U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 15060 / Setpember 20, 1996

Securities and Exchange Commission v. Direct Participation
Services, Inc. d/b/a Government Financial, Jeffrey A. Lobel,
William Rossi, United Avalon Group, LTD., and Frank M. Naft,
Civil Action No. 96-6594 LGB (MCx) (C.D. Cal.)

     The Securities and Exchange Commission filed a Complaint on
September 19, 1996, in federal court in Los Angeles, California
against Direct Participation Services, Inc. d/b/a Government
Financial ("GF"), of Woodland Hills, California, Jeffrey A. Lobel
("Lobel"), of West Lake Village, California, William Rossi
("Rossi"), of Acton, California, United Avalon Group, LTD.
("UAG"), of Los Angeles, California and Frank M. Naft ("Naft"),
also of Los Angeles, California.  The Commission's Complaint
alleges that the defendants fraudulently sold $26 million of
unregistered nine-month promissory notes ("Notes") from July 1993
to May 1995.  The Commission's Complaint further alleges that GF,
Lobel and Rossi each violated the registration provisions of the
federal securities laws.  

     According to the Commission's Complaint, GF's various
prospectuses and offering materials misrepresented and/or failed
to disclose material facts concerning: (a) the duties performed
by UAG, GF's purportedly independent trustee; (b) the percentage
of GF's accounts receivable payable by governmental entities; (c)
the Noteholder's security interest in assets acquired by GF; (d)
the existence and extent of credit insurance represented by GF to
cover accounts receivable not payable by governmental entities;
and (e) GF's use of investor proceeds for related party
transactions. 

     The Commission's Complaint charges the defendants with
violations of the antifraud provisions of Section 17(a) of the
Securities Act of 1933 ("Securities Act") and Section 10(b) of
the Securities Exchange Act of 1934 and Rule 10b-5 thereunder,
and seeks: (i) a permanent injunction from future violations of
the antifraud provisions of the federal securities laws; (ii) an
accounting; (iii) disgorgement of any ill-gotten gains, plus pre-
judgment interest thereon; and (iv) payment of civil penalties. 
The Complaint further charges GF, Lobel and Rossi with violation
of the registration provisions of Sections 5(a) and 5(c) of the
Securities Act and seeks to enjoin them from future violations of
those provisions.

     In a related matter, The Commission instituted a combined
cease and desist and administrative proceeding against Vincent P.
Loban ("Loban") and First Capital Marketing Group ("FCMG"), both
of Carmichael, California.  The Commission alleged that FCMG and
Loban, while assisting GF in the sale of approximately $25
million of Notes, willfully violated the registration provisions
of the federal securities laws by selling the unregistered Notes
and by failing to register as a broker or dealer.  FCMG and
Loban, without admitting or denying the allegations in the ==========================================START OF PAGE 2======   
      Litigation Release No.
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Commission's administrative order, consented to:  (i) the entry
of an order to cease and desist from committing or causing any
violation and any future violation of Sections 5(a) and 5(c) of
the Securities Act and Section 15(a)(1) of the Exchange Act; (ii)
the imposition of a censure; (iii) permanently refrain from
offering and selling unregistered commercial paper; and (iv) pay
a civil penalty in the aggregate amount of $5,000.