==========================================START OF PAGE 1====== U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 15235 /January 30, 1997 SECURITIES AND EXCHANGE COMMISSION v. CITI FINANCIAL SERVICES, CITI CORP REALTY PARTNERS IV, HAROLD GOLDSTEIN, RICHARD THOMAS MANDELL, a.k.a. MARK MORGENLENDER, ROBERT SINGLETON, MARK BARQUERA, a.k.a. MARK CABRERRO and ROBERTA CRAMPTON, Civil Action No. 96-0349 WJR (BQRx) (C.D. Cal.) The Securities and Exchange Commission ("Commission") announced that on December 23, 1996, United States District Judge William J. Rea of Los Angeles granted the Commission's motion for default judgment against defendants Citi Financial Services, Citi Corp Realty Partners IV (the Citi Entities"), Richard Thomas Mandell, a.k.a. Mark Morgenlender ("Mandell"), and Mark Barquera, a.k.a. Mark Cabrerro ("Barquera"). The default judgment was entered by the Court on January 24, 1997 and permanently enjoins the Citi Entities, Mandell, and Barquera from future violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The judgment also orders Mandell to pay $282,903.43 in disgorgement and prejudgment interest, plus civil penalties in the amount of $250,000, and imposes civil penalties against Barquera in the amount of $50,000. From October 1995 through the filing of the Commission's action on January 17, 1996, the Citi Entities, Mandell, and Barquera, both of whom were paroled felons, along with defendants Harold Goldstein ("Goldstein"), an inmate who was at the federal correctional facility in Lompoc, California and Robert Singleton ("Singleton") of Salt Lake City, Utah, another paroled felon, sold fictitious certificates of deposit ("CDs"). The defendants falsely claimed that the CDs were issued by Citibank in New York and insured by the federal government. On January 18, 1996, the Commission obtained a temporary restraining order against the defendants halting the sales of the fictitious certificates of deposit and freezing the assets of the Citi Entities, Mandell, Goldstein, and Singleton. On February 9, 1996, the Commission obtained a preliminary injunction which continued to bar the defendants from committing the fraudulent sales and continued the asset freeze. On December 26, 1996, the Commission obtained permanent injunctions and orders of disgorgement and prejudgment interest against Goldstein and Singleton, and an order imposing civil penalties against Singleton. The scheme was directed by Goldstein and executed by Mandell, Barquera, and Singleton. In selling the fictitious instruments, the defendants conducted a nationwide newspaper and direct marketing campaign aimed at luring elderly investors into purchasing the bogus securities. The defendants defrauded individual investors out of approximately $267,000. In addition, the Commission learned that in response to the defendants' marketing efforts, hundreds of potential victims had expressed an ==========================================START OF PAGE 2====== interest in purchasing the fictitious securities prior to the issuance of the temporary restraining order. For further information, see Litigation Release Nos. 14789, 14815, and 15210.