U.S. Securities and Exchange Commission

Litigation Release No. 18357 / September 22, 2003

Accounting and Auditing Enforcement Release No. 1867 / September 22, 2003

Former Chief Executive Officer of Craig Consumer Electronics Found Guilty of
Fraud After Criminal Trial

U.S. v. Richard I. Berger and Bonnie K. Metz, CR 00-994 (A)-RMT

   The United States Attorney for the Central District of California
   announced that on September 4, 2003, after a two-month jury trial in
   federal district court in Los Angeles, Richard I. Berger, the former
   president, chief executive officer, and chairman of the board of
   directors of Craig Consumer Electronics, Inc., was found guilty of
   twelve felony counts, including conspiracy, bank fraud, falsifying
   corporate books and records, and making false statements in filings
   with the Securities and Exchange Commission. Craig sold consumer
   electronics to retailers such as Best Buy and Circuit City, and was
   based in Cerritos, California.

   A federal grand jury indictment alleged that in 1996 and 1997, Berger
   fraudulently enabled Craig to borrow significantly more from its line
   of credit than was allowed under the terms of its credit agreement
   with a consortium of four banks. The indictment further alleged that
   Berger fraudulently overstated Craig's inventory and accounts
   receivable. Craig's reported inventory and accounts receivable
   established the amount of Craig's borrowing availability from the
   bank. By fraudulently transferring defective inventory to a
   refurbished inventory category, and by overstating Craig's accounts
   receivable through the creation of bogus shipments and by shipping
   product early, Berger defrauded the bank into loaning Craig more than
   allowable under Craig's borrowing agreement. The bank consortium
   ultimately lost approximately $8 million and many investors lost their
   entire investment in the company.

   The jury deadlocked on other counts against Berger and on counts
   against Bonnie K. Metz, Berger's co-defendant and Craig's former vice
   president of international sales. Donna Richardson, Craig's former
   chief financial officer, earlier pled guilty to three criminal counts
   of bank fraud. Sentencing for both Berger and Richardson is pending.

   Previously, on September 27, 2000, the Commission filed a civil
   complaint against Berger and Richardson in federal district court in
   Los Angeles for misleading investors through false disclosure and
   financial reporting in filings with the Commission. Simultaneous with
   the filing of the complaint, Berger consented to the issuance of a