U.S. SECURITIES AND EXCHANGE COMMISSION


          Litigation Release No. 15720 / April 23, 1998

          SECURITIES AND EXCHANGE COMMISSION v. DIRECT PARTICIPATION
          SERVICES, INC. dba GOVERNMENT FINANCIAL, JEFFREY A. LOBEL, WILLIAM
          ROSSI, UNITED AVALON GROUP, LTD. and FRANK M. NAFT,
          Civil Action No. 96-6594 LGB (Mcx) (C.D. Cal.)

               The Commission announced that on April 14, 1998, the
          Honorable Lourdes G. Baird, United States District Court Judge
          for the Central District of California, signed a judgment which
          permanently enjoined Jeffrey A. Lobel ("Lobel") from future
          violations of Sections 5(a) and 5(c) of the Securities Act of
          1933 (the "Securities Act"), the registration provisions, and
          Section 17(a) of the Securities Act and Section 10(b) of the
          Securities Exchange Act of 1934, (the "Exchange Act"), and Rule
          10b-5 thereunder, the anti-fraud provisions.  The Complaint
          alleged that from approximately July 1, 1993 to May 15, 1995,
          Lobel and others fraudulently offered and sold nine-month
          promissory notes ("Notes") issued by Direct Participation
          Services, Inc. d/b/a Government Financial ("GF"), raising about
          $26 million from approximately 750 investors.

               The Complaint alleged that approximately $3.4 million of
          investor proceeds were used for undisclosed purposes, primarily
          to promote and finance personal business interests of Lobel and
          others.  The Complaint further alleged that Lobel and others
          deceived investors into believing that GF would only purchase
          accounts receivable which were owed by government agencies or
          insured by an A+ rated insurance carrier.  In fact, according to
          the Complaint, GF grossly overstated the extent of government
          receivables purchased and failed to obtain the promised
          insurance.

               GF's offering materials additionally provided that a trustee
          would hold all loan portfolio documents, receive assignments of
          all assets purchased by GF, receive all payments from GF's
          account debtors, and enforce the Noteholders' security interest
          in purchased accounts receivable.  However, the Complaint alleged
          that the trustee failed to discharge these duties.  Instead, the
          Complaint alleged that the trustee operated as a mere disbursing
          agent, with Lobel's knowledge.  As a result of the above-
          described failure to operate GF in the manner represented, the
          Note program evolved into a ponzi-like scheme since, according to
          the Complaint, investors were repaid using funds of subsequent
          investors.

               In addition, the Complaint alleged that, at the time the Notes
          were offered and sold, no registration statement covering the Notes
          had been filed or was in effect.  Instead, the Notes were sold in
          purported reliance upon the registration exemption set forth in
          Section 3(a)(3) of the Securities Act.  That exemption was
          unavailable, however, because the Notes were:  (1) not prime quality
          negotiable commercial paper; (2) offered and sold to the general
          public; and (3) not issued to facilitate well recognized types of
          current operational business requirements.

               In a related action, the Commission issued an Order on April
          22, 1998, instituting administrative proceedings against Lobel.
          Lobel simultaneously consented to the entry of the Order barring
          him from association with any broker, dealer, municipal
          securities dealer, investment adviser or investment company, with
          the right to reapply, after a period of five years.