United States Securities and Exchange Commission

   Litigation Release No. 16396 / December 29, 1999

   SECURITIES AND EXCHANGE COMMISSION v. FRED CARTER AND WENDELL CARTER,
   U.S. District Court for the District of Columbia, Civil Action No.
   99-02848 (D.D.C. October 27, 1999) (PLF).

   SEC SUES FRED CARTER AND WENDELL CARTER FOR FRAUDULENTLY SELLING
   SECURITIES OF INTERNET TELEPHONY COMPANY TO WASHINGTON, D.C. AREA
   RESIDENTS

   On October 27, 1999, the Securities and Exchange Commission filed
   securities fraud charges against Fred Carter, president and chief
   executive officer of American Telephone and Telecommunications
   Corporation (ATTC), a District of Columbia corporation purportedly set
   up to establish a long distance telephone service using Internet
   telephony technology, and Wendell Carter, ATTC's vice president of
   corporate sales. The complaint, filed in the United States District
   Court in the District of Columbia, alleges the defendants violated the
   antifraud provisions of the federal securities laws, Section 17(a) of
   the Securities Act of 1933 (Securities Act) and Section 10(b) of the
   Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5
   thereunder, by selling to the public ATTC stock and joint venture
   interests in a series of fraudulent offerings targeted mainly to
   Washington, D.C. area residents.

   The complaint alleges that from October 1996 through October 1997,
   Fred Carter and Wendell Carter, who are unrelated to each other, made
   material misrepresentations and omissions in promotional mailings and
   seminars used to induce people to invest in ATTC. According to the
   complaint, the defendants falsely claimed, among other things, to have
   designed a revolutionary technology for routing phone calls using the
   Internet, that ATTC's stock price would at least triple within one
   year, and that ATTC had a strategic alliance with an Internet
   telephony product manufacturer that would help ATTC implement its
   telephone service. In fact, the complaint alleges, ATTC did not design
   any technology, but merely purchased Internet telephony products for
   use in investor demonstrations. In addition, there was no reasonable
   basis for ATTC's financial projections and there existed no alliance
   with an Internet telephony product manufacturer.

   The complaint further alleges that the defendants failed to disclose
   to investors, among other things, that, in 1989, Fred Carter was
   convicted of securities fraud in California for making similar
   misrepresentations about a computer technology company he owned. Fred
   Carter has been the subject of an outstanding arrest warrant since
   1991 arising from that conviction. In addition, investors were not