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SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 14684 / October 11, 1995


United States v. Stafford Y.L. Mew, Rodney H.S. Kim, Morreon B.
Rude, and Jack M.K. Gonzales and Charles E. Andrews, CR 9405246
FDB (W.D. WA.)

The Securities and Exchange Commission ("Commission") and the
United States Attorney for the Western District of Washington, 
Katrina Pflaumer, announced that on July 9, 1995, Judge Franklin
D. Burgess, United States District Judge for the Western District
of Washington at Tacoma, Washington, sentenced defendants
Stafford Y.L. Mew, Morreon B. Rude, Jack M.K. Gonzales, Rodney
H.S. Kim and Charles E. Andrews to various terms in prison in
connection with a prime-bank fraud scheme.  Mew and Rude are
residents of Washington.  Gonzales and Kim are attorneys admitted
to practice law in the State of Hawaii.  Kim is a resident of Las
Vegas, Nevada.  Andrews is a resident of Chicago, Illinios.

The Superseding Indictment charged the defendants with five
counts of wire fraud, in violation of Title 18, U.S.C. Section
1343; five counts of money laundering, in violation of Title 18,
U.S.C. Section 1956 (a)(2)(A) and Section 2; one count of money
laundering, in violation of Title 18, U.S.C. Section 1956
(a)(1)(1)(i); and one count of conspiracy, in violation of Title
18, U.S.C., Section 371.

The Commission previously filed a civil complaint against North
Pacific Investments, Inc., Mew and Rude alleging violations of
the antifraud provisions of the federal securities laws relating
to the same investment scheme.  The civil proceeding was stayed
pending the criminal trial.  Both the Superseding Indictment and
the civil complaint alleged that the defendants raised at least
$10 million from a non-profit Hawaiian corporation, Unity House,
which provided benefits to current and retired members of an
employees union.  The defendants solicited investments from
individuals and organizations by promising investors that they
could earn substantial profits on their investments through a
prime bank note program in which investments allegedly were
pooled together to purchase and sell prime bank notes.  Instead
of investing the funds as promised, the defendants conducted a
"ponzi" scheme in which a portion of the funds from Unity House
were used to pay the promised returns and interest of this and
other investors, thereby decreasing the principal amount of the
investment.  Portions of the invested funds were used for the
defendants' personal benefit.

The defendants were ordered to pay, jointly and severally, $10
million in restitution (of which approximately $4,000,000 has
been collected).  Mew was sentenced to 236 months in prison. 
Rude was sentenced to 135 months in prison. Kim was sentenced to
189 months in prison.  Andrews was sentenced to 30 months in
prison.  All of the defendants received three year terms of
probation.  All of the defendants, except Andrews, were
restricted from employment as a financial, investment and
brokerage company employees or consultants during the three year
period of their probations.  

For further information see Litigation Release Nos. 13887, 14011,
14035, 14064, 14121 and 14502.