UNITED STATES SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 16176 / June 4, 1999

SECURITIES AND EXCHANGE COMMISSION V. REDBANK PETROLEUM, INC., AMERITECH PETROLEUM INC., LYRIC INTERNATIONAL, INC., BRENT A. WAGMAN AND MARGARET F. SWINNEY, 3:99-CV-1267-T, USDC, ND/TX (Dallas Division)

RECIDIVIST SECURITIES VIOLATOR'S NEW
OIL AND GAS AND MICROCAP SCHEMES SHUT DOWN BY SEC

On June 3, 1999, Judge Robert Maloney, United States District Judge for the Northern District of Texas, granted the Commission's request for emergency action and issued a temporary restraining order halting a fraudulent scheme devised by Brent A. Wagman ("Wagman"), a former broker and recidivist securities law violator. Since 1997, two privately held corporations under Wagman's control, Redbank Petroleum, Inc., ("Redbank") and Ameritech Petroleum, Inc., ("Ameritech") have offered and sold approximately $15 million in so-called high interest corporate notes ("corporate notes") to investors in six states. In 1998, the State of Maryland ordered Wagman to refund approximately $2 million to Maryland investors who purchased corporate notes issued by Ameritech. Subsequently, Wagman began offering and selling corporate notes issued by Redbank, and used some of the proceeds from the new offering to repay Maryland investors who had purchased the corporate notes issued by Ameritech.

According to the Commission's complaint, the corporate notes were offered to retirees and others as risk-free investments with above market rates of return, and as being backed by an unconditional guarantee by an independent insurance company. In fact, no such guarantee existed. The purported purpose of the investment was to acquire existing oil and gas properties and leases, and to fund operations for Redbank and Ameritech. Rather than using investors' monies for their stated purposes, funds were diverted to fund the operations of several other entities under Wagman's control, and for personal expenses of Wagman and his office assistant, Margaret F. Swinney ("Swinney"), who assisted Wagman in perpetrating the fraud. Wagman also used investors' funds as "Ponzi" payments to lull existing investors and to lure new ones.

One of the Wagman-controlled companies which received proceeds from the corporate note offerings was Lyric International, Inc. ("Lyric"), a microcap company whose stock is traded on the NASD Bulletin Board. Lyric, at Wagman's request, issued press releases, made Internet postings and used other promotional documents to promote its acquisition of major assets from Redbank and Ameritech. These promotions were false and misleading because they failed to disclose that the acquisitions were not arms-length transactions or that the assets had been acquired from a related entity that had been sanctioned for securities violations. While Lyric's stock was being touted, Wagman sold a significant amount of his own holdings and reaped over $380,000.

In addition to the temporary restraining order, which enjoins defendants Redbank, Ameritech, Lyric, Wagman and Swinney from violating the federal securities laws, Judge Maloney also issued orders (1) freezing the assets of the defendants and relief defendants Mary B. Wagman, Warren Donohue, Michael G. Maguire, Natural Gas Technologies, Inc., Woodman Enterprises, Inc., Wagman Petroleum, Inc., Seismic International, Inc., and Cooke Enterprises; (2) requiring the defendants and relief defendants to furnish the Commission an accounting, under oath, detailing all of their assets and all funds or other assets received from investors and one another; and (3) directing the repatriation of funds and the surrender of passports.

In its complaint, the Commission alleges that the defendants violated Sections 5(a), 5(c) and 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 seeks an order permanently enjoining the defendants from the securities registration and antifraud provisions of the federal securities laws; an order requiring disgorgement of all wrongfully obtained profits, with prejudgment interest, and civil penalties against each defendant, and the appointment of a receiver to marshal and conserve the assets of the defendants and relief defendants for the benefit of investors.

The Commission gratefully acknowledges the invaluable assistance of the Maryland Division of Securities and the Texas State Securities Board in bringing this matter to litigation. The Commission's Fort Worth office and the Texas State Securities Board have a long-standing tradition of cooperative effort in protecting the investing public.

This enforcement action is part of the Commission's four-pronged approach to minimizing Microcap fraud: enforcement, inspections, investor education and regulation. For more information about the SEC's response to Microcap fraud, visit the SEC's Microcap Fraud Information Center at http://www.sec.gov/news/extra/microcap.htm.

Investors are also advised to read the SEC's "Cyberspace" Alert before purchasing any investment promoted on the Internet. The free publication, which alerts investors to the telltale signs of online investment fraud, is available on the Investor Assistance and Complaints link of the SEC's home page on the World Wide Web . It can also be obtained from calling 800-SEC-0330.

Investors are encouraged to report suspicious Internet offerings (or other suspicious offerings) via e-mail to . A user-friendly form to assist you in making a report is available at the Enforcement Complaint Center on the Enforcement Division link of the SEC's home page . Investors can also mail a report to the Enforcement Complaint Center, Mail Stop 8-4, 450 Fifth Street, Washington, D.C. 20549.