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         UNITED STATES SECURITIES AND EXCHANGE COMMISSION


LITIGATION RELEASE NO. 14961 / June 25, 1996

UNITED STATES OF AMERICA v. JEFFERY H. REYNOLDS, III
3:96-CR-0003, USDC, ND/TX [Dallas]

     The Securities and Exchange Commission and the United States
Attorney for the Northern District of Texas announced that on
June 20, 1996, Jeffery H. Reynolds, III was sentenced to 54
months in prison with three years supervised release and ordered
to pay $475,802 restitution. Reynolds had pled guilty to two
counts of fraud in the sale of worthless casualty, liability,
marine and special-risk insurance policies, and surety bonds
which produced more than $500,000 from policyholder payments. In
the sale of the policies and surety bonds, Reynolds falsely
represented to customers that his two insurance companies
possessed more than $450 million in assets, including a portfolio
of fraudulently valued securities. 

     On August 4, 1993, in an action brought by the Commission's
Fort Worth office, Reynolds was permanently enjoined from
violating the antifraud provisions of the federal securities
laws. At the conclusion of its case, the Commission's
investigative files in this matter were turned over to the U. S.
Attorney's office which resulted in a subsequent investigation of
Reynolds' other fraudulent activities. 
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JEFFERY REYNOLDS SENTENCED AND ORDERED TO PAY RESTITUTION

     The Commission and the United States Attorney for the
     Northern District of Texas announced that on June 20, 1996,
     Jeffery H. Reynolds, III was sentenced to 54 months in
     prison with three years supervised release and ordered to
     pay $475,802 restitution. Reynolds had pled guilty to two
     counts of fraud in the sale of worthless casualty,
     liability, marine and special-risk insurance policies, and
     surety bonds which produced more than $500,000 from
     policyholder payments. In the sale of the policies and
     surety bonds, Reynolds falsely represented to customers that
     his two insurance companies possessed more than $450 million
     in assets, including a portfolio of fraudulently valued
     securities. 

     On August 4, 1993, in an action brought by the Commission's
     Fort Worth office, Reynolds was permanently enjoined from
     violating the antifraud provisions of the federal securities
     laws. At the conclusion of its case, the Commission's
     investigative files in this matter were turned over to the
     U. S. Attorney's office which resulted in a subsequent
     investigation of Reynolds' other fraudulent
     activities.(United States of America v. Jeffery H. Reynolds,
     III, 3:96-CR-0003, USDC, ND/TX [Dallas]) (LR-     )


PHILLIP W. OFFILL, Trial Counsel
Fort Worth Regional Office
817/885-6450
investigation of Reynolds' other fraudulent activities.