U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 15808 / July 14, 1998 SECURITIES AND EXCHANGE COMMISSION v. B.M.C. ENTERPRISES, INC., ET AL., Civil Action No. 97-4811 CAS (JGx) (C.D. Cal.). The Securities and Exchange Commission announced that on June 17, 1998, the Honorable Christina A. Snyder, United States District Judge for the Central District of California, granted the Commission's motions for summary judgment and default judgment, and entered final judgments against thirteen individual defendants and five entity defendants in this action. The Court ordered the defendants to pay over $3.2 million in civil penalties and disgorgement of their ill-gotten gains with prejudgment interest (jointly and severally as to certain individuals and entities) as follows: ------------------------------------------------ Party | Civil Disgorgement |Penalty ------------------------------------------------ ------------------------------------------------ B.M.C. Enterprises, |$1,235,434 $1,301,984 Inc. | ------------------------------------------------ Michael E. Lopuszynski | $211,410 $1,301,984 ------------------------------------------------ C. Scott Courtney | $129,066 $1,301,984 ------------------------------------------------ Madison Consulting | $627,148 $660,931 Group, Inc. | ------------------------------------------------ Jonathan Shoucair | $70,388 $660,931 ------------------------------------------------ Michael W. Engelhardt | $121,599 $709,994 ------------------------------------------------ Joseph Widmer | $55,850 $58,858 ------------------------------------------------ Livestock Financial | $119,605 $126,047 Services, Inc. | ------------------------------------------------ Kent Bollenbach | $17,800 $126,047 ------------------------------------------------ Eugene Evangelist | $21,800 $126,047 ------------------------------------------------ Brookside Management, | $165,839 $174,772 Inc. | ------------------------------------------------ Timothy Grayson | $52,500 $174,772 ------------------------------------------------ Lion's Share Ventures | $173,318 $182,654 ------------------------------------------------ Brent Morris | $31,954 $182,654 ------------------------------------------------ James Perez | $30,202 $182,654 ------------------------------------------------ Robert Haug | $143,985 $151,741 ------------------------------------------------ Ira Itskowitz | n/a $565,864 ------------------------------------------------ Marc Levine | n/a $565,864 ------------------------------------------------ The Court also entered permanent injunctions against defendants Eugene Evangelist, B.M.C. Enterprises, Inc., Madison Consulting Group, Inc., Livestock Financial Consulting, Inc., Brookside Management, Inc., and Lion's Share Ventures, prohibiting future violations of the antifraud, securities registration, and/or broker-dealer registration provisions of the federal securities laws (Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder). Ten of the defendants -- Michael E. Lopuszynski, C. Scott Courtney, Jonathan Shoucair, Michael W. Engelhardt, Joseph Widmer, Kent Bollenbach, Timothy Grayson, Brent Morris, and James Perez, and Robert Haug - - previously consented, without admitting or denying the allegations, to similar injunctions. On July 2, 1997, the Commission filed its complaint in federal district court in Los Angeles alleging fraud in the offer and sale of units in Touch Tone Partners ("Touch Tone"), a California partnership based in Canoga Park, California. Touch Tone purportedly was going to establish and operate a 900- number dating service. The Commission's complaint alleged that the defendants raised approximately $3.9 million from investors nationwide from the sale of the Touch Tone securities from August 1994 through January 1995. The complaint alleged that neither the Touch Tone securities nor any of the sales offices selling the securities were registered with the Commission. The complaint further alleged that Lopuszynski, Courtney, Shoucair, Engelhardt, and their salespeople made material misrepresentations to potential investors about the use of the Touch Tone offering proceeds and other aspects of this investment. For additional information, see Litigation Release 15400 (July 2, 1997), and Litigation Release 15704, April 13, 1998.