's
          contamination originated on Lee's property, although the EPA did
          not provide Lee with the test results prior to the time Lee filed
          its 1993 Form 10-KSB on January 21, 1994.  Also, during 1993,
          Henry Lee continued to tell the Water Board that Lee lacked the
          funds to perform any environmental work, even though Lee used
          hundreds of thousands of dollars in cash to reduce debts to Henry
          Lee and Lee family members.  Also during 1993, Lee added to its
          contamination problems and was cited by the County of Los Angeles
          for improperly storing about 100 containers of chemicals and
          hazardous waste, some in corroding or unsealed containers, and
          was cited by the State of California for a chemical discharge
          from Lee's property.  In its 1993 Form 10-KSB Lee falsely:
          claimed that it had complied with governmental provisions
          relative to protection of the environment; did not disclose that
          it was still not complying with the Water Board's Cleanup Order;
          continued to deny that it had any information about its cleanup
          costs; continued to deny that it had been designated a PRP for
          San Gabriel Valley Superfund Site investigation and cleanup
          costs; and stated again, without basis, that the EPA was not
          requiring any cleanup.
          d.Lee's 1994 Form 10-KSB
          By the time Lee filed its 1994 Form 10-KSB, on December 22, 1994,
          Henry Lee had received the EPA's 1993 test results showing that
          Lee's contamination originated on Lee's property.  Lee, however,
          continued to fail to disclose the test results; falsely claimed
          that it did not cause any contamination; and falsely claimed that
          financial hardship was keeping it from completing its
          environmental work.  Despite Lee's continued claims of financial
          hardship, Lee continued making material payments for asset
          acquisitions.  Furthermore, Lee omitted to state in its 1994 Form
          10-KSB that it was not performing the environmental work ordered
          by the Water Board.  Further, Lee falsely reported that Lee was
          in compliance with provisions regarding protection of the
          environment.  In its 1994 Form 10-KSB, Lee also falsely:
          continued to deny that it had any information as to its cleanup
          costs; continued to deny that it had been designated a PRP for
          San Gabriel Valley Superfund Site investigation and cleanup
          costs; and stated again, without basis, that the EPA was not
          requiring any cleanup.
          e.Lee's 1995 and 1996 Forms 10-KSB
          Although Lee gained additional information in 1995 about its
          environmental cleanup costs, Lee continued to falsely state in
          its 1995 Form 10-KSB that its cleanup costs were unknown, and to
          falsely state in its 1996 Form 10-KSB that it lacked reliable
          information about its cleanup costs.  In July 1995, Henry Lee
          learned of the EPA's $30 million estimate for South El Monte's
          portion of the San Gabriel Valley Superfund Site cleanup
          costs.4[/]  Further, during 1995, Ron Lee and Agresti learned of
          the $465,200 estimate that Henry Lee had received in 1991.  But
          Lee did not disclose in its 1995 and 1996 Forms 10-KSB its
          estimated costs for cleaning up its own property, or the $30
          million estimate of the South El Monte Superfund site cleanup
          costs of which Lee could incur a share.  Instead, in its 1995
          Form 10-KSB, filed on January 12, 1996, Lee stated that its
          cleanup costs were "not known at this time," and in its 1996 Form
          10-KSB, filed on December 27, 1996, Lee stated that it had no
          reliable information about its cleanup costs.
3.Lee Failed To Obtain, Accrue, And Disclose In Its Financial Statements
Estimates Of Its Environmental Costs
          In addition to its series of textual material omissions and
          misstatements, Lee's financial statements, included in its
          periodic reports, did not comply with Generally Accepted
          Accounting Principles ("GAAP").  Although required in its 1991
          financial statements, Lee failed to accrue as a loss an estimate
          of its environmental investigation and cleanup costs.  Lee
          further failed to disclose a range of estimated environmental
          costs in the notes to its 1991 through 1996 financial statements.
          Had Lee properly accrued the $465,200 estimate, Lee's $3.9
          million net loss for 1991 would have increased by 12% to $4.4
          million, and Lee's reported accumulated deficit for 1991 of $2.3
          million would have increased by 20% to $2.8 million.5[/]
a.GAAP Requirements
          GAAP requires accrual of an estimated loss if, prior to issuing
          the financial statements, information indicates that it is
          "probable" that a liability has been incurred at the date of the
          financial statements, and the loss can be reasonably estimated.
          See Financial Accounting Standard ("FAS") No. 5 entitled
          "Accounting for Contingencies,"  8.  GAAP does not permit
          delaying recognizing contingent liabilities until only a single
          amount can be reasonably estimated.  Instead, management must
          disclose a range of estimated losses and accrue as a loss in the
          financial statements the minimum of the range.  See Financial
          Accounting Standards Board Interpretation No. 14, entitled,
          "Reasonable Estimation of the Amount of a Loss."  GAAP also
          provides that as more information becomes available, management
          should revise its reported estimates of the liability.  See
          Accounting Principles Board Opinion No. 20 entitled, "Accounting
          Changes."  Commission Staff Accounting Bulletin ("SAB") No. 92
          entitled "Accounting and Disclosures Relating to Loss
          Contingencies":  (a) requires recognition of a loss equal to the
          minimum of the range even if the upper limit of the range is
          uncertain; (b) advises that information necessary to support a
          reasonable estimate or range of loss may be available before
          performing a detailed investigation; and (c) admonishes that even
          **FOOTNOTES**
[1]:/Rule 102(e) of the Commission's Rules of Practice provides in
pertinent part that:  "the Commission may deny, temporarily or permanently,
the privilege of appearing before it in any way to any person who is found
by the Commission after notice and opportunity for hearing in the
matter...(iii) to have willfully violated, or willfully aided and abetted
the violation of any provision of the federal securities laws."
[2]:/As early as 1984, Lee was cited for storing improperly 80 drums of
chemicals which should have been shipped offsite in a timely manner.
During 1989 or 1990, Lee's second environmental consultant observed a Lee
employee spilling chemicals near where high levels of contamination had
previously been detected and, in 1990, a Water Board staff member reported
Lee's faulty industrial waste equipment that apparently leaked hazardous
chemicals into the soil.
[3]:/The EPA previously placed the San Gabriel Valley on the Superfund
National Priorities List of hazardous waste sites authorized by the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C.  9600 (1980), also known as "Superfund."
[/]:/Lee's potential share of the $30 million has not been determined.
Superfund PRPs are jointly and severally liable for Superfund site costs,
and are responsible for negotiating among themselves the allocation of the
costs based on, among other things, the outcome of the environmental
investigation.
[/]:/Unlike the $465,200 estimate of Lee's environmental costs that a
consultant provided to Henry Lee in 1991 that was based on a detailed
analysis of investigation and cleanup costs, Henry Lee's 1992 estimate of
$700,000 represented the amount of environmental costs and other associated
expenses Henry Lee was asserting in an insurance claim, and was unsupported
by any detailed calculations.
          when the registrant has not determined the specific strategy for
          cleanup, estimates of costs of various alternative cleanup
          strategies for a site may be available or reasonably estimable.
          See SAB Topic 5Y,  11 and 12.
b.Lee Failed To Comply With GAAP
          When Lee filed its 1991 Form 10-K including its 1991 financial
          statements, it had not met the GAAP criteria that obligated Lee
          to estimate, disclose, and accrue environmental losses.  First,
          the August 1991 Cleanup Order showed that at the date of Lee's
          1991 financial statements (September 30, 1991), it was probable
          that Lee had incurred an environmental liability.  Second, Lee
          could have reasonably estimated a range of loss.  Lee's own
          environmental consultant believed that, with the environmental
          test results Lee had by November 1990, Lee could have estimated a
          range of investigation and cleanup costs.  Further, as early as
          1991 and 1992, Henry Lee had estimates of Lee's environmental
          liabilities from $465,200 to $700,000.  Accordingly, GAAP
          required Lee to accrue an estimate of its environmental
          liabilities in its 1991 financial statements, and from 1991
          forward, to disclose a range of estimated environmental
          investigation and cleanup costs.
c.Henry Lee And Agresti Knew Of Environmental Disclosure Obligations
          Henry Lee and Agresti knew that Lee was obligated to estimate,
          disclose, and accrue its environmental costs.  Agresti was
          familiar with the contingent liability disclosure requirements
          under GAAP described in FAS No. 5, and by 1991 knew of Lee's
          contamination, and that Lee was obligated to obtain, disclose,
          and accrue related estimates.  By 1991, Henry Lee had the
          $465,200 estimate, and should have had Lee accrue the estimate in
          its 1991 financial statements.  By 1992, Henry Lee had estimated
          Lee's environmental costs at $700,000, and Lee's 1992 and 1993
          periodic reports should have disclosed this estimate.  By the
          time Lee filed its 1994 Form 10-KSB, without disclosing or
          accruing Lee's estimated environmental liabilities, and by the
          time Lee filed its 1995 and 1996 Forms 10-KSB without disclosing
          that Lee could incur at least a share of the $30 million estimate
          of the Superfund sitecleanup costs, or the estimated cleanup
          costs for its property, Henry Lee and Agresti knew, or were
          reckless in not knowing, that such estimates must be
          reported.6[/]
          **FOOTNOTES**
[/]:/At November 1994, each had a GAAP update that described, among other
things, requirements of FAS No. 5 and SAB No. 92 that required reporting
such estimates.  But, Agresti relied on Henry Lee to bring environmental
liabilities to his attention, and he did not establish any internal
accounting controls over environmental matters.
          4.Henry Lee Withheld Information From Lee's Auditors
          Henry Lee withheld the estimates of Lee's environmental
          investigation and cleanup costs from Lee's auditors from 1991
          through 1994.  Henry Lee falsely told Lee's auditors that Lee
          could not estimate its environmental costs, and failed to inform
          any of the auditors about the $700,000 estimate.  Further, Lee's
          auditors for years 1991 through 1994 claimed that they were
          unaware of Lee's $465,200 estimate.
          C.Applicable Law
1.Antifraud:  Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder
          Lee, Henry Lee, and Ron Lee violated, and Agresti willfully
          violated, Section 10(b) of the Exchange Act and Rule 10b-5
          thereunder by filing with the Commission periodic reports that
          misrepresented and/or omitted to disclose material information
          about Lee's environmental contamination, investigation and
          cleanup responsibilities, and liabilities.  Section 10(b) of the
          Exchange Act and Rule 10b-5 thereunder make it unlawful for any
          person, directly or indirectly, in connection with the purchase
          or sale of a security, to make an untrue statement of material
          fact, omit to state a material fact, use any device, scheme or
          artifice to defraud, or engage in any act, practice or course of
          business which operates or would operate as a fraud or deceit
          upon any person.  Generally, information is material if there is
          a substantial likelihood that a reasonable investor would
          consider it important to an investment decision.  See Basic Inc.
          v. Levinson, 485 U.S. 224, 231-32 (1988); TSC Indus., Inc. v.
          Northway, Inc., 426 U.S. 438, 449 (1976).  Scienter is required
          to establish a violation of Section 10(b) of the Exchange Act and
          Rule 10b-5 thereunder.  See Aaron v. SEC, 446 U.S. 680, 701-02
          (1980).  The Supreme Court has defined scienter as "a mental
          state embracing intent to deceive, manipulate or defraud."  Ernst
          & Ernst v. Hochfelder, 425 U.S. 185, 194 n.12 (1976).  The Ninth
          Circuit has expressly held that recklessness satisfies the
          scienter requirement.  Hollinger v. Titan Capital Corp., 914 F.2d
          1564, 1569 (9th Cir. 1990) (en banc), cert. denied, 499 U.S. 976
          (1991).
          Henry Lee drafted, and Ron Lee and Agresti reviewed,
          environmental disclosures for Lee's 1991 through 1994 periodic
          reports, and Henry Lee, Ron Lee, and Agresti signed and/or
          reviewed, and caused Lee to file, Lee's 1995 and 1996 Forms 10-
          KSB.  Each of these reports omitted material facts and made
          materially false statements about Lee's environmental
          contamination and related obligations, and failed to accrue and
          disclose any estimated environmental liabilities as required by
          GAAP.  The misrepresentations were material.  Reasonable
          investors would consider it important that Lee had:  (1) high
          levels of confirmed contamination originating on its property;
          (2) continually failed to comply with governmental provisions
          regarding protection of the environment, such as performing its
          investigation and cleanup; (3) been designated a PRP and had not
          been excused by the EPA from cleanup obligations; and (4)
          estimates ranging from $465,200 to $700,000 for Lee's
          environmental investigation and cleanup costs, and of $30 million
          for the South El Monte portion of the San Gabriel Valley
          Superfund Site where Lee's facilities were located.  These facts
          would be important to investors because of the likelihood, under
          the circumstances, that Lee would be required to make material
          unrecoverable payments for both the Superfund site and its own
          property's investigation and cleanup costs.
          Further, Lee's financial statements included in its periodic
          reports were materially misleading.  Lee did not prepare its
          financial statements in accordance with GAAP when it failed to:
          (1) accrue its estimated investigation and cleanup costs in its
          1991 financial statements, and make adequate accruals thereafter;
          and (2) disclose its range of estimated investigation and cleanup
          costs in its 1991 through 1996 periodic reports, such as the
          $465,200 to $700,000 estimates of its environmental investigation
          and cleanup obligations.  Section 4-01(a) of Regulation S-X
          requires that financial statements filed with the Commission
          comply with GAAP.  Financial statements that fail to make
          disclosures required by Regulation S-X and GAAP are considered
          misleading.[4]/  Lee's financial statements were materially
          misleading.  For example, had Lee properly accrued in its 1991
          financial statements its $465,200 estimate of estimated
          environmental costs, Lee's $3.9 million net loss for 1991 would
          have increased by 12% to $4.4 million, and Lee's reported
          accumulated deficit for 1991 of $2.3 million would have increased
          by 20% to $2.8 million.
          Lee, Henry Lee, Ron Lee, and Agresti acted with scienter by
          repeatedly failing to assure that Lee disclosed truthfully
          material facts that each knew about Lee's environmental
          contamination and liabilities.[5]/
          Henry Lee acted with the highest degree of scienter.  He was
          involved in the day-to-day management of Lee's environmental
          responsibilities and knew best of all of Lee's serious
          environmental contamination, and its responsibilities to
          investigate and clean up the contamination and disclose in its
          filings with the Commission these responsibilities and related
          liabilities.  He directed Lee's environmental investigation,
          received copies of environmental investigation reports and
          environmental literature regarding financial accrual and
          disclosure obligations, received reports, notices and
          correspondence from the federal and state environmental agencies,
          obtained and made estimates of Lee's environmental liabilities,
          and received a memorandum describing the estimated $30 million of
          Superfund site cleanup costs to which Lee could be required to
          contribute.  In spite of Henry Lee's knowledge of Lee's
          environmental contamination, investigation and cleanup
          responsibilities, and reporting obligations, Henry Lee prepared
          materially misleading environmental disclosures included in Lee's
          1991 through 1994 periodic reports that materially misstated the
          seriousness of Lee's environmental obligations, and made
          materially false statements about Lee's PRP status and Superfund
          site cleanup obligations.  Further, in the 1995 and 1996
          environmental disclosures in reports that Henry Lee signed and/or
          reviewed, Lee still failed to disclose its known environmental
          cleanup estimates.  Finally, none of the financial statements, in
          the 1991 through 1996 periodic reports signed and/or reviewed by
          Henry Lee, appropriately disclosed or accrued Lee's estimated
          environmental liabilities.  Given Henry Lee's in-depth knowledge
          of Lee's environmental contamination and obligations, the danger
          that Lee's omissions and misrepresentations about its
          environmental liabilities and responsibilities would mislead
          investors was so obvious that Henry Lee must have been aware of
          it.
          Ron Lee also acted with scienter.  Ron Lee knew of, but
          repeatedly failed to require Lee to disclose, Lee's severe
          contamination, and its corresponding environmental
          responsibilities.  Ron Lee knew that:  Lee's property was
          contaminated; Lee did not perform its environmental
          investigation; Lee had received its General Notice from the EPA
          notifying it of its Superfund liability; and Lee had not been
          excused from performing its cleanup.  Ron Lee, however, reviewed
          the environmental disclosure in Lee's 1991 through 1996 periodic
          reports that falsely stated some or all of the following:  that
          Lee's property had only potential contamination; that Lee had
          complied with all governmental provisions relating to protection
          of the environment; that Lee was not a PRP; and that the EPA was
          not requiring a cleanup.  Moreover, by the time Lee filed its
          1995 and 1996 Forms 10-KSB, Ron Lee knew of the $465,200 estimate
          of Lee's investigation and cleanup costs, but reviewed and/or
          signed Lee's 1995 and 1996 Forms 10-KSB that stated that Lee had
          no information about its cleanup costs.
          Agresti acted with scienter by repeatedly failing to have Lee
          disclose truthfully facts he knew about its environmental
          contamination and liabilities.  Agresti knew that Lee's property
          was contaminated, Lee was a PRP, and the EPA had not excused Lee
          from its cleanup obligations.  Agresti, however, signed and/or
          reviewed Lee's environmental disclosures in some or all of its
          1991 through 1996 periodic reports that falsely stated that Lee
          had only potential contamination, was not a PRP, and the EPA was
          not requiring a cleanup.  Moreover, Agresti failed to
          appropriately accrue or disclose any estimates of Lee's
          environmental liabilities.  Agresti had been an active CPA and
          was familiar with contingent liability reporting requirements
          under GAAP described in FAS 5.  Further, Agresti knew, or was
          reckless in not knowing, of the environmental liability
          disclosure requirements described in SAB 92 from the GAAP update
          that he had in November 1994.  Agresti, however, failed to
          obtain, disclose and accrue estimates of Lee's environmental
          liabilities in Lee's financial statements included in its 1991
          through 1996 periodic reports.  By January 12, 1996, when Lee
          filed its 1995 Form 10-KSB, Agresti knew of Lee's $465,200
          estimate of its environmental costs, yet signed Lee's 1995 and
          1996 Forms 10-KSB that falsely stated that Lee's cleanup costs
          "were not known at this time," or that Lee lacked reliable
          information about its cleanup costs, and that failed to accrue in
          Lee's financial statements an estimate of its environmental
          liabilities and cleanup costs.
          **FOOTNOTES**
[4]:/SEC Regulation  210.4-01(a) provides in pertinent part that:  "(a)(1)
Financial statements filed with the Commission which are not prepared in
accordance with generally accepted accounting principles will be presumed
to be misleading or inaccurate. . ."
[5]:/For purposes of establishing scienter, Henry Lee's, Ron Lee's, and
Agresti's mental states are imputed to Lee.  See SEC v. Manor Nursing
Centers, Inc., 458 F.2d 1082, 1096 n. 16 (2d Cir. 1972).
2.Reporting:  Section 13(a) of the Exchange Act and Rules 12b-20 and 13a-1
Thereunder
          Section 13(a) of the Exchange Act and Rule 13a-1 thereunder
          require issuers with securities registered pursuant to Section 12
          of the Exchange Act, such as Lee, to file with the Commission
          annual reports on either Form 10-K or Form 10-KSB.  The filings
          must be accurate.  SEC v. Falstaff Brewing Corp., 629 F.2d 62, 72
          (D.C. Cir. 1980); SEC v. Savoy Industries, Inc., 587 F.2d at
          1165.  Rule 12b-20 under the Exchange Act similarly requires that
          these reports contain any material information necessary to make
          the required statements made in the reports not misleading.  No
          showing of scienter is required to establish a violation of
          Section 13(a) of the Exchange Act.  See Savoy Indus., Inc., 587
          F.2d at 1167.
          Lee violated Section 13(a) of the Exchange Act and Rules 12b-20
          and 13a-1 thereunder by filing its materially false and
          misleading 1991 and 1992 Forms 10-K, and 1993 through 1996 Forms
          10-KSB.  Lee, in some or all of its 1991 through 1996 periodic
          reports, made misrepresentations and omissions regarding its
          environmental investigation and cleanup responsibilities as
          discussed above.[6]/
          Henry Lee and Ron Lee were a cause of, and Agresti willfully
          aided and abetted and caused, Lee's violations of Section 13(a)
          of the Exchange Act and Rules 12b-20 and 13a-1 thereunder.  Henry
          Lee, as Lee's Chairman of the Board, was ultimately responsible
          for assuring that Lee properly disclosed its environmental
          contamination, investigation and cleanup obligations, and related
          liabilities.  Thus, Henry Lee was a cause of Lee's reporting
          violations by drafting disclosures for, or reviewing and/or
          signing, Lee's 1991 through 1996 materially false and misleading
          periodic reports.  As Lee's CEO, Ron Lee was also responsible for
          assuring that Lee properly disclosed its environmental
          contamination, investigation and cleanup obligations, and related
          actual and contingent liabilities.  Accordingly, Ron Lee was a
          cause of Lee's reporting violations by reviewing and/or signing
          Lee's 1991 through 1996 periodic reports that contained
          materially misleading information and omitted material
          disclosures.  Moreover, as Lee's CFO, Agresti was responsible for
          assuring that Lee properly disclosed its environmental
          contamination, investigation and cleanup obligations, and
          reported its related actual and contingent liabilities in
          conformity with GAAP.  In this regard, Agresti caused Lee's
          violations by reviewing and/or signing Lee's 1991 through 1996
          periodic reports that contained materially misleading information
          and false financial statements, and that omitted material
          environmental disclosures.  Agresti also willfully aided and
          abetted Lee's violations.
          An individual is liable for aiding and abetting a securities law
          violation where:  (1) a primary violation occurred; (2) the
          alleged aider and abettor had knowledge of the improper activity
          and his role in it; and (3) the alleged aider and abettor
          knowingly rendered substantial assistance in the violation.  See
          Hauser v. Farrell, 14 F.3d 1338, 1343 (9th Cir. 1994); Armstrong
          V. McAlpin, 699 F.2d (2nd Cir. 1983).
          Agresti is liable for willfully aiding and abetting Lee's
          violations.  As discussed above, Lee violated Section 13(a) of
          the Exchange Act and Rule 13a-1 thereunder.  Agresti, as the CFO,
          was responsible for reviewing Lee's disclosures and signed the
          periodic reports.  He was familiar with contingent liability
          reporting requirements under GAAP, and was a CPA.  Agresti also
          provided Lee with substantial assistance in Lee's violations of
          the reporting provisions by signing periodic reports on behalf of
          the company.
3.Record-Keeping:  Section 13(b)(2)(A) Of The Exchange Act And Rule 13b2-1
Thereunder
          Section 13(b)(2)(A) of the Exchange Act requires every issuer
          that has securities registered pursuant to Section 12 of the
          Exchange Act, such as Lee, to "make and keep books, records, and
          accounts, which, in reasonable detail, accurately and fairly
          reflect the transactions . . . of the issuer."  No showing of
          scienter is required to establish a primary violation of this
          section.  See SEC v. World-Wide Coin Inves., Ltd., 567 F. Supp.
          724, 749, 751 (N.D. Ga. 1983).  Lee violated Section 13(b)(2)(A)
          of the Exchange Act in that its books, records and accounts
          inaccurately reflected Lee's transactions.  Lee's 1991 through
          1996 books and records failed to reflect as a loss the minimum of
          Lee's range of estimated environmental liabilities.
          Henry Lee was a cause of, and Agresti willfully aided and abetted
          and caused, Lee's violations of the record-keeping provisions of
          Section 13(b)(2)(A) of the Exchange Act.  Henry Lee and Agresti
          failed to keep accurate books and records.  Consequently, Henry
          Lee was a cause of, and Agresti willfully aided and abetted and
          caused, Lee's failure to make and keep books, records, and
          accounts, which, in reasonable detail, accurately and fairly
          reflected Lee's environmental liabilities.  Further, Henry Lee
          violated and Agresti willfully violated the record-keeping
          provisions of Rule 13b2-1 under the Exchange Act, which 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)(A)."  Henry Lee, as Lee's Chairman of the Board, and
          Agresti, as Lee's CFO, were responsible for assuring that Lee
          maintained accurate records and made financial reports that
          fairly presented Lee's transactions.  As described above, Henry
          Lee and Agresti, however, falsified Lee's records by improperly
          failing in 1991 to obtain, and have Lee accrue and disclose,
          estimates of its environmental liabilities.  As also described
          above, Henry Lee failed, from 1992 through 1996, to have Lee
          accrue the $465,200 estimate of Lee's environmental investigation
          and cleanup costs he received in October 1991, and to have Lee
          disclose the $700,000 estimate of Lee's environmental and cleanup
          costs he had in May 1992.
          4.Internal Controls:  Section 13(b)(2)(B) Of The Exchange Act
          The internal control provisions of Section 13(b)(2)(B) of the
          Exchange Act require issuers with securities registered under
          Section 12 of the Exchange Act, such as Lee, to devise and
          maintain a system of internal accounting controls sufficient to
          reasonably assure, among other things, that transactions are
          recorded as necessary to permit preparation of financial
          statements in conformity with GAAP.  Again, scienter is not
          required to prove a primary violation of this section.  See
          World-Wide Coin Inves., Ltd., 567 F. Supp. at 749, 751.  Lee
          lacked the required internal accounting controls necessary to
          properly report its environmental liabilities.  Agresti, as Lee's
          CFO, was primarily responsible for devising and implementing
          Lee's system of internal accounting controls.  Agresti, however,
          did not develop internal controls for Lee's environmental
          liabilities that would assure that Lee would obtain estimates of
          its range of environmental costs, and accrue the minimum of the
          range as a loss in Lee's financial statements as required by
          GAAP.  Agresti, therefore, willfully aided and abetted and caused
          Lee's violations of the internal control provisions of Section
          13(b)(2)(B) of the Exchange Act.
5.Lying To An Accountant:  Rule 13b2-2 Under The Exchange Act
          Rule 13b2-2 under the Exchange Act prohibits any officer or
          director of an issuer from omitting to state any material fact to
          an accountant in connection with any required audit of the
          issuer's financial statements or the preparation of a report
          required to be filed with the Commission.  Henry Lee violated
          this rule by omitting to state to Lee's auditors material
          information about the $465,200 estimate of Lee's environmental
          investigation and cleanup costs that he received in 1991, and the
          $700,000 estimate he made in 1992,  affecting Lee's financial
          statements.
          **FOOTNOTES**
[6]:/In addition, Lee was required to, but failed to, disclose its failure
to complete its investigation and cleanup as required by the Water Board
Cleanup Order.  SEC regulations require that management disclose the
material effects that compliance with federal, state and local
environmental law provisions may have upon the capital expenditures,
earnings and competitive position of a company.  See Item 101(b)(1)(xii) of
Regulation S-K, and Item 101(b)(9) of Regulation S-B.  To the extent that
Lee's claim of financial hardship was just a negotiating ploy, and
therefore false, Lee was facing enforcement actions compelling it to
complete its investigation and cleanup.  Because such actions may have had
a material impact on Lee's capital expenditures and net earnings, Lee
should have disclosed in its 1992 Form 10-K and 1993 and 1994 Forms 10-KSB
that it was in violation of the Water Board Cleanup Order, and was risking
enforcement action.  Alternatively, if Lee truly lacked the funds to comply
with the Cleanup Order, Lee was required to disclose, in its Management's
Discussion and Analysis Sections ("MD&A") that it was unable to generate
adequate amounts of cash to meet its needs, and the steps that it had taken
or proposed to take to remedy the deficiency.  See Form 10-K, Item 7;
Regulation S-K, Item 303(a)(2) and Instruction 5 to Paragraph 303(a)11; 17
CFR  229.303.  See also Form 10-KSB, Item 6; Regulation S-B, Item 303(b);
17 CFR  228.303.
6.Willful Violations and Willful Aiding and Abetting Violations Of The
Federal Securities Laws Or The Rules And Regulations Thereunder:  Rule
102(e)(1)(iii) of the Commission's Rules of Practice
          Rule 102(e)(1)(iii) of the Commission's Rules of Practice
          provides, among other things, that the Commission may deny, for a
          period of time or permanently, the privilege of appearing or
          practicing before the Commission to any person who is found by
          the Commission to have willfully violated, or willfully aided and
          abetted the violation of any provision of the federal securities
          laws.  As discussed above, among other violations, Agresti, a
          CPA, willfully violated the antifraud provisions when he
          recklessly misrepresented and omitted to state material facts
          about contamination detected on Lee's property and related
          liabilities in the company's periodic reports.  Agresti also
          willfully violated the record-keeping provisions, and willfully
          aided and abetted Lee's violations of the reporting,
          record-keeping and internal control provisions.
          D.Conclusion
          Based on the foregoing, the Commission finds that:  (1) Lee
          violated Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of
          the Exchange Act and Rules 10b-5, 12b-20 and 13a-1  thereunder;
          (2) Henry Lee violated Section 10(b) of the Exchange Act and
          Rules 10b-5, 13b2-1 and 13b2-2 thereunder, and caused violations
          of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules
          12b-20 and 13a-1 thereunder; (3) Ron Lee violated Section 10(b)
          of the Exchange Act and Rule 10b-5 thereunder, and caused
          violations of Section 13(a) of the Exchange Act and Rules 12b-20
          and 13a-1 thereunder; and (4) Agresti willfully violated Section
          10(b) of the Exchange Act and Rules 10b-5 and 13b2-1 thereunder,
          and willfully aided and abetted and caused violations of Sections
          13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules
          12b-20 and 13a-1 thereunder.
                                         IV.
          Based on the foregoing, the Commission deems it appropriate to
          accept the Offers of Settlement of Lee, Henry Lee, Ron Lee, and
          Agresti and accordingly,
          IT IS HEREBY ORDERED, pursuant to Section 21C of the Exchange
          Act, that Lee cease and desist from committing or causing any
          violation and any future violation of Sections 10(b), 13(a),
          13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 10b-5,
          12b-20 and 13a-1 thereunder.
          IT IS HEREBY FURTHER ORDERED, pursuant to Section 21C of the
          Exchange Act, that Henry Lee cease and desist from committing or
          causing any violation and any future violation of Section 10(b)
          of the Exchange Act and Rules 10b-5, 13b2-1 and 13b2-2
          thereunder, and from causing any violation and any future
          violation of Sections 13(a) and 13(b)(2)(A) of the Exchange Act
          and Rules 12b-20 and 13a-1 thereunder.
          IT IS HEREBY FURTHER ORDERED, pursuant to Section 21C of the
          Exchange Act, that Ron Lee cease and desist from committing or
          causing any violation and any future violation of Section 10(b)
          of the Exchange Act and Rule 10b-5 thereunder, and from causing
          any violation and any future violation of Section 13(a) of the
          Exchange Act and Rules 12b-20 and 13a-1 thereunder.
          IT IS HEREBY FURTHER ORDERED, pursuant to Section 21C of the
          Exchange Act, that Agresti cease and desist from committing or
          causing any violation and any future violation of Section 10(b)
          of the Exchange Act and Rules 10b-5 and 13b2-1 thereunder, and
          from causing any violation and any future violation of Sections
          13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules
          12b-20 and 13a-1 thereunder.
          IT IS HEREBY FURTHER ORDERED effective immediately, that:
          A.Agresti is denied the privilege of appearing or practicing
          before the Commission as an accountant.
          B.After three years from the date of this Order, Agresti may
          apply to the Commission by submitting an application to the
          Office of the Chief Accountant which requests that he be
          permitted to resume appearing or practicing before the Commission
          as:
1.a preparer or reviewer, or a person responsible for the preparation or
review, of financial statements of a public company to be filed with the
Commission upon submission of an application satisfactory to the Commission
in which Agresti undertakes that, in his practice before the Commission,
his work will be reviewed by the independent audit committee of the company
for which he works or in some other manner acceptable to the Commission;
2.an independent accountant upon submission of an application containing a
showing satisfactory to the Commission that:
a.Agresti, or any firm with which he is or becomes associated in any
capacity, is and will remain a member of the SEC Practice Section of the
American Institute of Certified Public Accountants Division for CPA Firms
("SEC Practice Section") as long as he appears or practices before the
Commission as an independent accountant;
b.Agresti or the firm has received an unqualified report relating to his or
the firm's most recent peer review conducted in accordance with the
guidelines adopted by the SEC Practice Section; and
c.Agresti will comply with all applicable SEC Practice Section
requirements, including all requirements for periodic peer
reviews, concurring partner reviews, and continuing professional
education, as long as he appears or practices before the
Commission as an independent accountant.
3.The Commission's review of any request or application by Agresti to
resume appearing or practicing before the Commission may include
consideration of, in addition to the matters referenced above, any other
matters relating to Agresti's character, integrity, professional conduct,
or qualifications to appear or practice before the Commission.
          By the Commission.
          Jonathan G. Katz
          Secretary