EMBARGOED UNTIL 10:30 A.M., APRIL 30, 1991


                VICTIMS OF OIL AND GAS LEASE SCAM
                 TO GET BACK NEARLY FULL REFUNDS
  FOLLOWING $47 MILLION IN SETTLEMENTS OF FTC AND RELATED CASES


     Consumers victimized by an oil and gas lease telemarketing
scheme that bilked investors out of more than $51 million in the
early 1980s will get back more than 90 cents on the dollar in
largest telemarketing fraud settlement ever announced by the
Federal Trade Commission, the agency and the court-appointed
receiver in the case said today.
     Approximately $47 million is available for distribution to
8,230 consumers who lost between $5,000 and $10,000 each in the
scheme.  Settlements were negotiated with more than a dozen
defendants in the case, and include more than $30 million from
attorneys, accountants, banks, and insurance companies charged
with knowingly helping to perpetrate the fraud.  These defendants
have agreed to the settlements to avoid going to trial.

     Notices to consumers eligible for refunds will go out this
week, and the checks are expected to be distributed this summer.

     "Today's announcement sends an important message to those 
in the financial, legal, and accounting communities who may be
tempted by the profits of knowingly aiding and abetting a fraud,"
said FTC Chairman Janet D. Steiger in announcing the refunds.  
"This case demonstrates the Commission's willingness to take an
enforcement action beyond the primary perpetrators of a known
fraud, and go after the infrastructure supporting that fraud as
well."

Background

     The settlements stem from a July 1983 case in which the FTC
charged three southern Florida companies -- U.S. Oil and Gas
Corporation, Eagle Oil and Gas Corporation, and The Stratford

                            - more -
U.S. Oil and Gas--04/30/91)


Company -- and ten individuals with false and deceptive sales
practices in connection with application filing services they
provided for a federal lottery.  The lottery awarded leases for
the rights to oil and gas resources on parcels of federal land. 

     According to the FTC complaint, the defendants marketed
their filing services to consumers by telephone using sales
scripts.  They charged several thousand dollars for a package of
filings, of which only a fraction was used for lottery filing
fees, the FTC said.

The Charges

     The FTC charged that the defendants falsely represented
their ability to "eliminate the risk" of participating in the
lottery.  Specifically, the complaint alleged, the defendants
misrepresented their expertise and "exclusive knowledge of
valuable parcels," the likelihood of winning a lease, the number
of customers' applications that would compete for each lease, and
the companies' prior success in helping customers win leases.  In
fact, the FTC said, from September 1982 through July 1983, the
defendants' customers filed more than 66,000 applications, but
won only 60 leases.

     The complaint also alleged that, beginning in 1982, the
defendants started falsely promising that customers would get
back their original investment after seven years whether or not
they won a lease.  According to the FTC complaint, the companies
set up a program whereby a portion of each investor's fee was
used to purchase an annuity to provide the refunds.  But, in
fact, investors were never made beneficiaries of these annuities.

     The federal district court in Miami froze $12 million of the
companies' assets, and prohibited future deceptive sales prac-
tices in October 1983.  The personal assets of the individuals
named in the case were frozen in January and March 1984.

     In November 1983, at the request of the FTC, the court
appointed Gerald B. Wald, a partner with the law firm of Murai,
Wald, Biondo & Moreno of Miami, Florida, as a receiver to take
physical control of the three companies and to safeguard their
assets, records and other possessions.  Subsequently, the court
appointed Wald and two additional counsel to represent investors
who fell into separate classes of victims.  The court then auth-
orized the receiver and additional counsel to file civil suits
against the companies and the individuals who allegedly aided and
abetted the oil and gas lease scam.  These ancillary actions were
then consolidated with the FTC action.
U.S. Oil and Gas--04/30/91)


     Among those named in the ancillary actions are:


     (1) Alexander & Alexander, a Maryland corporation with its
     home office in New York.  Alexander & Alexander is an
     insurance broker which allegedly helped the defendants
     establish, promote and administer the bogus annuity program.

     (2) Belvedere Insurance Company, Ltd., a Bermuda corpora-
     tion; Executive Life Insurance Company of California; and
     First Pyramid Life Insurance Company of America, an Arkansas
     Corporation.  These companies were alleged to have issued
     the annuities with knowledge that they were part of a scheme
     to defraud consumers.

     (3) Melvin Morgenstern and his law firm, Goldberg, Semet,
     Lickstein & Morgenstern, a Florida partnership located in
     Miami.  Morgenstern and his firm were charged with helping
     design the bogus annuity program, and also with helping
     design and implement a corporate reorganization that re-
     sulted in the alleged looting of $5 million of the corporate
     defendants' assets by Gurdon Wolfson, an individual defen-
     dant in the case.

     (4) Sadoff Rothchild & Company, P.A., a Miami-based corpora-
     tion and successor to Sadoff Rothchild Levin & Myer, a
     Florida partnership; and Spear, Safer and Company, a Miami,
     Florida professional company.  These two accounting firms
     allegedly helped the defendants establish the bogus annuity
     program and provided other accounting services essential to
     the fraud and concealing its profits.

     (5) Southeast Bank of Miami, a national banking association,
     and American Savings & Loan Association of Florida, a
     Florida savings and loan corporation.  These two financial
     institutions were charged with permitting the use of their
     names as references in the defendants' sales materials when
     they knew, or should have known, that the defendants'
     programs were fraudulent.

     (6) The Better Business Bureau of South Florida, which
     allegedly allowed itself to be used as a reference for the
     defendants, and the Council of Better Business Bureaus,
     charged with failing to adequately supervise the conduct of
     the BBB of South Florida.


U.S. Oil and Gas--04/30/91)


Sources of Settlement Funds

     The FTC settled with some of the defendants named in its own
case under consent judgments and decrees that include both broad
prohibitions on future deceptive practices and funds for consumer
redress.  Those funds have been transferred to the receiver.  On
April 26, the court approved a further settlement of $30 million
which had been negotiated by Wald with the individuals and
companies named in the ancillary actions.

     As a result of these settlements, a default judgment against
defendant Gurdon Wolfson (a principal of U.S. Oil and Gas), and
other funds in the receiver's possession, approximately $47
million is now available to make refunds to consumers who fell
victim to the scheme.

     A partial summary of the settlement amounts is attached. 
Copies of the original complaint in this matter are available
from the FTC's Public Reference Branch, Room 130, 6th Street and
Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222;
TTY 202-326-2502.

NOTE:  The final judgment containing the agreements to pay funds
for consumer redress are for settlement purposes only, and do not
constitute admissions of law violations.  They have the force of
law when approved by the court.

                              # # #

MEDIA CONTACT:      Bonnie Jansen, Office of Public Affairs
                    202-326-2161

STAFF CONTACT:      Michael McCarey, Division of Service Industry
                    Practices, 202-326-3303

(FTC File No. 812 3232)
(USOil)

USOIL--04/30/91)

              PARTIAL SUMMARY OF SETTLEMENT AMOUNTS

--    500,000  Belvedere Insurance Company, Ltd.;

--    300,000  Executive Life Insurance Company;

--    125,000  First Pyramid Life Insurance Company of America;

--    500,000  Pinnacle Reinsurance Company, Ltd., a Bermuda
               corporation;

--    300,000  American Savings and Loan Association of Florida;

--    500,000  Southeast Bank, N.A.;

--     75,000  Bayshore Bank of Florida;

--    600,000  Wolfson & Diamond, P.A.; J. Leonard Diamond; and
               Richard S. Wolfson;

--  8,500,000  Alexander & Alexander, Inc.;

--     50,000  Ed Harris; Cambridge Insurance Agency, Inc.; and
               Ossip-Harris Insurance, Inc.;

--  6,000,000  Sadoff, Rothchild & Company, P.A.; Milton Sadoff;
               Stuart Rothchild; Mortin Levin; Richard Myers; and
               Nolan Kravit;

-- 6,570,000   Goldberg, Semet, Lickstein & Morgenstern; and
               Melvin Morgenstern;

-- $4,500,000  Better Business Bureau of South Florida, Inc. and
               the Council of Better Business Bureaus, Inc.; and

-- $   27,500  the estate of Bernard Striar.


     The following settlements were with individual salesmen
named in the case:

--     10,000  Suzanne Goldstein;

--     10,000  Adele Aronow;

--      1,500  Steve Aronow;

--      2,000  Eric Swerdlow;

--    115,000  Irving Sand; and

--    225,000  Milton Sand.