SEC INVESTIGATES Camelot/DIGIPHONE

[an52...@anon.penet.fi]

"THE BLACK KNIGHT OF CAMELOT"

HIGH-FLYING DANNY WETTREICH HAS

SHUT DOWN COMPANIES, DESTROYED JOBS,

AND DRAWN THE SCRUTINY OF TWO FEDERAL AGENCIES,

BUT HE SAYS IT'S WHAT THE STOCK

MARKET THINKS OF HIM THAT COUNTS.

BY MIRIAM ROZEN

THE DALLAS OBSERVER

Danny Wettreich, a 44 year old native of London, England,
personifies precisely what many find repugnant about
American capitalism.

In the 13 years since he moved to Dallas, Wettreich has bought
and shut down businesses. shuffled millions of dollars in secur
ties, drawn suspicion from two federal agencies, and thrown many
people out of work.

"He's the most ruthless businessman I've ever met," says Lila
Gill, a private investigator who researched Wettreich's past for
Golden Triangle Royalty & Oil, a publicly traded Texas company
that Wettreich once threatened with a hostile takeover.

A former motorcycle-parts dealer. Wettreich now runs Camelot
Corporation, a publicly traded holding company riding the
internet tidal wave. He dismisses the lawsuits, angry partners,
and jobless Americans he has left behind. It's not his history of
closing businesses that matters, scolds Wettreich it's the value
of shares in Camelot today. One can sum up his credo like this,

~It's the stock price. stupid!~

Wettreich's philosophy is evident in the framed trophies in the
windowless conference room at his company's far Nonli Dallas
headquarters, four small newspaper clippings from the business
section of The Dallas Morning News. The stories chronicle the
glorious four day period in late August when Camelot's stock
became the second-most active on the U.S. composite trading
index, soaring from $1.97 to $7.03 per share.

The recent slump in high-tech stocks has knocked Camelot
back down to $2.75, but that's still impressive for a company
that has recorded three straight unprofitable years. It's also multiplied
the value of the Wettreich family's beneficially
controlled stock holdings to a heady $20.7 million.

None of it has happened by accident. Wettreich has boosted his
company's market value by tirelessly touting its showcase prod-
uct, a computer-software program called Digiphone.

Digiphone is designed to allow Internet users to talk to each
other long-distance for only the cost of Internet service. The
software wasn't even available for sale until September, but during the
months before its release, Wettreich had helped promote it among penny-stock
mavens through the computer online service Prodigy as well as on a World
Wide Web site.

In Dallas, Wettreich conducted dog-and-pony shows through-
out 1995 for the financial press and potential Investors.
Interest mounted with the news also touted by Wettreich that a member of the
legendary Hunt clan, H.L. Hunt grandson Clark Hunt,
participated in a $1.2 million private placement of Camelot
stock.

Camelot hit it really big that week last August because CNBC
financial tipman Dan Dorfman, recently sullied by reports of a federal probe
into his ties to stock promoters, predicted the company's annual revenues
would skyrocket from $1.18 million to as much as $100 million, estimates
that even Wettreich had to
acknowledge were `pure speculation."

In the past six months, the hype has helped Wettreich's unprofitable
company raise more than $7 million through public
stock offetings and pnvate placements.

Today, Camelot seems to stand on the edge of the high-tech boom, in control
of a sexy new software product and a burgeoning chain of "Mr. CD-ROM" retail
software stores; though Camelot operates only five Dallas locations that
have been open four months, Wettreich projects an expansion to 100 franchise
stores across the country by the end of 1996.

What's uncertain is whether Digiphone will catch on any better than the
video telephone among consumers. And what's not
generally known among those dreaming about Camelot are the past business
failures of their English knight in shining armor.

"I don't want to rehash old, irrelevant information," says Danny Wettreich.
The CEO of Camelot Corporation has parked his large,
pinstripe suited frame in an upholstered chair in the company conference room.

He has a similar response when asked about practically anything more than
two years in the past, "I must say that all this is
old history and totally irrelevant to our present situation, Our
stockholders are very pleased with our performances."

Wettreich prefers to talk about the brilliant strategy that has made his
company a market darling. In addition to selling a hot
product through giant retailers like CompUSA and Best Buy, Wettreich
boasts,Camelot Corporation is creating a vertical
niche for itself by selling Digiphone on the shelves of its own Mr. CD-ROM
stores.

Says Larry Boyd, a Collin County lawyer who sued Camelot and its chairman,
"They are clearly in the business of trying to help
people get excited about their stock. What is annoying to me is that they
never have had any[net] income."

With Wettreich, there is often more-andless-than meets the eye.

The "management biographies" section in Camelot Corp.'s 1995 annual report
sums up the CEO's British business career suc-
cinctly: "Mr.Wettreich was an executive with two London, England, merchant
banks in the mid-1970s. Subsequently he was the
owner-manager of a private distribution company, and thereafter chief
financial officer of a $60 million retailer listed on the
London Stock Exchange."

In truth, Wettreich's early years were considerably more colorful than that
summary suggests.

After earning his degree in business services during the early 1970s from
the Polytechnic School of London,an Institution one tier below a
full-fledged British university,Wettreich worked for two years in the
corporate finance department of two
investment banking houses, Hambros Bank and Charterhouse.

Wettreich launched Zara Securities Group, a business he named after his
wife.Zara, who came from a wealthy family. The
holding company traded in spare motorcycle parts and invested in real
estate.By 1980, Wettreich had taken a job as chief financial officer of
Bambers Stores, PLC his father-in-law's company. (He sold or shut down
Zara's holdings over the next three years.)

The 150-store clothing chain, with shops throughout England, had performed
quite well before Weltreich came on board. During his three years there,
Bambers, which once earned as much as 3.5 million, began running in the red.
According to court filings,it lost $7 million in 1983.

Wetireich quit in July of that year, sold all his Bambers stock, and moved
to the United States.Two months later, Bambers went
into receivership, the British term for bankruptcy, rendering its stock
nearly worthless.

As chief financial officer, Wettreich presumably played a role in the
company's rapid decline, but the timing of his departure was fortuitous for
him and conspicuous for the stock holders!
In an article published shortly after Bambers announced its receivership,
The Daily Telegraph reported that Wettreich, the
son-in-law of the chairman, had been unable or unwilling to aid accountants
investigating the company 's books because be had emigrated to Dallas, Texas.

The company's shareholders later sued six former Bambers directors,
including Wettreich and his father-in-law. The suit
charged that the defendants and the company's outside auditing firm had
breached their fiduciary duties and run up $4.31 mil-
lion in excessive costs. The suit also alleged the directors had improperly
changed the method of valuing the company's stock dur-
ing Wettreich's tenure. Ultimately, some of Wettreich's codefendants
settled, allowing him to testify in later litigation that the case had been
dismissed.

By then, Wettreich had long been a resident of Dallas.Wettreich says his
prime reason for moving across the Atlantic in 1983 was to give his three
children a chance to grow up in the cradle of capitalism, which he
determined was Dallas."I made a decision to rear my kids in a pro-capitalist
environ-ment," he says.

Before moving his family, he had already started a fledgling resorts
development company based in Dallas, named Texas Country Gold, Inc. The
company owned a country club called Country Gold on Cedar Creek Lake, 50
miles southeast of Dallas."When I made the decision to emigrate,"Wettreich
says, "I started acquiring real estate in Texas."

Low-key and quiet, Wettreich seems the antithesis of the high-powered,
polished pitchman. Outside the office, he favors flannel shirts and jeans.
He seems to have happily shed the oppressive formality of his birthplace for
the more casual style of Dallas. "I didn't like English taxes and I didn't
like English weather. I don't want to spend a lot of time worrying about
accents and schools."

By 1985, he had set himself up as a financial wrangler in Dallas, selling
his Country Gold club and establishing Wettreich Financial Consultants. The
new business focused on public companies, and soon began carrying out what
would become trademark transactions: merging dormant public companies with
fledgling private ventures to allow entrepreneurs to sell stock
without going through the expense and hassle of an initial public offering
(IPO).

Typically, a businessman who wants to raise money in the public market to
expand must pay accountants, printers, bankers,
and lawyers to meet the hefty Securities and Exchange Commission disclosure
and filing requirements to launch an IPO. On average,
those costs run between $100,000 and $200,000, according to Lawrence
Steinberg, a Dallas corporate lawyer associated with
Jenkens & Gilchrist. Then the entrepreneur must pay investment bankers a
commission usually about 10 percent of the amount raised to market, or
underwrite, the offering.

Wettreich offered entrepreneurs a way to dodge much of that trouble and
expense by merging their ventures into existing public companies. Through
press releases, Wettreich would promote a company's newly acquired assets,
boosting the stock
prices and, at least temporarily, the value of the company. According to
deposition testimony, Wttreich's firm typically received a fee of $20,000 to
$30,000 for such services.Wetreich could also make money if he had invested
in the stock and managed to bolster the price.

Wettreich would scan financial reports and classified advertisements to find
dormant public companies, concerns that were trading at low stock prices and
had few, if any, performing assets. He would then place his own classified
ads in newspapers nationally, announcing that he had clean, publicly traded
shells to offer.

The practice was an enormous bookkeeping undertaking. Wettreich testified
that he cannot even recall all the names of companies he acquired and merged
with shells.SEC searches for companies affiliated with his name have yielded
lists of more than three dozen.

The transaction that Wettreich does proudly recall produced Phoenix Network,
a company now traded on the American Stock Exchange. In 1987, San Francisco
entrepreneur Tom Bell saw Wettreich's classified ad offering a shell company
for sale. Deeply frustrated, Bell had been trying unsuccessfully for years
to raise capital for his business concept of selling trunk-
line telephone service directly to companies and then going back and
subcontracting the service from big common carriers,including U.S. Sprint.

Bell flew to Dallas to spend time with Wettreich and his family. "I found
him to be a very straightforward guy," says Bell. "If he
said he was going to do something, he did it."

Bell and Wettreich merged the start-up telephone service company with an
inactive shell company, christened the new entity Phoenix Network, and began
selling stock.

It worked. Bell acquired the capital he needed to launch operations and the
deal was also profitable for Wettreich. Bell estimates that Wettrelch earned
$2.5 million by the time he sold his shares and quit his company
directorship in late 1989.
Although Bell expresses disappointment that Wettreich pulled out so soon, he
doesn't complain. Phoenix's stock price has continued to rise. The company
is now worth about $105 million. "Danny makes things happen," says Bell. "He
is just looking to hit the big home run."

In October 1988, Wettreich acquired the company that would become the
predecessor for Camelot. In what the Dallas Business Journal termed "an
unusual stock transaction," Wetireich used his children's trust, a
stock-transfer company he had established,
and the issuance of new shares, to take control of Bolyard Oil & Gas, a
struggling Denver-based publicly traded company,from the family members who
had held majority ownership.

On paper, Wettreich merged a private stock-transfer company he owned into
Bolyard, paying for the acquisition with no cash but by issuing 8 million
shares of stock.He gave the former directors of Bolyard shares in the new
company. In practical terms, the deal meant that Wettreich assumed control
of the Denver oil company, which traded on the NASDAQ exchange.After the
merger, he moved Bolyard's headquarters to Dallas. The family directors
resigned from the board. Wettreichpromised in press releases
to expand and diversify the company, which had reported a
$67,785 loss on the previous year's revenues of $100,819.

Within three months of Wettreich's takeover, he had changed the company's
name to Camelot Corporation. Wettreich says be selected the name because it
had "good connotations on both sides of the
Atlantic , martyred President John Kennedy in America, the legend of King
Arthur in England".

With his new company, Wettreich threatened a series of hostile takeover
bids, mostly in the oil industry. Three of his tar-
gets were: Big Piney Oil & Gas Company, based in Salt Lake City; Golden
Triangle Royalty & Oil Company, in Cisco, Texas;
and Tyrex Oil Company, based in Casper,Wyoming.

Wettreich did not actually acquire-any of the companies. But he didn't walk
away empty-handed either. In April 1990, Wettreich bought 1.8 percent of Big
Piney's outstanding shares, announced a shareholder solicitation to replace
the directors, and filed suit. The company offered him $75,000 to
settle.Deposition testimony shows he took the money and backed off.

The Golden Triangle directors got the same result by playing hardball.
Responding to his takeover moves, they sued Wettreich and dug up information
about his past business dealings.

"His general [approach] was to take over a company, strip it, leave the
shareholders withnothing," says Golden Triangle director Robert Kamon,
president of the company at the time. Kamon says Golden Triangle's tactics
scared Wettreich off.

Wettreich denies he was intimidated, and says he quit simply because "the
fight wasn't worth the winning."

In 1993, as Wetireich tried to take over Tyrex, his own auditors were
complicating his ambitions. Hein & Associates, a Dallas
accounting firm, had refused to meet the deadline for submission of
Camelot's annual report to the SEC. In August 1993,Wettreich fired the
accountants; that month,he also abandoned the move on Tyrex. "All we can do
is hire more auditors." he told the
Dallas Business Journal. "They didn't complete our audit, and we don't have
an explanation for it."

In a letter to the SEC reported in the November 15,1993 issue of Accounting
Today, Hein & Associates said it failed to meet the deadline because of
concerns about Camelot's transactions with members of Wettreich's family, as
well as the propriety of certain Wettreich deals. The accountants reportedly
asked the SEC to look into the company's acquisition of a building and a
related mortgage, payable to a trust for the benefit of Wettreich's
children; Camelot had issued $175,000 in preferred stock to repay the
debt.The deal, the accountants stated in their letter,"caused us to question
the economic substance of the transaction."

As a matter of policy, the SEC will not confirm or deny the existence of a
pending investigation or one that led to no formal action. There is no
formal record of any action against Wettreich
or Camelot.

A Dallas partner at Hein & Associates,while declining to elaborate,
confirmed that the SEC did make inquiries about the matter. Two former
Camelot employees also say SEC investigators interviewed them about Camelot
and Wettreich.

Wettreich says he is unaware of any SEC probe into any of his dealings, and
that no one from the agency has ever questioned him. While all three oil
companies struggled to escape Wettreich's grasp, other businesses embraced him.

Kathleen Williams, 48, now works as a professional photographer in Portland,
Oregon. When she met Danny Weltreich in July 1991, she owned and operated
Business Investigations, Inc., a successful private investigation firm that
concentrated on researching financial institutions and their officers.

Williams' firm was one of 28 nationally to have the approval of the
Resolution Trust Corporation to probe failed financial institutions, a
growth industry in those days. The year she met Wettreich, she had won the
small businessperson of the year award
from the Association of Women Entrepreneurs of Dallas. Inc. Magazine had
even run her picture. Internal Revenue Service returns show her six-year old
business earned $67,275 before taxes on revenues of $2.55 million and that
she employed more than 100 people. Out of the blue, Williams
recalls,Wettreich telephoned her during the summer of 1991 and told her
Camelot Corp. wanted to buy her company.

A professional at ferreting out financial bad guys. Williams found Wettreich
convincing. "He wined and dined us for six
weeks. He came across as real smooth."She says Wettreich promised to help
her expand the business nationally, to let her keep running it, even offered
her a seat on his board of directors. She knew she could be outvoted by
Wettreich and his in-house
lawyer, Jeannette Fitzgerald, because they comprised the entire board, but
Williams trusted Wettreich.

Wettreich proposed an all-paper transaction. Camelot would purchase her
company for $312,000, to be paid through Camelot
shares, priced at $3 apiece. Williams received no cash, but she and a
partner also received preferred shares in Camelot.

Only days after the deal closed on July 8,1991, Wettreich fired all but five
of Williams' employees, telling her it would be more economical to contract
out the work. Williams was skeptical. But "at first," she says, "I tried to
tell myself it would work out."

Things went from bad to worse. Though Williams says Wettreich assured her he
would expand the company and let her call the shots, he was making all the
decisions. She was angry and panicked, but she could see no way out.
Wettreich had acquired
control of all her company's receivables, which she later valued at
$249,912. She says she no longer even had access to the com-
pany's accounts.

Without notice, Williams says, Wettreich stopped paying her
company credit-card bill.

"You can't do anything," she recalls, "because you don't have
any money."

In December 1991, the Dallas Area Rapid Transit Authority rejected BII's
request for certification as a woman-owned business, citing Williams' sale
of the company to Camelot. The company's formal status as a business owned
and controlled by a woman had been critical in its receipt of work from the
RTC. Though the DART ruling suggested the RTC would also conclude that the
Camelot purchase constituted a change in ownership. RTC rules require a
contractor to inform the agency of any ownership change.

Wettreich decided to say nothing to the RTC,
presumably to protect the work it received under
the "woman-owned" provisions, according to Williams.

The company continued to work for the RTC.

In March 1992, Williams quit, saying she was unwilling to continue to
collaborate in the company's misrepresentations. "BII is continually
represented as a woman-owned business, when, in truth and in fact, it is
not," Williams wrote Wettreich in her resignation letter.

"This violates my personal honesty, my sense of character, and demonstrates
a total lack of integrity on the part of the
company which is intolerable to me."

The following month she told the RTC of her concerns about BII's woman-owned
status.

While the RTC began to investigate,Williams filed a $3 million suit in
Collin County district court against Wettreich and Camelot. She alleged that
Wettreich had misrepresented BII as a womanowned business to win work from
the federal government.

Researching Wettreich's past, Williams and her attorney, Larry Boyd, added
other claims:
that Wettreich converted company assets to personal use; that he violated
SEC rules by failing to notify Williams, then still a Camelot director, of a
March 1992 privatestock placement; that Wettreich violated securities
regulations by failing to disclose
Williams' resignation in SEC filings; that he allowed his children's trust
and brother to buy Camelot stock at unfairly low prices; and that Wettreich
manipulated the company's stock to dilute the value of others' shares while
boosting his own assets and those of his children's trust and a company
owned by his wife.

On the stock-manipulation allegations, Williams cited Camelot's April 1992
purchase of a building owned by the children's trust; the building was then
transferred back through Camelot to another company, Forme, Inc., which
Wettreich's wife controlled.

(One former business associate pronounces that company's name "for me,"
insisting that the name reveals the company's true purpose.

Wettreich says he cannot remember his inspiration for the name,
but that the final "e" is silent.)

Wettreich denies any stock manipulation or confusion of personal and
corporate assets. He says he disclosed all material corporate events in his
routine filings to the SEC and that Williams' suit, on many points,reflects
"an incorrect understanding."

The RTC sided with Williams on her central point. In correspondence with the
agency, Wettreich had claimed that his wife, Zara, through her shares in
Camelot. owned a majority of BII, Williams' old company. He also claimed
that Fitzgerald, his in-housefemale lawyer, operated the Camelot subsidiary
on a day-to-day basis.

On February 22,1993, Howard Cox, director of the RTC's Office of Contractor
Oversight & Surveillance, recommended revocation of BII's woman-owned
status. While agreeing that Zara held majority ownership in the Camelot
subsidiary, Cox con cluded that, from July 1991 through August 1992, Danny
Wettreich had run the busi-
ness, setting its policies and doing the bulk of its hiring and firing. The
RTC barred BII from receiving preference in contract
awards on the basis of woman-owned-and-operated status.

By the time of the RTC ruling, the decision about BII's status was moot;
there was no more promising investigations company.

A year later, in March 1994, Wettreich reached an out-of-court settlement
with Williams. The terms of the settlement remain confidential, but her
attorney, Larry Boyd, says the deal covered the costs of her litigation and
compensated her for her lost business.

Today, Wettreich dismisses the significance of Williams' suit. He paid her,
he says, because "the cost of the litigation was hor-
rendous." About Williams, he says, "This was a disgruntled ex-employee";
about her allegations, "Pure nonsense."

Wettreich offers no apologies for shutting down companies. "My function is
to do what is correct for my stockholders. If our decision was to close the
business down, the result has been positive for our shareholders."

Last summer's spike in Camelot stock price would have benefited those, like
Williams, who had received stock in exchange for their businesses; but
Williams and several others who parted ways unhappily with Wettreich wanted
nothing more to do with him and sold their shares before Camelot's price
climbed.

In extracting a settlement from Wettreich, Williams broke fresh ground. Most
of the small-business owners who sold their companies to Wettreich and felt
cheated never attained any measure of revenge in court.

Linda Blanchard, for example, didn't know Wettreich from a stranger when he
first called in July 1992, inquiring about purchasing the real-estate
appraisal company Blanchard and her father had built. The Camelot CEO's
pitch sounded good. Recalls
Blanchard; "He said he wanted to buy my business and put offices all over
the U.S."

Given the Dallas real-estate slump, Blanchard knew she needed to expand her
commercial and residential appraisal business nationally. Wettreich and his
shareholders, she thought, could take on the burden and risk of expanding
the company for her.

Wettreich offered to have Camelot buy McKee Blanchard and Associates for
$162,500, payable in Camelot stock.

By the end of July, Blanchard had agreed, with the understanding, she says,
that she would continue to operate the company.

Just days later, Blanchard concluded she had made a terrible mistake. "It
was an awful nightmare experience," she says. "As soon as he bought my
business, I never talked to him again. I opened and the very next day he got
my receivables and my cash."

On October 1, just two months after buying her company, Wettreich walked
into Blanchard's office and told her; "Go home." He was shutting down Mckee
Blanchard.
Litigation is still pending with the landlords of the building Blanchard and
her employees had occupied, but Blanchard says she didn't have the energy or
resources to sue Wettreich; all her cash was in the business and he had
taken it. I just wanted
to wash my hands of him."

Wettreich says he closed the businesses he bought from Williams and
Blanchard because they "depended on the individuals who were managing them"
and the two women failed to meet his standards as managers.

Never mind that both women had run their companies profitably before the
companies were acquired by Camelot.

Wettreich contends he shouldn't be faulted for buying companies with bad
managers, and he insists his shareholders don't think so either. As
evidence, he repeats his management mantra: "The ultimate proof of the
pudding is in the stock price."

In July 1993, Camelot Corporation made the leap from real-estate services to
wholesale videotape distribution, purchasing 40 per
cent of New Jersey.based Goldstar Video Corp. Goldstar distributed
children's videos,including such titles as Ernie's Big Mess and Dr. Seuss'
Hop on Pop, to grocery and drugstore chains.

In exchange for the minority stake, Wettreich gave Goldstar owner Ronald
Goldsmith 500,000 shares in Camelot, then valued at $218,750. But In October
1993, three months after Wettreich bought into the company, Goldstar filed
for Chapter 11
bankruptcy protection.

Goldstar's death appears to have resulted from a self-inflicted wound.
Goldstar acquired its videos almost entirely from
Random House, paying the company a $1 royalty on each tape, with a
guaranteed minimum annual fee of $1 million. The Random
House agreement required Goldstar to restrict its distribution to
supermarkets and drug-store chains.

In bankruptcy-court pleadings, Random House said it had terminated its
contract with Goldstar because it caught the
company violating the distribution restrictions beginning in May 1993,
before Camelot had invested in the company.

The cancellation of the contract doomed the company. In its 1995 annual
report, Camelot reported that it had written off its
remaining equity investment with Goldstar.

Weftreich says he was unaware how severely the relationship between Random
House and Goldstar had deteriorated. "It
was not a good investment," he said.

Despite its rocky past, despite its lack of profitability, Camelot would
rise to national attention-and make Wettreich's stock worth millions on the
back of a single product: Digiphone.

The Digiphone story starts with the entrepreneur behind it: Kevin Corson, a
38 yearold resident of Portland, Oregon. Corson, who had previously
developed and marketed a voice recognition program called Voice Blaster, met
Wettreich in early 1994 when Stephen Froelicher, a Florida businessman, had
introduced them.

Wettreich had gone into business with Froelicher in 1993, buying
Froelicher's catalogue CD business,for $25,000 cash and 202,000 shares of
Camelot stock valued at$143,000. Together, Wettreich and Froelicher
developed the concept for the Mr. CD-ROM retail-store chain. The two opened
a test store in Florida, which they later closed.

Froelicher had known Corson through the CD and software business. When
Corson told him about his plans to take public a company based on the new
software he had programmers developing, allowing virtually free long
distance telephone calls via the Internet, Froelicher urged him to contact
Wettreich.

Corson called, then flew to Dallas. "I hung around for about a month," he
recalls. Corson says he recognized, by perusing old SEC documents, that
Camelot and Wettreich had experienced their share of financial woes. He
would have a good idea, and he wouldn't get the right marketing," says
Corson about Wettreich's past business ventures, "or he'd have the marketing
but he wouldn't have a good idea."

Corson, however, was undaunted. Wettreich struck him as a cool cookie. "He
seemed like he could handle bad stuff.
He said things with an air of confidence," Corson says. He believed
Wettreich had learned from the weathering he had
endured. "He's young," says Corson. "but he has been humbled."

Corson and a partner decided to sell their rights to Digiphone to Camelot
and Wettreich. "We knew he would work harder than others because he has more
to lose," says Corson. "His image as far as running a company was lagging,
Danny has been through hell and high water."

In exchange for his interest in the Digiphone prototype, in February 1994
Corson received royalties, cash, and a spot on Camelot's executive ladder.
Corson won't disclose the total value of the package, but says it could
amount to more than $1 million,
depending on how well the product sells.

By July 1994, Wettreich had begun putting bulletins on the Public Relations
Newswire about his new vision for his company: "Camelot announces that it
has discontinued operations of its remaining two financial services
subsidiaries which completes the
restructuring undertaken by Camelot during the last 12 months. We have
closed or sold all of our businesses to concentrate on exciting new ventures
such as CD-Rom software."

By February 1995, Wettreich revealedmore about his plans about both the
Mr.CD-ROM chain and Digiphone. Though the software was not yet available,
Wettreich was touting it to investors through all the public-relations
channels he could find.

His dispatch led to some embarrassing moments.

In an April 3, 1995, demonstration of Digiphone for a Dallas audience of
bankers and other potential investors, Corson telephoned a colleague in
Eugene, Oregon, using the software. The connection was made, but the
Internet provider in Eugene unexpectedly disconnected the local user.

Wettreich and Corson, red-faced, had to explain the snafu. "It was an
eye-opener," recalls Corson, who termed the showing "disasterous." We had
only a three-minute window of opportunity, "and some guys walked out of
there thinking it didn't work."

Stan Bunger, then an anchor for KRLD-1080 radio, attended the event. "It was
pretty funny," Bunger recalls. "You could
hear people jeering in the back of the room: "Buy a Mac." Bunger recalls an
angry investor marching up to Corson, who was
busy performing the demonstration, and demanding to know what the hell was
wrong with the software.

Amid the chaos, Wettreich's performance impressed observers. Recalls one
financial reporter in attendance: "As the presentation went down in flames,
he was very cool."

In the long run, the embarrassing demonstration did little to dampen
investors' interest in Camelot-and its hot new product. In June 1995, Clark
Hunt, a grandson of H.L. Hunt and son of Lamar Hunt, along with partner
Barrett Wissman, agreed to put $1.2 million into Camelot and to keep that
investment in place for at least 12 months. Wissman declined to go into
details about the decision, offering a comment that explains the gee-whiz
appeal of
Digiphone: "If there is a product [with which] you can make free
long-distance calls, it's fascinating."

Last November, Wettreich raised another $5.3 million with a private
placement to institutional investors.

The advertising copy touting Digiphone part of a $1 million
campaign states its message simply: "Join the Digiphone revolu-
tion. Call anywhere. Talk forever. Never pay long distance."
The print ads include an unusual feature: CAML, Camelot Corp.'s
stock symbol on the NASDAQ exchange.

"I've never seen a company put its stock symbol on product advertising,"
sneers Daniel Nissan, marketing director of New Jersey-based Vocaltec. Inc.,
which offers Internet Phone, the only product competing directly with Digiphone.

In truth, both Vocaltec and Camelot have a long way to go before giving long
distance carriers sleepless nights.

Both software products suffer from what is known as internet delay, brief
but annoying gaps in conversations that last
for parts of a second for U.S. calls and as much as a second and a half for
international calls.

Product backers contend that the savings from internet calling will far
outweigh these minor annoyances, but they also suffer from the absence of an
industry standard, making it even less likely that two internet users will
have the compatible software necessary to talk long-distance. The prospect
also remains that Internet long-distance telephone calls will go the way of
video
phones a much-ballyhooed concept yet to hook consumers.

It's hard to tell how Digiphone, priced at about $50 in most stores, is
moving so far. In September, the month Digiphone became available, Camelot
reported that it had $2 million in preliminary orders. The compary has
reported no subsequent sales figures.

Also unclear is how the MR. CD-ROM stores are faring. Though only five are
open now, Wettreich has raised expectations, predicting a phenomenal rate of
growth: 100 franchise locations by the end
of 1996.

At the company-owned Mr. CD.ROM store on the corner of Preston and Forest
Roads, business seemed brisk one pre-
Christmas afternoon. In an aisle marked "EDUCATIONAL" in bright red lights,
a mother bemoaned the dearth of offerings
for her child's Macintosh computer, but at the cash register, the line was
three deep.Each customer held two or three Cds, most priced at more than $10
each, with the more expensive titles running as high as $100.

For a December 4 article published in Computer Retail Week, Wettreich said
that the prior weekend for Mr. CD-ROM "was
very good,...basically what we had expected." He offered no specific sales
figures then and declines to offer any now.

Numbers from the quarter ending October 31-the most recent available show
Camelot Corp.'s performance remains underwhelming.The company reported a net
loss of $798,696 on revenues of $527,144.

Though Camelot remains unprofitable, Wettreich exudes confidence about its
future.

For the first time, this past year he reported at least part of his own
compensation in the company's annual report. In the
past, Camelot's filings have always stated that Wettreich earned no salary
directly from the company. Instead, Wettreich
acknowledged in depositions, he was paid indirectly, through Wettreich
Financial Consultants, which Camelot hired.

The most recent annual report shows Wettreich has entered into a l0-year
contract with an annual salary of $250,000 and a
cash bonus equal to 5 percent of the company's annual pre-tax profits. The
climb in Camelot's shares from a 52-week low of less
than $1 per share has boosted the paper value of Wettreich's stock holdings
by millions. With the stock price closing on
Wednesday at $2.75 a share, the value of his family's 43.5 percent stake in
Camelot equals $20.7 million. That total of beneficially held shares
includes unexercised stock options Wettreich maintains as well as the
holdings of his wife, her companies, and their children's trust.

Wettreich, who for years operated on the edge of mainstream financial
circles, also clearly now fully appreciates what favorable coverage from the
business press can do for Camelot. At a recent computer industry trade show
in Las Vegas,
Wettreich says, he conducted interviews about his company and its software
for at least five different television crews, including one from Germany.

This story is another question. "I would only want to express a raised
eyebrow about its relevance," he says about discussions of
his track record. His concern: dwelling too much on his distant past-a
period he defInes more than two years ago.

"I would love to see a story that is 20 percent about yesterday and 80
percent about today," Wettreich says. About his battles
and bankruptcies of earlier days, Wettreich concedes; "The more inventive a
company is about creating its public structure, the more it tends to invite
litigation."

**********************END
ARTICLE*****************************

What do you think? Can Camelot and it's management be trusted to safegaurd
YOUR money, or will you be one more of the investors he leaves in the dirt
when he feels it is convenient???

What do you think will happen to the stock prices when the SEC
investigations and formal charges are revealed?

If you would like to see some of the horrible reviews Digiphone has recieved
( I honestly have yet to see a positive review and I have looked hard), let
me know.

Save your money.
Do not buy Camelot products or stock!

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