CAR_Public/990222.MBX              C L A S S   A C T I O N   R E P O R T E R

             Monday, February 22, 1999, Vol. 1, No. 12

                           Headlines

DAIMLERCHRYSLER: Vows to Appeal Pennsylvania Air Bag Jury Verdict
DATA SYSTEMS: Company Agrees to Settle Securities Claims
DRUG PRICING: 19 Drug Companies Agree to $176MM Settlement Pact
FLEMINGTON PHARMACEUTICAL: Company Discloses Filing of Litigation
GENCOR INDUSTRIES: Weiss & Yourman Files Complaint in Florida

HOLOCAUST VICTIMS: Surviving Experimentation Victim Sues Bayer AG
LERNOUT & HAUSPIE: Milberg Weiss Files Complaint in New York
LERNOUT & HAUSPIE: Pomerantz Haudek Files Suit in Massachusetts
ORBITAL SCIENCES: Cohen Milstein Files Complaint in Virginia
PEDIATRIX MEDICAL: Weiss & Yourman File Complaint in Florida

PEDIATRIX MEDICAL: Milberg Weiss Files Complaint in Florida
PEDIATRIX MEDICAL: Weinstein Kitchenoff Files Suit in Florida
PEDIATRIX MEDICAL: Berman DeValerio File Complaint in Florida
PEDIATRIX MEDICAL: Berger & Montague File Complaint in Florida
SAFEWAY, INC.: Reaches Accord with Alaska Public Interest Group

SEARS BANKRUPTCY: Pleads Guilty to Bankruptcy Fraud; $60MM Fine
SERVICE CORPORATION: Kirby McInerney Files Complaint in Texas
SERVICE CORPORATION: Kaplan Kilsheimer File Complaint in Texas
SMARTALK TELESERVICES: Bernstein Litowitz Amends Complaint
USA TALKS.COM: Weiss & Yourman Files Complaint in [California]

USA TALKS.COM: Shepherd & Geller Files Complaint in California
VISION TWENTY-ONE: Barrack Rodos Files Complaint in Florida
WORLD ACCESS: Weiss & Yourman File Complaint in Georgia
Y2K LITIGATION: Japanese Insurers Will Cover Harmed Individuals

                           *********

DAIMLERCHRYSLER: Vows to Appeal Pennsylvania Air Bag Jury Verdict
-----------------------------------------------------------------
DaimlerChrysler (NYSE: DCX) vowed to appeal a Pennsylvania jury's
decision to award 75,000 plaintiffs $58.5 million in a class
action lawsuit.  

The case involves a woman who credits the air bag in her 1989
Chrysler LeBaron with saving her and her unborn child from
serious injury -- and possibly even death -- but who experienced
a minor hand burn when the air bag deployed during a 1992
accident.

"Ten years ago, we would have received a thank you note from a
customer for the air bag having saved her life.  Today, we get
slapped with a multi-million dollar verdict.  That is the nature
of our out of control legal system," said DaimlerChrysler
attorney Karl Lukens.  "Holding DaimlerChrysler liable in this  
case is like holding the manufacturer of a bullet proof vest
responsible because their product saved someone's life, but
resulted in a few bruised ribs.  This is a case about trial
lawyer greed, not about a defective product."

Crawley v. Chrysler is a class action suit brought on behalf of
approximately 75,000 Pennsylvania residents who own Chrysler
vehicles (model years last quarter of 1988, 1989 and 1990) with
driver air bags that have vents at the 9 and 3 o'clock positions
on the steering wheel.  These vents allow for the rapid deflation
of the airbag following deployment -- a critical feature in any
air bag system.

Only 14 of the 75,000 class members have ever had an experience
similar to the name plaintiff, Louise Crawley.  The plaintiffs'
own expert admits that 99% of the members of this class action
will never be involved in an accident that causes hand burns.  
DaimlerChrysler's expert believes the figure is around 99.99%.

Dr. Daniel Hensell, who treated Mrs. Crawley, testified that she
suffered a second-degree burn on her left wrist.  The burn kept
her from working at her job at a nail salon for a week, the
Associated Press related.  

"The overwhelming majority of the 75,000 class members are
satisfied drivers of Chrysler vehicles that are now eight to 10
years old," said Lukens.  "Not a single penny of this award will
go to compensate anyone for any injury.  In fact, the lion's
share will go straight into the pockets of the trial lawyers."

Martin D'Urso, an attorney for the plaintiffs, told the
Associated Press that the lawsuit was aimed at ensuring drivers
can get safe air bags and not about trying to profit from a  
minor injury.

Lukens called air bags "the most tested safety advance in
automotive history."  Prior to selecting the air bag design in
question, Chrysler engineers examined the records of the National
Highway Transportation Administration (NHTSA) for air bag
performance in the field.  Chrysler also reviewed the performance
of air bags installed in vehicles produced by other automakers --
all of which had the 9 and 3 o'clock venting position.  Chrysler
and the air bag supplier also did extensive testing.

None of these tests revealed any problems with burns due to the
vent location.  Even the plaintiffs' own expert admits that there
was no information available that would have alerted Chrysler to
the possibility that some drivers would experience hand burns in
an air bag deployment.

"We are confident we have strong substantive grounds for appeal,"
Lukens said.  "Ultimately, this outrageous ruling will be
reversed and justice will prevail."

Damages are as follows:  Jurors awarded $730 to each class
member, and assessed $3.75 million in punitive damages ($730 x
75,000 class = $54.75 million + $3.75 million in punitives =
$58.5 million).  The trial began on January 20, 1999 in the Court
of Common Pleas in Philadelphia.

The judgment was just the latest against the company involving
air bags.  A federal jury in New York in December ordered
DaimlerChrysler to pay $750,000 to a family of a 5-year-old boy
killed by an air bag during a family vacation to Puerto Rico in
1995.  Prior to the company's merger in November with Daimler-
Benz AG, Chrysler and the parents of a 5-year-old Nashville,
Tenn., girl killed when a minivan air bag deployed during an
accident reached an out-of-court settlement.


DATA SYSTEMS: Company Agrees to Settle Securities Claims
--------------------------------------------------------
Data Systems Network Corporation (OTC BB:DSYS) announced it has
agreed to a stipulation of settlement of the consolidated
securities class action lawsuits filed in 1998.  The stipulation
of settlement has been filed in federal court in Detroit,
Michigan.  The Honorable John Corbett O'Meara gave preliminary
approval for the proposed settlement last week, subject to his  
later determination of the settlement's fairness at a hearing
currently set for May 12, 1999.

Under the terms of the proposed settlement, and subject to
various conditions, Data Systems would create a gross settlement
fund valued at approximately two million dollars.  The fund would
benefit a settlement class of purchasers who bought Data Systems
stock during the period of May 16, 1996 through February 24,
1998.  The fund would be comprised of $900,000 provided by the
Company's insurer, and, at the defendant's option either 650,000
Data Systems shares or an additional $1.1 million.  In agreeing
to the proposed settlement, the Company specifically made no
admission of any wrongdoing.

Earlier this month, Data Systems and Alydaar Software Corporation
(NASDAQ:ALYD) of Charlotte, NC, Charlotte, North Carolina
announced the signing of a definitive merger agreement. Alydaar
is a worldwide developer of Enterprise Information Portals (EIP)
and provides management consulting, design, development and the
deployment of Virtual Information Solutions.  Additionally,
Alydaar assists organizations in transforming their current
legacy information systems architecture to support a
heterogeneous, scalable, flexible and ubiquitous Internet and
Intranet architecture, and offers Y2K services utilizing
SmartCode Technology.  Data Systems provides computer network
services and products that enable the control of complex
distributed computing environments, allowing companies to
capitalize on their investments in technology and people and
provides a wide range of network integration services including
installation, consultation, technical support and training.

Michael Grieves, Data Systems Network Corporation's CEO, stated
"the proposed resolution of the class action lawsuits represents
a significant milestone in moving forward with the merger of our
two companies.  Alydaar has an exciting plan to implement
Enterprise Information Portals (EIP) solutions. We look forward
towards integrating Data Systems into Alydaar's growing
e-Business."


DRUG PRICING: 19 Drug Companies Agree to $176MM Settlement Pact
---------------------------------------------------------------
Nineteen drug companies will pay more than $176 million to settle
a class-action lawsuit alleging they overcharged for medicine
sold at  independent pharmacies in California, the San Francisco
Chronicle reported Friday.  In addition, the companies will have
to pay $27 million in fees to attorneys who represented the
plaintiffs in the suit brought on behalf of California's 32  
million consumers.

The drug companies agreed to furnish $148 million worth of brand-
name drugs to 300 nonprofit medical clinics in the state that
dispense drugs to the poor.  The companies will pay $1.6 million
to administer the three-year program.

Merck & Co. will pay the most -- more than $19 million -- while
Carter Wallace will pay the least, at $705,000.

The case is set for a final hearing on April 21 before a judge in
San Francisco Superior Court.

Spokesmen at Merck and several other drug companies told the
Associated Press Friday that they could not immediately confirm
the settlement report.   

The drug companies used an unfair, two-tiered system to price
wholesale drugs, according to the suit filed by the California
Public Health Association, a group that represents the clinics
that would receive the free drugs under the settlement.  The
companies sold drugs at discounts to health maintenance
organizations and other big volume buyers like mail order drug
firms, the suit alleged.  However, exorbitant prices were charged
neighborhood pharmacies and even some drug store chains.
Druggists claimed they paid up to $28.90 for 100 tablets of a
synthetic thyroid drug, while HMOs paid as little as $1.43.

"It represents a cheap settlement for the drug companies, and
they'll go on, business as usual, ripping off the public," Fred
Mayer, a Sausalito pharmacist  and past president of the
association, told the Chronicle.


FLEMINGTON PHARMACEUTICAL: Company Discloses Filing of Litigation
-----------------------------------------------------------------
Flemington Pharmaceutical Corp. (OTCBB:FLEM) announced Friday
that a former shareholder has filed a lawsuit against the
company, its President and Chairman, as well as the company's
former (now defunct) underwriter, Monroe Parker Securities, and
two former principals of the underwriter.  The lawsuit alleges
violations of the federal securities laws, and purports to seek
damages on behalf of a class of shareholders who purchased
Flemington common stock during a period from Nov. 19, 1997 to
Dec. 29, 1997.   

The company believes the lawsuit is without merit and intends to
defend against it vigorously.

Flemington is engaged in the development of novel drug delivery
systems for presently marketed prescription and over-the-counter
drugs.  The novel delivery systems include lingual sprays and
soft gelatin bite capsules.  The company believes these delivery
systems offer (i) improved drug safety by reducing the required
dosage, therefore reducing side effects; (ii) improved dosage  
reliability; (iii) improved patient convenience and compliance;
and (iv) enhanced dosage reliability.  The company plans to
develop such products through collaborative arrangements with
major pharmaceutical companies.


GENCOR INDUSTRIES: Weiss & Yourman Files Complaint in Florida
-------------------------------------------------------------
Weiss & Yourman announced that a class action lawsuit against
Gencor Industries, Inc. (AMEX:GX) and certain individuals
associated with the Company was commenced Friday in the United
States District Court for the Middle District of Florida on
behalf of investors who purchased Gencor shares during the period  
February 5, 1998 through January 28, 1999, inclusive.

The complaint charges Gencor and certain of its executive
officers with violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, as well as Rule 10b-5
promulgated thereunder.  The complaint alleges that defendants
issued a series of materially false and misleading statements
during the Class Period regarding the Company's financial
condition and results of operations.  These false and misleading
statements caused the price of Gencor's common stock to be
artificially inflated during the Class Period.


HOLOCAUST VICTIMS: Surviving Experimentation Victim Sues Bayer AG
-----------------------------------------------------------------
Patrick L. Thimangu, writing for the Associated Press, reports
that one of the hundreds of twins experimented on by the infamous
Dr. Josef Mengele at Auschwitz is suing Bayer AG, saying the
German pharmaceutical giant collaborated with the Nazi scientist.

In a lawsuit filed in U.S. District Court in Terre Haute,
Indiana, last week, Polish immigrant Eva Moses Kor -- thought to
be the first to target a German company for Nazi medical
experiments -- alleges that Bayer paid Nazi officials for access
to people in concentration camps and used the experiments as a
form of research and development during World War II.

Mrs. Kor contends that, at the age of 10, her arms tied and blood
drawn until she fainted.  Then, Bayer tested the effectiveness of
its drugs on prisoners injected with disease-causing germs.  Her
lawsuit says a Bayer physician, identified only as Dr. Koenig,
accompanied Mengele on experiments, recorded the results and
reported back to Bayer.  Mrs. Kor claims that she and her sister,
Miriam, were among an estimated 1,500 sets of twins used in
"grotesque medical experiments" by Joseph Mengele, the so-called
"Angel of Death" at Auschwitz.  Mrs. Kor seeks unspecified
punitive damages and the recovery of profits Bayer allegedly
earned as a result of Mengele's research for herself and others
similarly situated.  "In this case what we have is direct
atrocities perpetrated by a corporation on human beings," Irwin
Levin, one of the attorneys involved in the case, told Reuters.

For many years, Mrs. Kor's complaint notes, Bayer denied
involvement in the experiments and refused to offer compensation.
But files from Auschwitz cited in the suit claimed to document
correspondence  between Bayer and the Auschwitz camp commander
relating to the sale of 150 female prisoners for use in
experiments.  At one point, a Bayer representative apparently
wrote to the camp official haggling over the sale price of women
to be used in an experiment for a sleep-inducing drug.  Later
correspondence allegedly from Bayer said all of the women  
died and "We will contact you shortly about a new shipment."

"This is an issue we have to look at carefully," Bayer spokesman
Thomas Reinert in Leverkusen, Germany, said in response to the
suit.  Similar allegations of collaboration in Nazi medical
experiments were levied against Farben during the Nuremberg
trials but were "rejected as false," Reinert told the AP.  In
1953, Farben's assets were divided among Hoechst, BASF, Bayer and
other companies, and Farben remains basically as a trust to
settle claims and lawsuits from the Nazi era.  Reinert said Bayer
should not be held responsible for any acts that may have been
committed by Farben.

Rabbi Marvin Hier, founder of the Simon Wiesenthal Center in Los
Angeles, told the AP he expects Mrs. Kor's lawsuit to lead to
similar cases.  "If companies are paying compensation for slave
labor," he said, "why shouldn't they pay for medical
experiments?"


LERNOUT & HAUSPIE: Milberg Weiss Files Complaint in New York
------------------------------------------------------------
A class action lawsuit was filed on February 19, 1999, in the
United States District Court for  the Eastern District of New
York, on behalf of all persons who purchased the common stock of
Lernout & Hauspie Speech Products (Nasdaq: LHSPF), between
February 3, 1998 and December 1, 1999, inclusive, by Milberg
Weiss Bershad Hynes & Lerach.

The complaint charges L&H and certain officers with violations of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
as well as Rule 10b-5 promulgated thereunder.  The complaint
alleges that defendants issued a series false statements
concerning the Company's financial condition and financial  
performance.  Because of the issuance of a series of false and
misleading statements, the price of L&H common stock was
artificially inflated during the Class Period.  Prior to the
disclosure of the adverse facts described above certain insiders
sold over 500,000 of shares of L&H common stock to the  
unsuspecting investing public at inflated prices realizing
proceeds in excess of $23 million.


LERNOUT & HAUSPIE: Pomerantz Haudek Files Suit in Massachusetts
---------------------------------------------------------------
Pomerantz Haudek Block Grossman & Gross LLP filed suit against
Lernout & Hauspie Speech Products (Nasdaq: LHSPF) and certain
corporate insiders in the United States District Court for the
District of Massachusetts on behalf of all purchasers of Lernout
securities during the period February 3, 1998 through and
including December 1, 1998.

The price of Lernout's common stock fell dramatically after the
Company announced on December 1, 1998 that the Securities and
Exchange Commission was reviewing the Company's accounting
methods for acquisitions since 1996, with twelve of Lernout's 23
acquisitions during this time period coming under scrutiny.  
According to one analyst who follows the Company, earnings for  
the year could decline by nearly 50 percent, depending on what
actions Lernout takes in response to the SEC inquiry.  The
complaint alleges that, by improperly accounting for certain
expenses arising from acquisitions during the Class Period,
Lernout issued false and misleading financial statements to the  
public, thereby causing the price of its stock to be artificially
inflated.  In addition, the complaint alleges that certain
insiders sold more than 528,000 shares of Lernout common stock
during the Class Period at the artificially inflated prices,
yielding proceeds of more than $23 million.


ORBITAL SCIENCES: Cohen Milstein Files Complaint in Virginia
------------------------------------------------------------
Cohen, Milstein, Hausfeld & Toll, P.L.L.C. and Berger & Montague
P.C., on February 18, 1999, filed a lawsuit (Civil Action No. 99-
197-A) in the United States District Court for the Eastern
District of Virginia, on behalf of purchasers of Orbital  
Sciences Corp. (NYSE:ORB) common stock during the period between
April 21, 1998 and February 16, 1999, inclusive.

The Complaint charges that Orbital and certain officers and
directors of that Company during the relevant time period
violated Sections 10(b) and 20(a) of the Securities Exchange Act
of 1934.  The Complaint alleges that defendants issued a series
of materially false and misleading financial statements and  
failed to reveal that the Company was employing fraudulent
accounting methods which artificially inflated Orbital's
earnings.  After the close of trading on  February 16, 1999, the
Company announced that, due to the improper accounting treatment
of certain items, the Company would materially restate earnings
for  the first three quarters of 1998.

The Complaint further alleges that defendants utilized their
inside information regarding the artificial inflation of the
Company's stock price to sell significant amounts of their own
personal Orbital holdings for proceeds for over $3 million.


PEDIATRIX MEDICAL: Weiss & Yourman File Complaint in Florida
------------------------------------------------------------
Weiss & Yourman commenced a class action lawsuit against
Pediatrix Medical Group, Inc. (NYSE:PDX) and certain individuals
associated with the Company  was commenced today in the United
States District Court, Southern District of Florida, West Palm
Beach Division on behalf of investors who purchased Pediatrix
shares during the period April 28, 1998 through and including  
February 12, 1999.

The complaint charges Pediatrix and certain of its executive
officers with violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, as well as Rule 10b-5
promulgated thereunder. The complaint alleges that defendants
issued a series of materially false and misleading statements
during the Class Period regarding the Company's financial
condition and results of operations.  These false and misleading
statements caused the price of Pediatrix's common stock to be
artificially inflated during the Class Period.


PEDIATRIX MEDICAL: Milberg Weiss Files Complaint in Florida
-----------------------------------------------------------
Milberg Weiss announced that it filed a class action lawsuit on
February 17, 1999, in the United States District Court for the
Southern District of Florida, West Palm Beach Division, on behalf
of all persons who purchased the common stock of Pediatrix
Medical Group Inc. (NYSE: PDX), between April 28, 1998 and
February 12, 1999, inclusive.

The complaint charges Pediatrix and certain officers with
violations of Sections 10(b) and 20(a) of the Securities Exchange
Act of 1934 as well as Rule 10b-5 promulgated thereunder.  The
complaint alleges that defendants issued a series false
statements concerning the Company's financial condition and
results of operations. Because of the issuance of a series of
false and misleading statements, the price of Pediatrix common
stock was artificially inflated during the Class Period.


PEDIATRIX MEDICAL: Weinstein Kitchenoff Files Suit in Florida
-------------------------------------------------------------
Weinstein Kitchenoff Scarlato & Goldman Ltd. announces that a
class action lawsuit has been commenced on behalf of anyone who
purchased the common stock of Pediatrix Medical Group Inc.
between April 28, 1998 and February 12, 1999.  Pediatrix is
traded on the NYSE under the symbol PDX.  The lawsuit has
been commenced in the United States District Court for the
Southern District of Florida, charging Pediatrix and certain of
its officers and directors with violating the federal securities
laws by overstating Pediatrix's earnings, and issuing false and
misleading statements about Pediatrix's accounts receivable.


PEDIATRIX MEDICAL: Berman DeValerio File Complaint in Florida
-------------------------------------------------------------
Berman DeValerio & Pease LLP, in a shareholder class action suit
filed in the United States District Court for the Southern
District of  Florida, charges that Pediatrix Medical Group, Inc.
(NYSE: PDX) overstated its revenues and earnings.  The case,
which alleges violations of the federal securities laws,  was
filed on behalf of all persons and entities who purchased the
common stock  of PDX from April 28, 1998 through and including
February 12, 1999 and who suffered losses on their investments.

According to the complaint, PDX issued materially overstated its
1998 financial results.  On February 16, 1999, PDX announced that
it would likely restate those results so that they would be in
conformity with generally accepted accounting principles.  PDX's
stock price plummeted almost 50% on this revelation.


PEDIATRIX MEDICAL: Berger & Montague File Complaint in Florida
--------------------------------------------------------------
Berger & Montague, P.C. announced that it has filed a Complaint
alleging violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934.  The action, seeking class action status,
was filed in the United States District Court for the Southern  
District of Florida on behalf of purchasers of Pediatrix Medical
Group, Inc. (NYSE:PDX) common stock during the period from April
28, 1998, through February 12, 1999, inclusive.

The Complaint alleges that throughout the Class Period, Pediatrix
overstated its earnings by at least $1.3 million by capitalizing
bonuses paid to its acquisition team instead of treating those
payments as expenses.  Plaintiffs also allege that Pediatrix
issued false and misleading statements concerning its accounts
receivable.  The Com Monumental Life Insurance Co., Life
Investors  Insurance Company of America, PFL Life Insurance
Co., Peoples Benefit Life Insuplaint alleges that Pediatrix
recently engaged a new auditor because the SEC found that its
former auditor had violated auditor independence rules.  Problems
were identified, the complaint alleges, during the new auditor's
audit of Pediatrix' 1998 financial statements.


SAFEWAY, INC.: Reaches Accord with Alaska Public Interest Group
---------------------------------------------------------------
Safeway Inc. and Carr-Gottstein Foods Co. announced today that
the companies have settled with the Alaska Public Interest
Research Group and six individual plaintiffs in Meyers et al. v
Safeway et al., a purported class action lawsuit pending in state
court in Anchorage, Alaska, which sought to prevent the proposed
acquisition of Carrs by Safeway.

The settlement says AKPIRG and the plaintiffs will no longer
oppose the proposed acquisition of Carrs by Safeway or the
consent decree regarding the merger filed recently in a
proceeding initiated by the Alaska Attorney General's office, and
will dismiss the Meyers et al. v Safeway et al. action.

The settlement calls for the creation of a citizens advisory
committee, to provide Safeway with input and reactions from
Alaskan consumers and shoppers during the ten months immediately
following the closing of the merger.  The advisory committee will
meet monthly with a Safeway senior manager from the company's
Alaskan operations, from the closing of the merger until most of
the supermarkets required to be divested by the consent decree
have been sold.

Carr-Gottstein Foods Co. is Alaska's largest food and drug
retailer, operating 49 stores in Anchorage, Fairbanks, Juneau,
Ketchikan, the Kenai Peninsula and other Alaska communities, as
well as the state's largest food warehouse and distribution
operation, and Alaska's largest freight company. Annual revenues  
in 1998 were $601.9 million.

Safeway Inc. is one of the largest food and drug retailers in
North America based on sales. The company operates 1,497 stores
in the United States and Canada. Its common stock is traded on
the New York Stock Exchange under the symbol SWY.


SEARS BANKRUPTCY: Pleads Guilty to Bankruptcy Fraud; $60MM Fine
---------------------------------------------------------------
A wholly owned subsidiary of SEARS, ROEBUCK AND COMPANY (NYSE:S)
pled guilty today to a one count criminal Information charging an
extensive scheme to defraud pro se bankruptcy debtors nationwide.   
It was also sentenced to pay a record $60 million fine.  United
States Attorney Donald K. Stern and Barry W. Mawn, Special Agent
in Charge of the Boston Field Office of the Federal Bureau of
Investigation, announced that a SEARS subsidiary known as SEARS
BANKRUPTCY RECOVERY MANAGEMENT SERVICES, INC., Friday pled guilty
before U.S. District Court Judge Douglas P. Woodlock to a one
count criminal Information charging bankruptcy fraud for a  
fraudulent scheme involving SEARS' bankruptcy reaffirmation
practices that began in 1985 and continued until early 1997.  
Judge Woodlock also imposed sentence of a $60 million fine.  The
criminal fine agreed to in this case is the largest fine ever to
be paid in a bankruptcy fraud case.  The fine also is believed to
be the largest criminal fine ever in Massachusetts, and one of
the largest nationwide.

In imposing sentence, Judge Woodlock stated that SEARS' offense
involved, "serious criminal conduct" that, "went to the heart of
the bankruptcy process."  Judge Woodlock noted that the conduct
was institutional at SEARS, and was a proper subject of criminal
prosecution.  In recommending the sentence to the court, a
federal prosecutor stated, "the fine will send a strong deterrent  
message to bankruptcy creditors nationwide that all participants
in bankruptcy proceedings, not just debtors, are required to
follow the law and act in a fair and honest manner with other
participants and the bankruptcy court."

At the hearing, Judge Woodlock was advised of SEARS'
extraordinary cooperation, beginning in April 1997, when senior
management and the Board of Directors became aware of the
criminal conduct.  SEARS' efforts involved effecting prompt and
full restitution of more than $180 million to debtors for its
conduct, paying a $40 million civil fine to the fifty state
attorneys general, and providing full and complete cooperation to
the government in its criminal investigation.

SEARS' fraudulent scheme involved its practices relating to
bankruptcy reaffirmation agreements.  Such reaffirmation
agreements, when executed in compliance with the Bankruptcy Code,
have the effect of maintaining legally binding debts which would
otherwise be discharged in bankruptcy.  The discharge of debts is
the principal benefit to a debtor filing for bankruptcy.  The  
discharge prohibits all creditors from taking any collection
action against the debtor for pre-bankruptcy debts that are not
reaffirmed.

If all the Bankruptcy Code requirements are not met, a
reaffirmation agreement has no legal effect and the debts listed
in it are discharged along with all others.  The Bankruptcy Code
requires that all such agreements be filed with the Bankruptcy
Court.  It also requires that where the debtor does not have
a  lawyer, that the Bankruptcy Court hold a hearing, advise the
debtor of the effects of the reaffirmation agreement, and make an
independent determination that the reaffirmation agreement does
not impose an undue hardship on the debtor or a dependent of the
debtor and that it is in the debtor's best interest.  The purpose
of these filing and hearing requirements is to protect debtors
from being coerced into signing such agreements and to assure
that they  fully understand the consequences of such agreements.  
They also permit the  Bankruptcy Courts to maintain some
oversight of the reaffirmation process.

SEARS' fraudulent bankruptcy practices began in 1985 and
continued until April, 1997.  SEARS and its subsidiary unit
induced bankruptcy debtors to enter into reaffirmation agreements
concerning their credit card debts with SEARS and lead them to
believe that the agreements would be filed with the Bankruptcy
Court and were binding contractual obligations, when in fact the
agreements were not going to be filed and the debtors had no
obligation to pay the debt.  To further mislead debtors, SEARS
sent regular monthly bills, which most debtors paid.  When
debtors did not pay, SEARS would make dunning phone calls and, in  
some cases, file a lawsuit to collect.

SEARS' fraudulent practices began in response to an increase in
bankruptcy filings in the mid-1980's.  As part of its bankruptcy
recovery program, a bankruptcy manual was drafted and distributed
which addressed, among other things, the handling of
reaffirmation agreements.  The manual advised that reaffirmation
agreements should not be filed with the bankruptcy court if
the bankruptcy judge was likely to reject, particularly in cases
where the debtor was not represented by an attorney.   SEARS was
not concerned about a loss of funds as a consequence of not
filing because their experience showed that debtors, unaware that
the agreements had not been filed and were not legally binding,
generally paid the monthly bills they received.

SEARS' employees were never instructed to tell debtors that the
agreement would not be filed, that it was void and unenforceable
or that the debtor had no obligation to make any payments.  In
fact, the actual reaffirmation agreements presented to debtors
for signature implied that they were filed in court and legally
binding documents.  They even included a line for a signature of
a bankruptcy judge when the debtor was not represented by an
attorney.

SEARS engaged in this conduct despite legal advice that the
policy of not filing all reaffirmation agreements was at best
highly risky and at worst illegal.  The company received advise
to that effect from outside counsel on its bankruptcy manual in
1985, but ignored it.  SEARS' in-house counsel not only disagreed
with that advice, but was critical of bankruptcy judges who, he  
said, refused to approve such agreements "based merely on their
own personal prejudices as to what is best for the debtor."

In 1992, counsel for SEARS gave similar advice to some credit
department executives.  However, the company weighed the
likelihood of getting caught versus the advantages of obtaining
hundreds of reaffirmations without filing them with the
bankruptcy court and decided as a business decision to continue  
the practice.

The $60 million criminal fine, will be deposited into the Crime
Victims Fund, a major funding source for victim services
throughout the country.  The Fund supports state crime
compensation programs and over 3,000 local victim service  
agencies, such as domestic violence shelters and rape crisis
centers.  Revenue for the Fund comes solely from the federal
criminal fines, special assessments, forfeited bail bonds, and
penalty fees collected by the U.S. Attorneys' Offices, U.S.
Courts, and the Federal Bureau of Prisons.

The case was referred by the Office of J. Christopher Marshall,
U.S. Trustee in Massachusetts, and investigated by agents of the
Federal Bureau of Investigation.  The case was prosecuted by
Assistant U.S. Attorney Mark J. Balthazard of Stern's Economic
Crimes Unit.


SERVICE CORPORATION: Kirby McInerney Files Complaint in Texas
-------------------------------------------------------------
On February 11, 1999, Kirby McInerney & Squire, LLP and Claxton &
Hill, P.L.L.C. filed a class action lawsuit in the United States
District Court for the Southern District of Texas against Service
Corporation International, Inc. (NYSE: SRV) and certain of its
officers and directors.  The lawsuit was filed on behalf of all
purchasers of Service Corp. securities between July 23, 1998 and
January 26, 1999, inclusive, including former shareholders of
Equity Corp. International (NYSE:  EQU), who acquired Service
Corp. securities in the January 1999 merger between the two
companies.

The Complaint asserts that defendants violated Section 10(b) of
the Securities Exchange Act of 1934 and SEC Rule 10b-5.  The
lawsuit alleges that defendants' material misrepresentations and
omissions caused the Company's stock to trade at artificially
inflated levels during the Class Period.  Throughout the Class  
Period, defendants misled the public by downplaying the effect
that certain industry-wide conditions were having upon the
Company (an operator of funeral homes).  Just days prior to the
disclosing the Company's true financial and operating condition,
Service Corp. completed the merger with Equity Corp.
International, using $576 million worth of its artificially
inflated common stock as currency.  When the Company finally
announced "revised earnings estimates" on January 26, 1999, the
price of its common stock plunged from $34  7/16 per share to $19
1/8 per share in a single day, a decline of 44%.


SERVICE CORPORATION: Kaplan Kilsheimer File Complaint in Texas
--------------------------------------------------------------
Kaplan, Kilsheimer & Fox LLP has filed a Class Action against
Service Corp. International (NYSE:SRV) and certain of its
officers and directors in the United States District Court for
the Southern District of Texas, Houston Division.  The suit
is brought on  behalf of all persons or entities who purchased or
acquired securities of Service Corp. between January 29, 1998 and
January 26, 1999, inclusive.  

The complaint alleges that certain officers and directors
violated Sections 10(b) and 20(a) of the Securities Exchange Act
of 1934, and Rule 10b-5 promulgated thereunder, by engaging in a
fraudulent scheme during the Class Period whereby they improperly
and prematurely recognized material amounts of revenue in
connection with Service Corp.'s cemetery operations in violation
of Generally Accepted Accounting Principles ("GAAP").  The
complaint also alleges that the defendants issued a series of
false and misleading statements concerning the Company's
financials, business, operations and its prospects for future
profitability.  Because defendants issued these false and
misleading statements, the price of Service Corp. common stock
was artificially inflated during the Class Period.


SMARTALK TELESERVICES: Bernstein Litowitz Amends Complaint
----------------------------------------------------------
Bernstein Litowitz Berger & Grossmann LLP was appointed lead
counsel in the SmarTalk TeleServices, Inc. Securities Litigation
and announced that it has filed an amended complaint on behalf of
purchasers of SmarTalk TeleServices, Inc. (NASDAQ:SMTK)
(NASDAQ:SMTKQ) securities between August 13, 1997 and January 7,
1999.   

The amended complaint consolidates the pending class actions
previously filed against SmarTalk during August 1998, and also
includes defendants' ongoing fraudulent conduct perpetrated after
the August 1998 complaints were filed.

The initial complaints filed by Lead Counsel charge SmarTalk and
certain of its officers and directors, and its outside auditors,
with violations of the Securities Exchange Act of 1934 during a
class period of May 13, 1997 to August 10, 1998.  The amended
complaint includes defendants' misconduct subsequent to August
10, 1998, including defendants' financial fraud which culminated
with defendants restating not only SmarTalk's fiscal 1997
results, its first quarter 1998 results and its second quarter
1998 results, but also its third quarter 1998 results as detailed
in SmarTalk's January 7, 1999 announcement.  The January 7, 1999
announcement caused SmarTalk's stock price to further collapse  
to $1-1/2 per share. The Company has declared bankruptcy.  The
amended complaint continues to name SmarTalk's officers and
directors and SmarTalk's outside auditor, PricewaterhouseCoopers,
LLP, with violations of the securities laws.


USA TALKS.COM: Weiss & Yourman Files Complaint in [California]
--------------------------------------------------------------
Weiss & Yourman announced it has filed a class action lawsuit on
behalf of purchasers of USA Talks.com Inc. (OTCBB:USAT)
securities between Nov. 24, 1998 and Jan. 29, 1999 for violations
of federal securities laws.

Defendants include USA Talks.com and certain of its officers and
directors.  The Complaint charges that defendants violated
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10-b(5) by, among other things, issuing false misleading
statements regarding USA Talks.com's financial condition as well
as its present and future business prospects.


USA TALKS.COM: Shepherd & Geller Files Complaint in California
--------------------------------------------------------------
Shepherd & Geller, LLC announced Friday that it filed a class
action lawsuit in the United States District Court for the  
Southern District of California on behalf of all persons who
purchased or  otherwise acquired common stock issued by USA
Talks.Com, Inc. during  the period November 24, 1998 through
January 29, 1999.

According to the Complaint, USAT and certain of its officers and
directors violated Federal Securities laws by artificially
inflating the price of USAT's common stock to a high of over $52
per share by misrepresenting USAT's publicly reported network
installation and technology. On January 29, 1999, the SEC halted
traded in the Company's common stock as a result of "questions
about the accuracy of information released to the public by the
company."


VISION TWENTY-ONE: Barrack Rodos Files Complaint in Florida
-----------------------------------------------------------
A class action has been commenced in the United States District
Court for the  Middle District of Florida on behalf of all
persons who purchased or acquired  the common stock of Vision
Twenty-One, Inc. (Nasdaq: EYES) between December 5, 1997, and
November 5, 1998, inclusive.

The complaint charges that Vision Twenty-One and certain officers
and directors violated the Securities Exchange Act of 1934 by
issuing a series of materially false and misleading statements
concerning the Company's ability to integrate acquisitions it had
made during the Class Period.  The complaint also alleges that
Vision Twenty-One misstated its revenues, net income and expenses
which caused the price of Vision Twenty-One common stock to be
artificially inflated  during the Class Period.


WORLD ACCESS: Weiss & Yourman File Complaint in Georgia
-------------------------------------------------------
A class action lawsuit against World Access, Inc. (NASDAQ:WAXS)
and certain individuals associated with the Company was commenced
in the United States District Court for the Northern District of
Georgia on behalf of investors who purchased World Access shares
during the period October 7, 1998 through and including February
11, 1999.

The complaint charges World Access and certain of its executive
officers with violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, as well as Rule 10b-5
promulgated thereunder.  The complaint alleges that defendants
issued a series of materially false and misleading statements
during the Class Period regarding the Company's financial
condition and results of operations.  These false and misleading
statements caused the price of World Access's common stock to be
artificially inflated during the Class Period.

This action seeks to recover damages on behalf of defrauded
investors during the Class Period. Plaintiff is represented by
Weiss & Yourman a law firm that has significant experience and
expertise prosecuting class actions on behalf of investors and
shareholders in federal and state courts throughout the United  
States, particularly those involving financial reporting
improprieties.  The firm has repeatedly been appointed by courts
as lead counsel in numerous complex litigations and have
recovered hundreds of millions of dollars on behalf of investors.


Y2K LITIGATION: Japanese Insurers Will Cover Harmed Individuals
---------------------------------------------------------------
Japanese casualty insurance companies will most likely pay the
claims of individuals injured as a result of a year 2000 computer
glitch, the chairman of the Marine and Fire Insurance Association
of Japan said at a press conference attended by a reporter for
Asia Pulse.  The association of nonlife insurers has concluded
that individuals have valid claims because, unlike companies,
they do not have the means to avoid accidents in connection with
the computer problem.  Casualty insurers, Asia Pulse relates,
have begun to insert clauses in their contracts with companies
exempting them from liability in case of damage from the
millennium bug.


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S U B S C R I P T I O N   I N F O R M A T I O N   

Class Action Reporter is a daily newsletter, co-published by
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Copyright 1999.  All rights reserved.  ISSN XXXX-XXXX.

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