SECURITIES AND EXCHANGE COMMISSION


     Litigation Release No. 15498 / September 17, 1997

     Securities and Exchange Commission v. MicroWest Industries, Inc. et al.,
     Civil Action No. SACV-97-748 LHM (ANx) (C.D.Cal.)

          The Securities and Exchange Commission announced that today it sued
     MicroWest Industries, Inc. of Irvine, California and its affiliates,
     principals and sales agents for fraud and failure to register as broker-
     dealers.  The Commission filed the complaint in federal district court in
     Los Angeles.  The complaint alleges that from June 1993 through May 1996,
     the Defendants raised over $4.25 million from over 190 investors
     nationwide.  The Defendants told investors that their money would be used
     to manufacture and market computer equipment designed to capture and
     transmit medical images, to purchase computer hardware and computer chip
     manufacturing equipment, and for working capital.  The Commission alleges
     that only a small portion of investor funds were used to purchase computer
     equipment and that most funds were used to: (1) pay "returns" to earlier
     investors in a "Ponzi" scheme, (2) pay the expenses of a related company,
     (3) make loans to related companies, (4) purchase an interest in an
     unrelated company, (5) pay personal expenses, and (6) pay commissions to
     sales agents.

          The Commission sued Microwest Industries, Inc., MicroWest
     Microsystems, Inc. (Irvine), and MicroWest Income Fund (Las Vegas, Nevada)
     for violations of the securities registration provisions of Sections 5(a)
     and 5(c) of the Securities Act of 1933 and the antifraud provisions 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 Commission
     sued Steven P. Hevell (Newport Beach, California), chairman of MicroWest
     Industries and president and CEO of MicroWest Microsystems, and Ellsworth
     L. Brouillette (Scottsdale, Arizona), vice-president of MicroWest
     Industries, for violations of the registration provisions of Sections 5(a)
     and 5(c), the antifraud provisions of Section 17(a) and Section 10(b) and
     Rule 10b-5, and the broker-dealer registration provisions of Section
     15(a)(1) of the Securities Exchange Act of 1934.  In addition, the
     Commission sued Joseph G. Obey (Irvine), CEO and president of MicroWest
     Industries, and Allan T. Matzat (Mission Viejo, California), CFO of
     MicroWest Industries, for violations of the registration provisions of
     Sections 5(a) and 5(c) and the antifraud provisions of Section 10(b) and
     Rule 10b-5.  Finally, the Commission sued former MicroWest Industries sales
     agents Neal C. Harper (Scottsdale), Dwight H. Stephens (Scottsdale), Jim D.
     James (Fountain Valley, California), Blake T. Ward (Laguna Hills,
     California), Thomas J. Perkins (Castro Valley, California), and Anthony F.
     Moss (Costa Mesa, California) for violations of the broker-dealer
     registration provisions of Section 15(a)(1).





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