U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Rel. No. 18350 / September 12, 2003

SEC Files Civil Contempt Charges Against Law Firm and Accounting Firm for
Violation of Asset Freeze Order

   The Commission announced that it filed civil contempt charges on
   September 11, 2003, against the Los Angeles, California-based law firm
   of Geragos & Geragos and two of its attorneys (Mark Geragos and George
   Buehler), and the Los Angeles-based accounting firm of Laffer &
   Gottlieb and its two principals (Martin Laffer and Barbara Gottlieb)
   for their violations of an asset freeze order. That order was entered
   in May 2002 by a Rhode Island federal court in a Commission fraud
   action against Dennis S. Herula, Mary Lee Capalbo, and others. Herula
   is also a defendant and Capalbo is a relief defendant in a second
   Commission fraud action filed in July 2002 in the U.S. District Court
   for the Northern District of California.

   In its contempt application as to the Geragos law firm, the Commission
   alleged that, in connection with its representation of Herula and
   Capalbo in the Commission actions, the Geragos firm, through Mark
   Geragos and George Buehler, solicited and accepted attorneys' fees in
   the amount of $50,000 through credit card payments from Capalbo in
   October 2002. The contempt application alleged that those payments
   violated the asset freeze order entered by the Rhode Island District
   Court in May 2002 and served on the Geragos firm in July 2002 that
   prohibited Capalbo and her attorneys from transferring any of her
   funds. The Commission further alleged that the Geragos firm and the
   two individual attorneys also failed to adhere to procedures ordered
   by the court for the payment of attorneys' fees, which required court
   approval prior to the payment of such fees. In its contempt
   application as to the Laffer & Gottlieb accounting firm, the
   Commission alleged that, in connection with accounting services they
   provided to Herula and Capalbo in the Commission actions, the Laffer &
   Gottlieb firm, through Martin Laffer and Barbara Gottlieb, solicited
   and accepted fees in the amount of $41,350 through credit card
   payments from Capalbo in September and October 2002. The contempt
   application alleged that the payments to the Laffer & Gottlieb firm
   violated the May 2002 asset freeze order entered by the Rhode Island
   District Court against Capalbo.

   For further information, please see Litigation Release Numbers (April
   10, 2003)(civil contempt charges filed against Herula and Capalbo);
   (January 29, 2003)(final judgment against Capalbo); (October 23,
   2002)(final judgment against Herula); and (May 13, 2002)(preliminary
   injunction and asset freeze).