==========================================START OF PAGE 1====== UNITED STATES SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 15109 / October 4, 1996 UNITED STATES v. GRANT R. CURTIS; LEO J. MANGAN, a/k/a Lee Mangan, Todd Thomas, Donald Thomas, Mark Barron, Mike Barron, Mark Powers, Kevin Selcser, and Guy Fulkerson; TIMOTHY H. MASLEY; PEDRO GOMEZ, a/k/a Pedro Gomes and Pedro DeBrito; RAY IRANGY, a/k/a Ray Irngy, Ray Irngi, Ray Irangi and Ray Irni; JAMES W. NEAREN, (OCTOBER 2, 1996) UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK The United States Securities and Exchange Commission ("SEC") announced today that in connection with a coordinated investigation, on October 2, 1996, the United States Attorney for the Eastern District of New York obtained an indictment from a federal grand jury charging GRANT R. CURTIS ("Curtis"), age 36, of Danville, California; LEO J. MANGAN ("Mangan"), age 40, of Lindenhurst, New York and Pompano Beach, Florida; TIMOTHY H. MASLEY ("Masley"), age 35, of Lindenhurst, New York and Guilford, Connecticut; PEDRO GOMEZ ("Gomez"), age 37, of Branford, Connecticut and Waterbury, Connecticut; RAY IRANGY ("Irangy"), age 50, of Brooklyn, New York; and JAMES W. NEAREN ("Nearen"), age 43, of Lighthouse Point, Florida with one count of conspiracy to commit securities fraud and two counts of securities fraud. This criminal prosecution involves a scheme to avoid the registration requirements of the Securities Act of 1933 through the sale of securities purportedly in reliance on the Regulation S exemption from such requirements. Regulation S provides a limited exemption from the federal registration requirements for stock sold to overseas purchasers. Regulation S provides no exemption, however, for transactions designed as a scheme to avoid the registration requirements nor does it cover any sales of securities made in the United States. The 3-count indictment alleges that from in or about 1990 through the present, Curtis, Mangan, and Masley controlled the ==========================================START OF PAGE 2====== business affairs, including authority over issuance and transfer of the common stock, of COMPREHENSIVE ENVIRONMENTAL SYSTEMS, INC. ("Comprehensive"), and ALTER SALES CO., INC. ("Alter"). Comprehensive is a public company with offices in West Babylon, New York, and was formerly known as INTEGRATED RESOURCE TECHNOLOGIES, INC. Alter is a public company with offices in Lighthouse Point, Florida, and is now known as ICIS MANAGEMENT GROUP, INC. The indictment further charges that the control by Curtis, Mangan and Masley was not disclosed to the public, with the exception of Mangan's position as an officer of Comprehensive. The indictment further contends that Curtis and Mangan engaged in efforts to conceal from co-workers, regulatory authorities, and the investing public, material information about their personal backgrounds, namely, Curtis' 1994 federal bank fraud conviction and Mangan's 1979 and 1991 federal drug trafficking convictions. The indictment alleges that Curtis, Mangan and Masley engaged in an illegal scheme to defraud public investors in the stock of Comprehensive and Alter. Specifically, the indictment charges that Curtis, Mangan, and Masley caused Comprehensive and Alter to issue over 3,000,000 shares (approximately 2,300,000 of Alter and 700,000 of Comprehensive) of unregistered and/or fraudulently issued stock, purportedly in reliance on exemption from registration under Regulation S and Rule 144, as well as reduced disclosure permitted by registration pursuant to Form S- 8. This stock was generally issued at a discount to market price and in some cases pursuant to purported acquisitions of other companies. This stock was issued to Gomez, Irangy, and other persons and entities controlled by the defendants. Some of these recipients did not exist, were not aware that they were being issued stock, or were acting under the direction and control of the defendants. Gomez, Irangy, and others, at the direction of Curtis, Mangan, and Masley, then caused such stock to be transferred from the initial recipients to international and domestic brokerage accounts under the control of the defendants. In some cases, the defendants prepared or directed the preparation of fraudulent documents to effect such transfers. These shares were then available to the defendants to be sold for profit at the prevailing market price. The indictment also charged that the defendants engaged in efforts to inflate and maintain the market price of Comprehensive and Alter so that they would be able to reap profits by selling the discounted shares that they fraudulently issued. In furtherance of the conspiracy, the defendants prepared or caused to be prepared fraudulent documents, including consulting services contracts and documents filed with the SEC and the NASDAQ Stock Market regulators. The purpose of these fraudulent documents was, among other things, to justify the issuance of stock, conceal the true nature of the companies' acquisitions, ==========================================START OF PAGE 3====== and conceal the defendants' control of Comprehensive and Alter. The indictment also charges that the defendants prepared or caused to be prepared false and misleading press releases concerning the business operations of both Comprehensive and Alter. The indictment further charges that within weeks of the termination of defendant Nearen's employment as an attorney with the SEC, Curtis and Mangan hired Nearen to provide legal services to Comprehensive and Alter. The indictment charges that, in addition to his participation in the fraudulent activities described above, Nearen revealed non-public information about SEC investigations that he had obtained during the course of his employment as an attorney with the SEC. The indictment further charges that Mangan and Curtis also told a person that people who informed the SEC about their activities would be killed. The SEC's investigation of this matter continues.