FOR IMMEDIATE RELEASE                                          AT
THURSDAY, SEPTEMBER 28, 1995                       (202) 616-2771
                                               TDD (202) 514-1888

  CALIFORNIA SECURITIES BROKER CHARGED WITH SECURITIES AND WIRE
   FRAUD FOR COLLUSIVE BIDDING ON MUNICIPAL BOND RESTRUCTURING

     WASHINGTON, D.C. -- In the first prosecution of its kind,
the Justice Department's Antitrust Division today brought
criminal securities fraud charges against a California securities
brokerage firm for using fictitious noncompetitive bids and other
misrepresentations during the restructuring of a Tampa, Florida,
municipal bond escrow account.
     The criminal securities fraud charge, along with a wire
fraud charge, were filed in U.S. District Court in San Francisco
against Municipal Government Investment Associates Inc., a San
Francisco brokerage firm.
     In a two-count criminal case, the government accused the
firm of submitting false and collusive bids and bid certification
letters during the city's sale of forward supply contracts.  A
forward supply contract is a specialized securities investment in
which the purchaser buys the right to invest the proceeds of U.S.
Treasury notes as they mature in the city's escrow accounts.  
     When a city or other governmental entity refinances debt,
such as tax-exempt bonds issued to build water treatment plants
or jails, it is required to create an escrow account which
contains U.S. Treasury securities purchased with the proceeds
raised by issuing new, lower interest rate municipal bonds.  The
escrow account is used to continue to pay off the principal and
interest on the original bonds as those payments become due.  
     In this case, Municipal Government Investment Associates,
Inc. assisted Tampa in restructuring more than $138 million in
municipal bonds between September 1992 and April 1994 and
allegedly misrepresented to city representatives that the bidding
for the forward supply contracts was independent and competitive.
     "Contrary to its misrepresentations, Municipal Government
Investment Associates and its co-conspirators created and
arranged collusive, false and inaccurate bids," said Anne K.
Bingaman, Assistant Attorney General in charge of the Antitrust
Division.  She said the firm fraudulently failed to disclose
profits of more than $1.2 million it made from the sale of the
contracts.
     Bingaman also said the Antitrust Division is committed to
using all appropriate legal resources to combat collusion and
other manipulations in any bidding process no matter how complex
the industry.
     Bingaman said the charges resulted from an ongoing federal
grand jury investigation into collusive bidding and fraud in the
municipal bond escrow restructuring business.  The investigation,
which is being conducted by the Antitrust Division's San
Francisco Field Office with the assistance of the Federal Bureau
of Investigation's offices in San Francisco and Salt Lake City,
Utah, and the U.S. Securities and Exchange Commission, will
continue. 
     The maximum penalty for a corporation convicted of a
violation of the securities fraud statute is a fine of $2.5
million, twice the pecuniary gain the corporation derived from
the crime, or twice the pecuniary loss suffered by the victims of
the crime, whichever is greatest.
     The maximum penalty for a corporation convicted of violating
the wire fraud statute is a fine of $1 million, twice the
pecuniary gain the corporation derived from the crime, or twice
the pecuniary loss suffered by the victims of the crime,
whichever is greatest. 
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