United States Securities and Exchange Commission

LITIGATION RELEASE NO. 17614 \ July 15, 2002

   Civil Action No. 3 98-CV-01596-D, USDC ND/TX (Dallas Division)

   On May 31, 2002, the Honorable Sidney A. Fitzwater, United States
   District Judge, Northern District of Texas (Dallas), entered a final
   judgment in a $4.48 million-dollar offering fraud scheme against
   Kendyll R. Horton (Borger, Texas) and his mother Hazel A. Horton
   (Borger, Texas). The judgment orders the Hortons to disgorge $4.48
   million, together with $1.4 million in prejudgment interest, to a
   court-appointed receiver for the benefit of defrauded investors,
   orders each of the Hortons to pay a $110,000 civil money penalty, and
   enjoins the Hortons from violating the registration and antifraud
   provisions of the federal securities laws (Sections 5(a) and (c) and
   17(a) of the Securities Act of 1933, Section 10(b) of the Securities
   Exchange Act of 1934 and Rule 10b-5 thereunder).

   The Commission's complaint alleged that the Hortons defrauded
   investors in connection with the offer and sale of common stock of
   American Automation, Inc. Judge Fitzwater determined that, among other
   things, the Hortons were responsible for misrepresentations that
   American Automation had completed development of software which would
   permit consumers to purchase automobile insurance on the Internet or
   from free-standing kiosks and was actually operating such kiosks; that
   American Automation would generate gross sales of approximately $122
   million and profits of nearly $100 million by its third year of
   operation; and that American Automation was planning an initial public
   offering ("IPO") and its shares would soon rise from $1 per share to
   as much as $20 per share. Judge Fitzwater also determined that the
   Hortons were responsible for failing to inform investors that American
   Automation had no marketable software and no agreements with insurance
   companies by which to market insurance at kiosks; that American
   Automation paid its sales representatives a salary and a commission
   for selling American Automation shares; that American Automation
   transferred investor funds to other corporations owned by the Hortons;
   that the Hortons used investor funds for personal use; and that
   American Automation had taken no meaningful steps to effectuate an
   IPO.

   Earlier, the Commission obtained judgments enjoining two other
   participants in the scheme, Merle B. Gross and Jayne Roose. The Court
   waived disgorgement from Gross because of his demonstrated financial
   inability to pay, but ordered $61,206 in disgorgement from Roose.
   American Automation is presently in bankruptcy.
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