U.S. Securities and Exchange Commission

   Litigation Release No. 16659 / August 18, 2000

Securities and Exchange Commission v. Phoenix Telecom, L.L.C., Jerold
Benjamin Clawson, Jerry Deland Beacham and H. Ellis Ragland, Jr., Civil
Action File No. 1 00-CV-1970-JTC (N.D.Ga.)

   The Securities and Exchange Commission ("Commission") announced that
   on August 14, 2000, Judge Jack T. Camp of the United States District
   Court for the Northern District of Georgia entered a preliminary
   injunction against Phoenix Telecom, L.L.C. ("Phoenix") and Jerold
   Benjamin Clawson ("Clawson") and continued previously ordered
   emergency relief against all of the defendants. The Commission did not
   seek a preliminary injunction against the defendants other than
   Phoenix and Clawson. However, Judge Camp directed that the
   receivership for Phoenix would remain in place, that an accounting be
   provided, and continued an earlier order freezing assets of all of the
   defendants.

   The complaint, filed on August 2, 2000, seeks permanent injunctions
   against Phoenix, Clawson, and two other individual defendants, Jerry
   Deland Beacham ("Beacham") and H. Ellis Ragland, Jr. ("Ragland"). The
   complaint alleges that Phoenix, Clawson, Beacham, and Ragland engaged
   in fraud in the offer and sale of unregistered securities in the form
   of investment contracts, and alleges that the defendants promoted a
   massive fraudulent scheme through the use of insurance agents and over
   the Internet, in which Phoenix raised more than $74 million from more
   than 2,000 mostly elderly investors.

   The Court found that the scheme was based upon purported investments
   in customer owned, coin-operated telephones offered and sold in units,
   involving a telephone, site lease, lease/back agreement and buy/back
   agreement, that constitute securities, and further concluded that no
   registration statement was filed with the Commission in connection
   with these securities. The Court found that although Phoenix was the
   source of lease payments on the telephones and was the insurer of the
   investment, investors were not told that Phoenix was losing money, had
   a negative net worth, and was dependent on revenue from new investors
   to sustain its operations. The Court also found that a prior
   securities law injunction and related criminal prosecution against
   Ragland was not disclosed to investors.

   The complaint seeks permanent injunctions against defendants Phoenix,
   Clawson, Beacham and Ragland to prevent future violations of Sections
   5(a), 5(c) and 17(a) of the Securities Act of 1933 and Section 10(b)
   of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The
   complaint also seeks an accounting, disgorgement and prejudgment