U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 16040 / January 22, 1999 U.S. v. RANDALL SMITH KUHLMANN, et al. Criminal Case No. 97-CRZ871-H, U.S.D.C., S.D. Cal. The U.S. Attorney for the Southern District of California and the Securities and Exchange Commission announced that on January 12, 1999, Judge Marilyn Huff sentenced David Darling to 46 months in prison in connection with a scheme to defraud investors in Amtel Communications, Inc. Darling and Randall Kuhlmann pled guilty to fraudulently inducing potential investors to invest in Amtel’s sale-leaseback pay telephone program. Kuhlmann will be sentenced on April 19, 1999. The criminal charges against Darling and Kuhlmann are based on the same activities alleged in a civil action brought by the Commission on July 17, 1995, against Amtel, Kuhlmann, and Darling. The Commission alleged that the defendants raised $51.4 million from investors by selling pay telephones, contracting to lease the pay telephones for $50 per month, and repurchasing the pay telephones at the original cost when the lease terminated. Amtel also conducted a Ponzi scheme, whereby investors were paid with new investor money. For further information, please see Litigation Release Nos. LR-15547 and LR-14713.