UNITED STATES SECURITIES AND EXCHANGE COMMISSION

  LITIGATION RELEASE NO. 15649 / February 20, 1998

  SECURITIES AND EXCHANGE COMMISSION v. Daniel E. Schneider, et al., et.  al., Civil Action No. 98-CV-0014-D (USDC Wyo.)

  The Commission announced today that the U.S. District Court for the  District of Wyoming, issued a preliminary injunction in a pending action  involving the illegal sale of bonds, purportedly backed by gold, issued in  the 19th century by the now defunct Chicago, Saginaw and Canada Railroad  Co. (Saginaw). The order continues the Court s temporary restraining order  entered on January 20, 1998. The order also prohibits the fraudulent sale  of interests in a prime bank-type trading program. Following an  evidentiary hearing on January 29, 1998, Judge William F. Downes entered  the preliminary injunction on Friday, February 13, 1998, against Daniel E.  Schneider (Schneider), a resident of Worland, Wyoming, and related entities  Global American Prosperity Foundation (GAPF) and Financial Acquisition  Sovereign Trust (FAST). The order also freezes assets held by Schneider,  GAPF and FAST.

  In a written opinion, the Court concluded that the bonds are worthless  as investments, having value only as historical memorabilia, and that the  prime bank trading scheme touted by Schneider is fictitious. The Court  concluded that the Commission established a prima case that, Schneider,  GAPF and FAST, through their false and misleading statements, violated the  antifraud provisions, Section 17(a) of the Securities Act of 1933 and  Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5  thereunder. The Commission’s complaint alleged that during 1997,  Schneider, GAPF and FAST raised a total of at least $2 million from six,  and possibly more than 30, investors nationwide through the sale of Saginaw  bonds and through a bank debenture trading program in which the Saginaw  bonds or other assets purportedly could be used to generate substantial  returns.

  In the preliminary injunction, Judge Downes continued the terms of the  previously issued temporary restraining order as to all of the named relief  defendants, including California residents Norman Fadel (Fadel) and Gordon  A. Dunlop (Dunlop), Utah resident Ken Karlson (Karlson), and First  Consortium International, located in California. The Commission s  Complaint alleged that Fadel and Karlson received approximately $96,000 and  $354,000, respectively, from Schneider, GAPF and FAST in connection with  Schneider s solicitation of the worthless railroad bonds, and that Dunlop  and First Consortium hold $1.2 million of investor funds Schneider  collected in connection with the fictitious bank trading program.