SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 16450 / February 24, 2000

UNITED STATES OF AMERICA v. PHILIP LEITNER AND NATALE MONTOZZI CRIMINAL NO. 00-0004-CR-UNGARO-BENAGES (S.D. FLA.); SECURITIES AND EXCHANGE COMMISSION V. TITAN PETROLEUM CORP., MAGNUM PETROLEUM ENTERPRISES, INC., MAGNUM OIL & PETROLEUM, INC., NATALE L. MONTOZZI AND PHILIP LEITNER CIVIL ACTION NO. 98-1111-CIV-KING (S.D. FLA.)

The Securities and Exchange Commission ("Commission") announced that on February 2 and 3, 2000, respectively, Philip Leitner ("Leitner") and Natale L. Montozzi ("Montozzi") pled guilty to one-count criminal Informations filed by the Office of the United States Attorney for the Southern District of Florida. The Informations charged them with conspiracy to commit securities fraud in connection with a fraudulent scheme that raised approximately $720,000 from approximately seventy-five investors throughout the United States and Canada. Sentencing hearings for Leitner and Montozzi have been scheduled for May 5 and 12, 2000, respectively. Each faces a statutory maximum sentence of imprisonment of 5 years, as well as a possible money penalty and restitution.

In its complaint filed on May 19, 1998, and amended on June 7, 1998, arising out of the same conduct, the Commission alleged that from April 2, 1997 through September 24, 1997, Titan Petroleum Corp. ("Titan") and its principals, Montozzi and Leitner, fraudulently raised at least $654,770 by selling undivided, fractional working interests in three separate oil and gas well drilling programs to sixty-five investors. The complaint alleged, among other things, that the Titan offering documents represented that the amount of each investment was to cover all costs for drilling and completing the particular well in which it was invested, that Titan failed to disclose to investors that the amount of money raised in each case was far in excess of the costs it knew it would incur to drill and complete the well for which the funds were raised, that investor funds were commingled and used to pay a wide variety of expenses not provided for in the offering documents, including, large undisclosed payments to related parties, that two of the wells were drilled in locations different than those described in the offering documents, and that the offering documents and telephone script contained false or misleading statements concerning the success, experience and history of the company.

The complaint also alleged that when the defendants became aware of the Commission's investigation, the business of Titan was wound down and that Magnum Petroleum Enterprises, Inc. ("Magnum Petroleum") and Magnum Oil & Petroleum, Inc. ("Magnum Oil") (collectively "Magnum") were incorporated with Montozzi as a director and president of both corporations. Using offering documents virtually identical to those used by Titan, Magnum and Montozzi offered and sold undivided, fractional interests in at least one oil and gas well drilling program. The complaint alleged, among other things, that Magnum did not hold the necessary sublease to drill in the location cited in its offering documents, that Magnum did not disclose that it was successor to Titan, that Montozzi was president of all three corporations, that all three of Titan's drilling programs had recently failed, and that Montozzi had a history of cease-and-desist orders entered against him by state authorities.

The Commission has obtained permanent injunctions, among other relief, against Leitner, Montozzi, Titan, Magnum Petroleum, and Magnum Oil, enjoining them from future violations of Section 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 previously has made several announcements concerning this matter. See Litigation Release Nos. 15764 (June 2, 1998); 16144 (May 14, 1999); 16334 (Oct. 15, 1999).