COMMISSION FILES EMERGENCY ACTION IN FEDERAL DISTRICT COURT TO SHUT DOWN $150 MILLION PYRAMID SCHEME

On March 17, 1998,
Judge Story of the United States District Court for the Northern
District of Georgia issued a temporary restraining order against
a North Carolina company and three of its principals preventing
violations of the federal securities laws in connection with
their operation of  an alleged pyramid scheme that since April
1995, raised $150 million from over 150,000 investors.   The
court also appointed a receiver for the company and froze its
assets.  William McLucas, Director of the SEC’s Division of
Enforcement noted that in terms of  dollars,  this is one of the
biggest pyramid schemes the SEC has ever seen.

     The Commission’s complaint, filed on March 16, 1998, alleged
that International Heritage, Inc.  (“IHI”) and its parent
company, International Heritage Incorporated, formerly known as
Kara International Inc. (“Kara”), Stanley H. Van Etten (“Van
Etten”), founder, chairman of the board of directors, president
and chief executive officer of IHI and chairman and CEO of
Heritage Incorporated; Claude W. Savage (“Savage”), a founder and
director of IHI and a director of Heritage Incorporated;  and
Larry W. Smith (“Smith), a founder and director of IHI and a
director of Heritage Incorporated violated the antifraud
provisions of the federal securities laws  by knowingly
misrepresenting IHI’s financial condition to investors and
concealing the fact that IHI was operating  a pyramid scheme,
failing to disclose that IHI had violated the North Carolina
Pyramid Schemes Act and misrepresenting Van Etten’s background.

     Last week, IHI’s market capitalization soared from $330
million to $1.2 billion.  On March 13, 1998, the Commission
suspended trading in IHI’s securities stating that there were
questions regarding the return investors could expect to receive
on their investment, the regulatory background of the company and
the background of its president.   McLucas stated,
" The fact that we are experiencing a bull market does not
necessarily mean that  all investment choices are good choices.
Investors should continue to be cautious when making
investments.”

     IHI promoted the pyramid scheme on its Home Page on the
World Wide Web and was also the subject of discussion on the
Internet.  Investors are 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 <www.sec.gov>:

Investment Fraud and Abuse Travel to Cyberspace -
http://www.sec.gov/consumer/cyberfr.htm

     Investors are encouraged to report suspicious Internet
offerings (or other suspicious offerings) via e-mail to
<enforcement@sec.gov>.  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 Home Page:

http://www.sec.gov/enforce/comctr.htm

Investors can also mail a report to the SEC’s Enforcement Complaint
Center, Mail Stop 8-4, 450 Fifth Street, Washington, D.C. 20549.