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         UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 15102 / October 1, 1996

Accounting and Auditing Enforcement
Release No. 840 / October 1, 1996

Securities and Exchange Commission v. The AppleTree Companies,
Inc., f/k/a Modami Services, Inc., Michael H. Salit, David B.
Lobel, Paul B. Kravitz, and W. Scott Long III, No. 96-8675-CIV-
RYSKAMP (S.D. Fla.)
 

     The Commission announced that on September 30, 1996, it
filed a civil injunctive action in the United States District
Court for the Southern District of Florida against The AppleTree
Companies, Inc. ("AppleTree"), Michael H. Salit, David B. Lobel,
and Paul B. Kravitz, former officers and directors of AppleTree,
and W. Scott Long III, the former president of the now-defunct
underwriter of AppleTree's August 1992 registered offering. 
AppleTree, formerly known as Modami Services, Inc., until
recently was located in Boca Raton, Florida.


     The Commission charged the individual defendants with making
material misrepresentations and omissions in connection with
AppleTree's 1992 offering.  Salit, Lobel and Kravitz were charged
with making fraudulent periodic filings with the Commission
during 1992 and 1993, and Salit and Lobel were charged with
providing AppleTree's independent accountants with false
information which caused AppleTree to fail to make and keep
accurate books and records.

     In its complaint, the Commission alleged that AppleTree's
1992 offering materials and subsequent filings misrepresented or
failed to disclose that (a) Salit and Lobel had an undisclosed
relationship with the company from whom AppleTree purchased its
raw materials; (b) AppleTree did not own $440,000 in machinery
and equipment represented on its balance sheet as having been
contributed to the company by Salit and Lobel; (c) AppleTree made
an undisclosed $250,000 loan from the proceeds of its 1992
offering to an unrelated company to finance the building of a
casino; and (d) AppleTree included in its 1992 annual report
filed with the Commission a joint venture agreement signed by
Kravitz without authorization by the other party to the
agreement.

     The Commission seeks a permanent injunction against
violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act,
and Rules 12b-20, 13a-1 and 13a-13, thereunder, together with an
accounting, against AppleTree.  Against the individual defendants
the Commission seeks a permanent injunction against violations of
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Section 17(a) of the Securities Act, Section 10(b) of the
Exchange Act, and Rule 10b-5 thereunder, together with an
accounting, disgorgement and civil penalties.  In addition, the
Commission seeks a permanent injunction against violations of
Section 13(b)(5) of the Exchange Act, and Rules 13b2-1 and 13b2-
2, thereunder, against Salit and Lobel.