==========================================START OF PAGE 1======

         UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Securities Exchange Act of 1934
Release No. 36835 / February 13, 1996

Accounting and Auditing Enforcement 
Release No.  759 / February 13, 1996

Administrative File No. 3-8944             

IN THE MATTER OF RUSSELL PONCE

     The Commission issued an Order pursuant to Section 21C of
     the Exchange Act instituting a public administrative
     proceeding against Russell Ponce (Ponce) to determine
     whether Ponce violated and/or caused violations of the
     antifraud, reporting, books and records and internal control
     provisions of the Exchange Act.  The Order further
     institutes proceedings against Ponce pursuant to Rule 102(e)
     of the Commission's Rules of Practice.

     The Order alleges that Ponce caused American Aircraft Corp.
     (AAC), in its Form 10-Q and Form 10-K filings with the
     Commission for the second quarter of its fiscal 1988 through
     the end of its fiscal 1991, to improperly report designs as
     assets valued at $4,687,500 before amortization.  As
     reported, these designs represented at least 50% of AAC's
     total assets in each filing.  In fact, AAC should not have
     reported the designs at all or should have reported the
     designs as having a zero dollar value.  The Order also
     alleges that Ponce caused AAC to capitalize certain R&D
     costs as tooling and inventory assets despite GAAP
     requirements that these costs be expensed as incurred.  The
     Order further alleges that Ponce engaged in improper
     professional conduct during his audits of AAC's financial
     statements for fiscal years 1988 through 1991.  Included in
     the Order are allegations that Ponce was owed material
     amounts for prior years audit services, which impaired his
     independence, and that he failed to exercise due
     professional care when he evaluated the designs.  A hearing
     will be scheduled to take evidence on the staff's
     allegations and to afford Ponce an opportunity to present
     any defenses thereto.