Securities and Exchange Commission

Litigation Release No. 17780 / October 10, 2002

, Civil Action No. 3 01CV00116 (W.D. Va.) (Honorable James H. Michael, Jr.)

   On September 30, 2002, the Honorable James H. Michael, Jr., Senior U.
   S. District Judge for the Western District of Virginia,
   Charlottesville Division, entered orders finding Kenneth G. Mason and
   Birgit Mechlenburg in civil contempt for violating the accounting and
   asset freeze provisions contained in a temporary restraining order
   ("TRO"), and extended in subsequent orders, that the court had entered
   on November 19, 2001 in connection with the SEC's lawsuit against
   Mechlenburg, Mason and others.

   The lawsuit stems from a massive international Ponzi scheme
   orchestrated by Terry L. Dowdell, in which Dowdell, utilizing various
   marketers, raised more than $70 million from investors in the U.S. and
   abroad for a fictitious trading program purportedly involving the
   purchase and sale of foreign bank instruments and purportedly being
   operated by Vavasseur Corporation, a Bahamian corporation that is also
   named as a defendant in this action. Dowdell previously admitted the
   fraud, and consented to the disgorgement of all of his assets.
   According to the SEC's complaint, Mason and Mechlenburg were marketers
   for the program, and received hundreds of thousands of dollars in
   commissions in connection with their introduction of investors into
   the program.

   The contempt motion against Mason, filed on June 20, 2002, arose from
   his omission of a bank account containing approximately $27,000 from
   an accounting he submitted to the Court in November, in violation of
   accounting requirements contained in the TRO, and for his dissipation
   of those funds without the knowledge or permission of the court, in
   violation of the asset freeze requirements of the TRO. The ruling came
   after an evidentiary hearing was held on the matter. This is the
   second time that the Court has held Mason in contempt. The Court
   previously found Mason in contempt on March 14, 2002, following the
   SEC's filing of the motion on February 6, 2002, for transferring
   $5,000 out of one of his accounts on the day that he learned of the
   TRO.

   The contempt motion against Mechlenburg, filed on August 16, 2002,
   arose from her transfer of all of her assets overseas in violations of
   the asset freeze and repatriation provisions of the TRO. The SEC
   learned of this transfer from a neighbor of Mechlenburg, who reported
   in July 2002 that two gentleman were loading the contents of Ms.
   Mechlenburg's rented home into a large industrial shipping container.
   The shipping container was shipped our of the country before the SEC