SECURITIES AND EXCHANGE COMMISSION

     Litigation Release No. 15670 / March 13, 1998

     Securities and Exchange Commission v. Capital Acquisitions, Inc., The
     Somerset Group, Inc., Wayne Notwell and Clealon Mann Civil Action No.
     2:97CV-0977S (USDC UT.) 

          On March 12, 1998, Judge David Sam, Chief United States Judge for the
     District of Utah, signed an order appointing a Special Agent for Capital
     Acquisitions, Inc. ("Capital").  The Special Agent, Robert G. Wing of the
     Salt Lake City law firm of Prince, Yeates and Geldzahler, is charged with
     performing a full accounting of the assets of the company which the
     Securities and Exchange Commission sued for operating a Ponzi scheme that
     raised nearly $24 million in violation of the federal securities laws. 

          The Commission filed the action against Capital and three others on
     December 19, 1997, and the court granted the Commission's motions for entry
     of a temporary restraining order, an order freezing the assets of the all
     defendants, and later a preliminary injunction.  Named as defendants, in
     addition to Capital and its president Wayne Notwell, are The Somerset
     Group, Inc. ("Somerset") and its president Clealon Mann ("Mann").    

          Capital began raising funds from investors in 1996 in order to conduct
     oil and gas drilling operations in Kansas and California.  Capital has
     raised nearly $24 million from at least 600 investors in several states
     through sales of three-year notes offering an annual "guaranteed" return of
     20%.  Investors were solicited through a network of sales agents directed
     by Mann and Somerset.  

          The Commission alleges in its complaint that the defendants conducted
     a Ponzi scheme in which the source of interest payments to current
     investors was new investor funds received from the ongoing sale of
     Capital's notes.  While Capital claimed to be operating more than 225 oil
     wells in Kansas and California, it failed to disclose that the income from
     the wells is insufficient to pay investors their returns.  Instead, the
     defendants paid interest wholly from new investor proceeds, as Capital has
     not generated sufficient cash flow from its operations to pay interest.

          The Commission also alleges that the offering materials used in the
     sales of Capital's notes failed to disclose material information.  For
     example, the materials failed to disclose that sales agents were receiving
     excessive commissions, totaling approximately 46% of each dollar invested
     in the notes.  In addition, the offering materials failed to disclose that
     Capital withheld 20% of the proceeds for payment to New England
     International Surety, Inc., a Panamanian company which is the purported
     guarantor on the notes.  Further, the materials failed to disclose that
     Capital, the issuer of the notes, had no control over the funds being
     raised by sales agents.  Instead, all investor funds were pooled in a
     single account controlled by Mann from which he disbursed monthly interest
     payments to investors, commission payments to sales agents and expenses
     associated with Capital's business operations.  Finally, the materials fail

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     to disclose that Capital, Mann and Somerset were ordered to cease and
     desist the solicitation of investors for oil and gas investments in the
     state of Kansas and other states.

          The March 12, 1998 order signed by Judge Sam also authorizes the
     Special Agent to attend Capital's board meetings, have full access to
     Capital's books and records, and to evaluate Capital's oil and gas holdings
     and supervise the expenditure of funds by Capital and other related
     companies.  












































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