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         UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 15172 / December 3, 1996.

Accounting and Auditing Enforcement 
Release No. 860 / December 3, 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 Securities and Exchange Commission announced that on November
26, 1996, a Final Judgment of Permanent Injunction and Other
Relief was entered against Paul B. Kravitz (Kravitz) by the
United States District Court for the Southern District of
Florida.  The final judgment enjoins Kravitz from future
violations of Section 17(a) of the Securities Act of 1933,
Section 10(b) of the Securities Exchange Act of 1934, and Rule
10b-5 thereunder.  The final judgment also requires Kravitz to
pay a $25,000 civil money penalty.  Kravitz consented to the
entry of the permanent injunction and payment of the civil
penalty without admitting or denying the Commission's
allegations.

In its complaint, the Commission alleged that Kravitz, the former
chairman and president of The AppleTree Companies, Inc.
(Appletree), which until recently had been located in Boca Raton,
Florida and was formerly known as Modami Services, Inc., violated
the antifraud provisions of the Securities Act and the Exchange
Act by misrepresenting and failing to disclose material facts in
connection with AppleTree's 1992 registered offering of its
common stock and in AppleTree's 1992 and 1993 annual reports on
Form 10-K filed with the Commission.  More particularly, the
Commission alleged that (a) Kravitz failed to disclose to
investors in AppleTree's 1992 registered offering that $250,000
of the proceeds of that offering were loaned to an unrelated
company to finance the building of a gambling casino; (b) while
AppleTree was negotiating a joint venture agreement with a
company called TSR, Inc. to market a dehydrated milk product,
Kravitz signed the name of TSR's president to the proposed joint
venture agreement without being authorized to do so and then
caused AppleTree to include the executed joint venture agreement
in its 1992 10-K which AppleTree filed with the Commission; and
(c) Kravitz prepared and/or caused to be filed AppleTree's 1993
annual report on Form 10-KSB which misrepresented that AppleTree
and TSR had "mutually agreed" not to pursue the joint venture due
to "marketing concerns" when in fact TSR's president had broken
off negotiations with AppleTree upon discovering that Kravitz had
signed his name to the proposed joint venture agreement without
authorization.
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Based on the above, the Commission alleged that Kravitz violated
Section 17(a) of the Securities Act, Section 10(b) of the
Exchange Act, and Rule 10b-5 promulgated thereunder.