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         UNITED STATES SECURITIES AND EXCHANGE COMMISSION


LITIGATION RELEASE NO. 14872 / April 11, 1996

UNITED STATES OF AMERICA v. JEFFERY H. REYNOLDS, III
3:96-CR-0003, USDC, ND/TX [Dallas]

     The Securities and Exchange Commission and the United States
Attorney for  the Northern  District of  Texas announced  that on
April 5, 1996, Jeffery H. Reynolds, III pled guilty to two counts
of fraud in the sale of worthless casualty, liability, marine and
special-risk insurance policies, and  surety bonds which produced
more than $500,000 from policyholder payments. In the sale of the
policies  and  surety  bonds,  Reynolds  falsely  represented  to
customers that  his two  insurance companies possessed  more than
$450  million in  assets, including  a portfolio  of fraudulently
valued securities.  Reynolds is scheduled for  sentencing on June
6, 1996 and could receive up to 10 years in prison.

     On  August 4, 1993, in an action brought by the Commission's
Fort  Worth  office,  Reynolds   was  permanently  enjoined  from
violating  the  antifraud provisions  of  the federal  securities
laws. The  Commission's complaint  alleged that Reynolds,  in his
capacity as  a  director of  Cortez International,  Ltd., a  now-
defunct  Canadian  foreign  private  issuer,  prepared false  and
misleading informational material  concerning Cortez's  financial
condition and business prospects,  including claims relating to a
portfolio   of  fraudulently   valued   securities,   which   was
distributed to  broker-dealers and  the investing public.  At the
conclusion of  its case, the Commission's  investigative files in
this matter were turned over to the U. S. Attorney's office which
resulted  in  a  subsequent  investigation  of   Reynolds'  other
fraudulent activities.