NEWSOctober 25, 1995

           FCC WARNING: BEWARE OF FRAUDULENT INVESTMENT SCHEMES

     Washington, DC - The Federal Communications Commission (FCC) is warning consumers to
beware of fraudulent wireless license investment schemes.  

     "Companies offering investment 'opportunities' seem to come out of the woodwork whenever
the FCC has a wireless service to license," said Gordon Coffman of the FCC's Wireless
Telecommunications Bureau.  Because of the number of auctions for licenses to provide wireless
services in the coming months, the FCC, along with the Securities and Exchange Commission and the
Federal Trade Commission, is  embarking on an aggressive anti-fraud campaign.  The FCC is putting
fraud warnings on many of its public information materials, and Coffman has been named Co-Chair
the FCC's new Anti-Fraud Task Force.

     "In recent years, unscrupulous promoters have paraded examples of people who purportedly
made 'millions' in early cellular radio investments as proof positive that the same opportunity exists
now in wireless cable, Interactive Video and Data Service, or Personal Communications Services. 
Although one can hope that is true, it does not follow that any particular promoter has the business
plan that will bring about the desired result," said Coffman.  

     In fact, there have been reports of thousands of individuals who have lost all of the money
they invested in such ventures.

     People taken in by fraudulent investment schemes are led to believe that the FCC auctions of
airwaves licenses are a guaranteed profit.  But, according to Coffman, "Many of the so-called
companies that persuade unknowing victims to invest in the FCC's auctions don't care if they win or
lose a license."

     And the FCC offers no guarantees.  "The licenses the FCC offers in auctions are licenses to
compete; there is no guarantee that a bidder will win a license at one of our auctions," said FCC
Wireless Telecommunications Bureau Chief Regina Keeney.

     Fraudulent investment companies generally target senior citizens and those least able to
properly evaluate investment options. They make initial contact with potential investors through cold
calls, television or radio advertisements or infommercials.  The caller or the ads encourage interested
investors to respond by calling a toll-free telephone number.  After responding, they are then
subjected to a high pressure sales pitch.  The sales pitch is often accompanied by slick promotional
packets that lend an air of legitimacy to the investment scheme.       

     After convincing investors, the fraud perpetrators set up general partnerships, limited
partnerships, or limited liability corporations made up solely of their victims - investors who are told           
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they'll be bidding in an FCC auction for licenses to provide wireless telecommunications services.  
Because the perpetrators are not partners in the applicant company, they avoid FCC jurisidiction. 
The perpetrators are also careful not to emphasize that most of the money invested- sometimes up to
80% - goes to "administrative costs," leaving as little as 20% left to bid in the auction.

     Coffman says that even if the partnership does win the license, it may not have sufficient
capital to construct or operate the wireless service.  

     The FCC urges consumers with questions about upcoming auctions to call the FCC's auction
hotline at (202) 418-1400.  Inquiries or complaints about specific deceptive telemarketing investment
schemes should be directed to your local state Commission on Corporations or to the National Fraud
Information Center at 1-800-876-7060.

     - FCC -

News Media contact: Stacey Reuben Mesa at (202) 418-0654
Wireless Telecommunications Bureau contact: Gordon Coffman at (202) 418-0569.