U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 15651 / February 24 , 1998 SECURITIES AND EXCHANGE COMMISSION v. DAVID A. COLVIN; INTELLINET PUBLISHING, INC.; INTELLINET HOLDING GROUP, INC.; MEDICAL ADVANTAGE, INC.; LAMELLI, INC., a/k/a LAMELLI MEDICAL TECHNOLOGY, INC.; WALL STREET RESEARCH COMPANY, INC.; JOB KJELL HOVIK; LAMAR ELLIS; and JOHN LARSON, a/k/a JOHN ST. JOHN, Civil Action No. SACV 98-135 AHS (EEx) (C.D. Cal.) On February 20, 1998, the Securities and Exchange Commission filed an emergency lawsuit shutting down a Southern California boiler room which was deceiving investors into believing that former U.S. Surgeon General C. Everett Koop and NBC television journalist Tom Brokaw had endorsed one of the defendants companies. The scheme, which has bilked investors out of more than $5 million since January 1997, employed high pressure telemarketing sales techniques and used Dr. Koop s likeness and quotations on an Internet website to fraudulently sell securities. The individual defendants, David A. Colvin, 54, of Chatsworth, California, Job Kjell Hovik, of Carlsbad, California, Lamar Ellis, of Pomona, California and John Larson (a/k/a John St. John) of Los Angeles, California, used a Canoga Park boiler room, Intellinet Publishing, Inc., to sell securities in an obesity clinic company, Medical Advantage, Inc. and an alcohol and drug detoxification company, Lamelli, Inc. Another firm, Wall Street Research Company, Inc., which purports to do investment research, issued fraudulent buy recommendations for Medical Advantage. In its lawsuit, the Commission alleges that the defendants falsely claimed that Dr. Koop and Mr. Brokaw were affiliated with the Medical Advantage obesity clinics and that Mr. Brokaw would be the company s infomercial spokesperson. The Commission further alleges that investors were falsely promised the return of their principal investment, plus 12% interest, in 120 to 180 days. Instead, Colvin, who masterminded the scheme, misappropriated investor funds, using most of the money for boiler room expenses and for his other business ventures. Among the other misrepresentations alleged, the defendants falsely claimed that Medical Advantage and Lamelli would become public companies in 120 to 180 days. The defendants further claimed that Lamelli had built and leased 250 detoxification units and expected $37 million in revenues in the first quarter of 1998. In fact, Medical Advantage and Lamelli are not public companies. Further, Lamelli does not have any completed detoxification units or lease agreements and has yet to generate any revenue. In addition, Colvin concealed his ownership of Wall Street Research and deceived investors into believing that its buy recommendations for Medical Advantage were the result of independent and impartial investment research. In the lawsuit, which was filed in the United States District Court for the Central District of California, the Commission obtained an order freezing the assets of the defendants, appointing a receiver to preserve ======END OF PAGE 1====== investor assets and temporarily enjoining the defendants from future violations of Section 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission also seeks preliminary and permanent injunctions, and other relief, including disgorgement and civil penalties against the defendants. ======END OF PAGE 2======