U.S. Securities and Exchange Commission

Litigation Release No. 17832 / November 8, 2002

United States District Court for the Northern District of Georgia, Civil
Action No. 1 98-CV-0803-RWS

   The Securities and Exchange Commission announced today that an
   application for an order to show cause why defendant Larry G. Smith
   (Smith) should not be held in civil contempt was filed by the
   Commission on November 4, 2002, in the United States District Court
   for the Northern District of Georgia, based on his failure to pay
   disgorgement and civil penalties, as directed by the Court's January
   3, 2000 order. That order enjoined Smith from further 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 Court also ordered Smith to pay disgorgement in the
   amount of $1,367,235 with prejudgment interest, and imposed a civil
   penalty of $110,000.

   On March 16, 1998, the Commission alleged in its complaint that
   beginning in April, 1995, International Heritage, Inc. (IHI), a North
   Carolina corporation, through Smith and others, solicited individuals
   throughout the United States to invest in a pyramid scheme through
   misleading promotional materials, meetings, videotapes, internet web
   pages, and national conference calls to increase investor interest.
   Investors purchased "business centers" and IHI raised more than $150
   million from over 155,000 investors. The complaint alleged that
   interests in the program, which are described by IHI as business
   centers, are securities. In addition to selling interests in the
   pyramid scheme, between July 17, 1997 and November 1, 1997, the
   defendants sold $5 million in notes convertible into shares of IHI
   common stock. According to the complaint, the defendants knowingly
   misrepresented IHI's financial condition to investors and concealed
   the fact that IHI was operating a pyramid scheme. Smith was a founder
   and director of IHI.

   For tips on how to avoid Internet "pump-and-dump" stock manipulation
   schemes, visit . For more information about Internet fraud, visit . To
   report suspicious activity involving possible Internet fraud, visit .

   See also (March 17, 1998); (August 26, 1999); (October 7, 1999);
   (January 10, 2000); and (May 1, 2000).

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Modified 11/08/2002