Litigation Release No. 16267 / August 30, 1999

SEC v. AMTEL COMMUNICATIONS, INC., et al., No. 951127 JM (AJB) (S.D. Cal.)

Judgment Entered Against Randall Kuhlmann, Principal in Pay Telephone Fraud

The Securities and Exchange Commission announced that on August 12, 1999, United States District Judge Jeffrey T. Miller entered judgment against Randall Kuhlmann, enjoining him from future violations of the fraud provisions of the federal securities laws.

The case involved Kuhlmann's activities at Amtel Communications, Inc., based in San Diego, California. The Commission alleged that Amtel, Kuhlmann, and David Darling raised $51.4 million from investors in a fraudulent scheme involving privately owned pay telephones. The Commission alleged that the operation was a Ponzi scheme, whereby investors were paid returns from new investor money.

After the Commission filed its lawsuit in 1995, Amtel sought protection from creditors in the Bankruptcy Court. Subsequently, Kuhlmann and Darling were indicted by a federal grand jury and pleaded guilty to mail fraud, wire fraud and other violations of federal law. Each is currently incarcerated.

Kuhlmann consented to the entry of judgment against him without admitting or denying the allegations of the Commission's complaint. The judgment enjoins Kuhlmann from future violations of Sections 5 and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a)(1) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

For further information, please see Litigation Release Nos. LR-15547, LR-14713, LR-16040, and LR-16145.