Release:#4111-98 (Civ 97-4443)

For Release: February 19, 1998

CALIFORNIA COURT ENTERS ORDERS OF PERMANENT INJUNCTION AGAINST
    CALIFORNIA TELEMARKETING FIRM, ITS PRESIDENT, AND TWO FIRM EMPLOYEES;
    ORDERS RESTITUTION BE PAID TO FIRM'S INVESTORS

CFTC Charged C.O.M. Consultants d/b/a Golden State Bullion and Other
    Individual Defendants with Fraud in the Sale of Illegal, Off-Exchange
    Precious Metals Futures Contracts Nationwide
    WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced
    today that on February 10, 1998, the Honorable William Matthew Byrne, Jr.
    of the U.S. District Court for the Central District of California entered
    consent orders of permanent injunction barring C.O.M. Consultants, Inc.,
    d/b/a Golden State Bullion (Golden State), of Marina del Rey,
    California; Richard David Otto, Golden State's president and owner,
    of Corona del Mar, CA; and Golden State telemarketer Bruce Michael
    Paine of Venice, CA, from soliciting new customers or customer funds in
    connection with futures trading and ordering Golden State and Otto to pay
    restitution to Golden State customers.

The court previously entered a default judgment against Golden State
    telemarketer Fred Ronald Williams of Pacific Palisades, CA, on
    December 8, 1997, which, among other things, permanently bars him from
    soliciting customers or funds in connection with futures trading and orders
    him to pay restitution to investors.

The court's orders were entered to settle a two-count injunctive
    complaint filed by the CFTC on June 18, 1997, against Golden State, Otto,
    Paine, Williams, and telemarketer Linton Samaru of Venice,
    California. The complaint alleged that the defendants had engaged in
    fraudulent telemarketing of highly-leveraged investments in platinum, gold,
    silver and palladium. (See CFTC News Release #4030-97, June 23, 1997).
    Specifically, the CFTC complaint charged that the defendants violated
    section 4(a) of the Commodity Exchange Act (CEA) by offering and
    selling illegal, off-exchange futures contracts and section 4b of the CEA
    by cheating and defrauding customers through false claims concerning the
    likelihood of profit and the risk of loss associated with investments in
    these contracts. On June 19, 1997, the court entered an ex
    parte asset freeze order which, among other things, froze the
    defendants' assets.

According to the complaint, Golden State required customers to pay cash
    for a portion of an investment in precious metal (usually 20 percent), and
    an off-shore financial institution would loan customers the balance of the
    purchase price of the metal. Golden State allegedly told customers that
    they would not receive the metal they had supposedly purchased; instead,
    the metal would be held by the off-shore financial institution. Golden
    State telemarketers allegedly claimed that their precious metals investment
    program involved little or no risk and that impending labor turmoil at
    South Africa's platinum mines would cause the price of platinum to increase
    to between $600 and $700 per ounce, providing investors with a return of
    three to four times their investments in two to three months. In fact,
    customers consistently lost the bulk of their investments, according to the
    complaint.

Redress Agent Appointed to Disburse Funds to Golden State
    Investors

Under the terms of the court's permanent injunction orders, Golden
    State, Otto, and Paine are permanently enjoined from committing further
    violations of federal commodity law and regulations, as charged. The order
    as to Golden State provides for the transfer to a Redress Agent of all the
    company's assets, now under the control of a court-appointed receiver. The
    Redress Agent is charged with disbursing those funds to Golden State
    investors. Defendant Otto has been ordered to pay to the Redress Agent a
    lump sum of $9,244.77 and an additional 25 percent of his taxable income
    during the years 1997 through 2001. Finally, the consent orders prohibit
    Golden State, Otto, and Paine from ever seeking registration with the CFTC,
    or from acting in any capacity for which registration is required or for
    which an exemption from registration exists.

Under the terms of the default judgment entered against defendant
    Williams, the court has ordered that he make restitution to investors in
    the amount of $2,459,117 and has permanently prohibited him from engaging
    in any commodity-related activity, including soliciting new customers or
    customer funds.

CFTC is Continuing Litigation Against Two of the Defendants

Lastly, the CFTC is continuing its litigation against defendants Paine
    and Linton Samaru. As to defendant Paine, the only issue that remains is
    the award of a monetary judgment. As to defendant Linton Samaru, the CFTC
    is seeking permanent civil injunctive and other remedial relief, including
    restitution to allegedly defrauded investors.