U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 16025 / January 13, 1999 SECURITIES AND EXCHANGE COMMISSION v. INTERNET CASINO SPORTS GAMING, LLC, INTERNET CASINO SPORTS GAMING, INC., ROBERT MATIAS a/k/a ROBERT DUVALL, AND ALAN LENCHNER a/k/a ALAN LANE, Civil Action No. 98-6467 MRP (RNBx) (C.D. Cal.) The Securities and Exchange Commission ("Commission") announced that on January 6, the Honorable Mariana R. Pfaelzer of the United States District Court for the Central District of California entered Final Judgments against defendants Robert Matias ("Matias") and Alan Lenchner ("Lenchner"), both residents of Granada Hills, California. Matias, who is 35 years old, was the Chief Executive Officer, managing member and founder of Internet Casino Sports Gaming, LLC ("Internet Casino"), which is located in Sherman Oaks, California. Lenchner, who is 62 years old, was the Director of Operations and a managing member of Internet Casino. The Final Judgments permanently enjoin Matias and Lenchner from future violations of the securities registration and antifraud provisions of the federal securities laws. The Final Judgments also order Matias and Lenchner to pay disgorgement in the amount of $195,572.07 and $93,320.16, plus prejudgment interest, respectively. The Final Judgments waive Lenchner's payment of all disgorgement and interest and all but $26,800 of Matias's disgorgement and interest based upon sworn financial statements demonstrating Lenchner and Matias's inability to pay. Matias and Lenchner consented to the entry of the Final Judgments without admitting or denying the allegations in the Commission's Complaint. In its Complaint, the Commission alleged that Matias and Lenchner participated in the offer and sale of membership units in Internet Casino from April 1997 through August 1998. The interests were sold to over 150 investors nationwide, raising over $2 million. Matias and Lenchner, and sales agents acting at their direction, represented to investors that they would use investor funds to develop and operate a virtual casino website and that investors could potentially earn a 581% return. However, only about $200,000 of the over $2 million raised from investors was spent on the development and licensing of a virtual casino website. Instead, almost all of the investor funds received were used for undisclosed and undetermined expenses, including the payment of undisclosed sales commissions of 35-40% per unit to sales agents and Matias and Lenchner, undisclosed salaries and payments to Matias and Lenchner, and operating costs of the boiler room soliciting investors. The membership units were not registered with the Commission. The Final Judgments enjoin Matias and Lenchner from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder.