UNITED STATES SECURITIES AND EXCHANGE COMMISSION LITIGATION RELEASE NO. 15868 / September 2, 1998 Securities and Exchange Commission v. Capital Acquisitions, Inc, Clealon B. Mann, Wayne C. Notwell, The Somerset Group, Inc., Laser Leasing, Inc., and Pete J. Buffo, Defendants; Surety Underwriters and Control Corp., Capitol Investment Partners, Inc., Spectrim International, Inc., Ute Cal Auto Sales, Inc., Best Rate Rent-A-Car, Inc., High-Line Medical Instruments, Inc., Genie Total Products, Inc., and Fund Line International, Inc., Relief Defendants, Civil Action No. 2:97-0977S (D. Utah) On September 2, 1998, the Securities and Exchange Commission filed an amended complaint in this pending civil action alleging that the defendants perpetrated a second Ponzi scheme, through a company called Laser Leasing, Inc. ("Laser Leasing"), in addition to the Ponzi scheme alleged in the initial complaint. The amended complaint also added Pete J. Buffo ("Buffo"), a convicted felon, as a defendant and charged him with controlling both schemes. The defendants allegedly raised $9 million in the Laser Leasing scheme in addition to the $24 million raised in the other scheme under the name Capital Acquisitions, Inc. ("Capital Acquisitions"). At the same time, Judge David Sam, Chief United States Judge for the District of Utah, granted the Commission's application for a receiver for Capital Acquisitions, and expanded the receivership to include Laser Leasing and other entities which are affiliated with the defendants. The original complaint, filed in December 1997, charged that Capital Acquisitions, Clealon B. Mann, Wayne C. Notwell, and The Somerset Group, Inc. defrauded investors by operating a Ponzi scheme, whereby funds raised from investors were used make interest payments to earlier investors, and by failing to disclose, among other things, excessive commissions. The amended complaint makes similar charges against Laser Leasing, and names as relief defendants the following entities which allegedly received funds from investors in both alleged schemes: Surety Underwriters and Control Corp., Capitol Investment Partners, Inc., Spectrim International, Inc., Ute Cal Auto Sales, Inc., Best Rate Rent-A-Car, Inc., High-Line Medical Instruments, Inc., Genie Total Products, Inc., and Fund Line International, Inc. The relief defendants are all alleged to be affiliated with one or more of the individual defendants. Judge Sam appointed Robert G. Wing, a Salt Lake City attorney, as the receiver for Capital Acquisitions, Laser Leasing, and their affiliated entities, which include all Laser Leasing Limited Liability Companies, Laser Equipment, Inc., Fund Line International, Inc., Capitol Investment Partners, Inc., Chaparral Petroleum, Inc., K&B Gas Company, Inc., Donna Lee Petroleum, Inc., and Capital Kansas, Inc. Mr. Wing previously had acted as a Court-appointed Special Agent in this matter, with powers to perform an accounting, among other things, for Capital Acquisitions. For further information on this case, please see Litigation releases 15670 (March 13, 1998) and 15601 (December 23, 1997).