SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 16945 / March 23, 2001

   SECURITIES AND EXCHANGE COMMISSION v. PINNFUND USA, INC., PEREGRINE
   FUNDING, INC., ALLIED CAPITAL PARTNERS, GRAFTON PARTNERS, SIX SIGMA,
   LLC A/K/A 6 SIGMA, LLC, MICHAEL J. FANGHELLA, JAMES L. HILLMAN,
   RELIANCE HOLDINGS, LLC, AND KELLY COOK A/K/A KELLY JAYE A/K/A KELLY
   SPAGNOLA (01-CV-0496-H (LAB) S.D.Cal.)

   The United States Securities and Exchange Commission ("Commission")
   announced that on March 23, 2001, the Honorable Marilyn L. Huff,
   United States District Judge for the Southern District of California,
   issued a temporary restraining order halting an ongoing $276 million
   securities fraud by Michael J. Fanghella ("Fanghella") and James L.
   Hillman ("Hillman") and entities controlled by them. The Court (1)
   ordered the defendants to cease immediately their fraudulent
   activities; (2) placed a freeze on Fanghella's and PinnFund USA,
   Inc.'s assets; (3) appointed Charles G. La Bella as temporary receiver
   over PinnFund pending a hearing to determine the full extent of the
   fraudulent conduct and (4) granted other relief. The March 23, 2001
   order follows the issuance of an order by the Court on March 21, 2001,
   which prohibited the transfer of assets or property by the defendants
   to a foreign location, prohibited the destruction of documents by the
   defendants and granted other relief pending a hearing that was held on
   March 22 and 23. A hearing on whether a preliminary injunction should
   be issued against the defendants is scheduled for April 2, 2001.

   The Commission's complaint, filed on March 21, 2001, alleges that
   since 1993, Fanghella, Hillman, PinnFund USA, Inc. ("PinnFund") and
   entities controlled by Fanghella and Hillman (Peregrine Funding, Inc.,
   Allied Capital Partners, Grafton Partners and Six Sigma, LLC aka 6
   Sigma, LLC) (collectively, the "Funding Entities") have raised at
   least $276 million from at least 166 investors, purportedly for the
   purpose of funding PinnFund's business of writing residential home
   mortgages. In fact, Fanghella, Hillman, PinnFund and the Funding
   Entities are misappropriating the funds raised by the Funding Entities
   and are using the funds to finance Fanghella's lavish lifestyle,
   including the use of at least $10 million in investor funds to buy a
   $5 million home, furnishings and other accessories for his girlfriend.
   In addition, the complaint alleges that Fanghella, Hillman, PinnFund
   and the Funding Entities have circulated altered financial statements
   of PinnFund and forged auditors' reports, which contain numerous
   fraudulent misrepresentations and omissions, conceal more than $95
   million in losses incurred by PinnFund since 1997 and conceal the
   transfer of more than $107 million to Fanghella since 1997.

   The Commission obtained an order temporarily restraining Fanghella,