UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 15105 / October 2, 1996 

Securities and Exchange Commission v. Gary W. Berus, Patricia S.
Gale, Robert W. Harper and Nancy A. Swoffer, (United States
District Court for the Eastern District of Michigan, Civil Action
No. 96-CV-74524)

     The Securities and Exchange Commission announced that on
September 30, 1996, a Complaint was filed in the U.S. District
Court for the Eastern District of Michigan against Gary W. Berus
(Berus), Patricia S. Gale (Gale), Robert W. Harper (Harper) and
Nancy A. Swoffer (Swoffer) seeking an Order of Permanent
Injunction, Disgorgement and Civil Penalties based on their
violations of Sections 17(a)(1), 17(a)(2) and 17(a)(3) of the
Securities Act of 1933, Section 10(b) of the Securities Exchange
Act of 1934 (Exchange Act) and Rule 10b-5 promulgated thereunder
and Gale's and Swoffer's violations of Sections 15(a)(1) and
15(c)(1) of the Exchange Act.

     The Commission's Complaint alleges, among other things, that
during the period from 1990 through 1994, Berus, Harper and their
sales agents, Gale and Swoffer, defrauded a total of
approximately 120 investors through the offer and sale of $3
million in securities.  Specifically, through three separate
investment scams, Berus, Harper, Gale and Swoffer offered and
sold fictitious certificates of deposit (CDs) issued by a
purported international bank, Century Security Bank and Trust,
Ltd. (Century Security), and interests in two investment clubs,
the Profit Masters Group (Profit Masters) and Meca International,
Inc. (Meca).

     In connection therewith, CD investors were told that they
were purchasing variable rate CDs, with their money to be used by
Century Security to finance various business ventures. 
Investment club investors were told that their funds would be
pooled to purchase common stocks.  Depending on the investment
scam, investors were promised annual returns ranging from 8% to
24%.  In return for the investments, Berus and Harper generally
sent investors confirmations for the funds invested and
fictitious monthly and/or annual account statements which lulled
investors into believing the legitimacy of the investments.  In
addition, Berus and Harper sometimes paid investors purported
monthly interest on their investments, and, in some instances,
returns of portions of their principal.

     Despite the above representations regarding Century
Security, Profit Masters and Meca, however, Berus and Harper did
not invest the money as represented.  Instead, Berus and Harper
simply operated three separate "ponzi" schemes, with Gale and
Swoffer their willing agents.  In connection with each of the
three schemes, investor money was deposited into brokerage
accounts, bank accounts and a credit union account, all of which
==========================================START OF PAGE 2======

Berus and/or Harper controlled.  Undisclosed to investors, Berus
and Harper then used investor funds to pay personal and business
expenses, including commissions to Gale and Swoffer, to make
payments to prior investors and to unsuccessfully trade in
speculative investments, including commodity futures and options.

Consequently, returns to existing investors were dependent upon
the ability of Berus, Harper, Gale and Swoffer to continually
raise additional funds from new investors.  Thus, in connection
with the offer, purchase and sale of securities,
misrepresentations and omissions of material fact were made
regarding the legitimacy of the investments, the returns to be
expected, the risks involved, the commissions received and the
use of investor proceeds.  The complaint also names Harper's
wife, Marilyn Harper, as a relief defendant.

     Simultaneous with the filing of the Commission's complaint,
the Commodity Futures Trading Commission filed an action against
Berus, Gale and Meca for violations of the Commodity Exchange
Act.