UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Litigation Rel. No. 18082 / April 10, 2003

       Commission Files Civil Contempt Charges Against Dennis Herula
               and Mary Lee Capalbo in Securities Fraud Case

   The Commission announced that, on April 9, 2003, it filed civil
   contempt charges against Dennis Herula and Mary Lee Capalbo alleging
   that they violated federal court orders issued in a civil fraud case
   filed by the Commission. In its complaint, filed April 1, 2002, the
   Commission alleged that Herula, a former Raymond James broker, his
   wife Capalbo, a Rhode Island attorney, and others participated in a
   fraudulent scheme that raised at least $52 million from investors
   between 1999 and 2001. The Rhode Island federal court issued a written
   order on May 8, 2002, imposing preliminary injunctions and asset
   freezes against Herula, Capalbo and others. The court also ordered
   Herula and Capalbo to submit written financial accountings to the
   Commission staff.

   In its contempt application as to Herula, the Commission alleges that
   Herula has recently spent thousands of dollars in violation of the
   court-imposed asset freeze against him, including over $10,000 for an
   apparent car purchase in December 2002, over $7,000 in ATM
   withdrawals, and over $10,000 in checks and bill payments in January
   2003. Further, the Commission's application alleges that Herula has
   maintained several financial institution accounts with balances of
   tens of thousands of dollars that he failed to identify to the
   Commission staff in his court-ordered accounting. In its contempt
   application as to Capalbo, the Commission alleges that $50,000 was
   transferred in October 2002 from credit card accounts in Capalbo's
   name to a law firm representing Herula and Capalbo. The Commission
   alleges that Capalbo did not follow the specific procedures ordered by
   the court in the preliminary injunction for use of funds to pay
   attorneys' fees. Further, the court-ordered accountings submitted by
   Herula and Capalbo did not identify these transfers or the existence
   of the accounts from which the transfers were made.

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


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Modified 04/10/2003