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U.S. Securities and Exchange Commission

Phoenix Telecom, L.L.C.

On August 2, 2000, the SEC filed a civil enforcement action against Phoenix Telecom, L.L.C., Jerold B. Clawson, Jerry D. Beacham, and H. Ellis Ragland, Jr. The SEC alleged that the defendants fraudulently raised over $74 million from more than 2,000 mostly elderly investors, through the purported investments in pay telephone leasebacks. The individual defendants have received permanent injunctions, and ordered to pay disgorgement and/or civil penalties. For more information about the SEC's action, you can read Litigation Release Nos. 16642 (Aug. 2, 2000), 16659 (Aug. 18, 2000), 17003 (May 16, 2001), and 17089 (Aug. 3, 2001).

The Court appointed William G. Hays, Jr. as Receiver for Phoenix Telecom to recover assets. The Receiver has set up a website for investors about the litigation that includes the his first interim report and a way for investors to receive periodical email updates.

Modified: 07/14/2003