Pinnfund USA, Inc., Peregrine Funding, Inc., Allied Capital Partners, Grafton Partners, Six Sigma, LLC a/k/a Sigma, LLC, reliance holdings, LLC, Michael J. Fanghella, James L. Hillman, and Kelly Cook a/k/a Kelly Jaye a/k/a Kelly Spagnola

Litigation Release No. 17321 / January 16, 2002

SECURITIES AND EXCHANGE COMMISSION V. PINNFUND USA, INC., PEREGRINE FUNDING, INC., ALLIED CAPITAL PARTNERS, GRAFTON PARTNERS, SIX SIGMA, LLC A/K/A 6 SIGMA, LLC, RELIANCE HOLDINGS, LLC, MICHAEL J. FANGHELLA, JAMES L. HILLMAN, and KELLY COOK A/K/A KELLY JAYE A/K/A KELLY SPAGNOLA, Civil Action No. 01-CV-0496 H (LAB) (S.D. Cal.)

The Securities and Exchange Commission ("Commission") today announced that final judgment has been entered against defendant James L. Hillman, a resident of Oakland, California, in SEC v. PinnFund USA, Inc., et al. Hillman is a defendant in a multi-million dollar offering fraud filed by the Commission last year. The final judgment permanently enjoins Hillman from committing any future violations of the registration and antifraud provisions of the federal securities laws, specifically 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. Hillman consented to the final judgment without admitting or denying liability. Hillman also consented to pay disgorgement of $67,749,192.39 and $110,000 in civil penalties. The final judgment was entered by the Honorable Marilyn L. Huff of the U.S. District Court for the Southern District of California on December 19, 2001.

Judge Huff also approved a separate settlement agreement among Hillman, Charles LaBella, the court-appointed receiver for PinnFund USA, Inc. and Richard Kipperman, the bankruptcy trustee of several entities that Hillman controlled. The settlement agreement requires Hillman to turn over as much as $57 million in cash, assets and potential tax refunds and to cooperate with Mr. LaBella and Mr. Kipperman in liquidating Hillman's assets and pursuing legal claims against third parties. Hillman's full performance of the terms and conditions of the settlement agreement will be deemed to satisfy the disgorgement portion of the final judgment.

The Commission filed its complaint on March 21, 2001, alleging that Hillman raised $330 million of investor proceeds through his control of Peregrine Funding, Inc. and by selling unregistered securities in Allied Capital Partners, Grafton Partners and Six Sigma, LLC. The Commission's complaint further alleged that Hillman and the other defendants misused the proceeds for their own purposes, to pay for operational losses of defendant PinnFund USA, Inc., and to make repayments to investors as part of a Ponzi-like scheme.