UNITED STATES        
                  SECURITIES AND EXCHANGE COMMISSION
                                   
                        Washington, D.C.  20549
                                   
                                   
                               FORM 8-K
                                   
                            CURRENT REPORT
                                   
Pursuant to Section 13 and 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported): March 18, 1999



                      HALIFAX CORPORATION
      (Exact name of registrant as specified in charter)




     Virginia                  2-84160-W             54-0829246
(State or other jurisdiction (Commission File) (IRS Employer
 of incorporation)                Number)    Identification No.)





5250 Cherokee Avenue,  Alexandria, Virginia          22312
(Address of principal executive offices)         (Zip Code)




Registrant's telephone number, including area code:(703)750-2202



                      Not Applicable
(Former name or former address, if changed since last report)



HALIFAX REPORTS EMBEZZLEMENT

                                   
     ALEXANDRIA, VA, March 18, 1999 - Halifax Corporation (AMEX:HX)
today announced that an internal investigation has revealed an apparent
material embezzlement by a former employee in one of the Company's
subsidiaries.  The Company has reported the matter to the appropriate
law enforcement authorities, and the Company has engaged an outside
team of auditors to investigate the nature and amount of the
embezzlement.


The Company has entered into an agreement with the former employee
responsible for the embezzlement under the terms of which she has
agreed to cooperate with the Company in its efforts to determine the
disposition of monies taken from the Company and to transfer to Halifax
monies and assets in her direct or indirect possession up to the extent
of Halifax's loss.  The total amount recoverable from the former
employee has not been determined.  In addition, the Company maintains
insurance, which may cover a portion of the embezzlement, and the
Company is cooperating with law enforcement authorities in their
attempt to resolve the matter.

The event of the embezzlement may have a number of effects relating to
the past financial performance of the Company.  For example, the
Company's financial statements show the Company to be a consumer of
cash during the past several years.  Absent the embezzlement, the
Company may have been a positive generator of cash.  In addition, the
embezzlement may have effected the Company's income statements and
balance sheets.  For example, to the extent the embezzlement involved
the understatement of revenues or the overstatement of expenses, the
Company's P&L performance may have been understated.  To the extent the
embezzlement involved the creation of fictitious assets on the
Company's balance sheet, the Company will be compelled to take
appropriate write-offs in the current period.  Any amounts recoverable
could partially offset amounts written-off.

The Company will make definitive information regarding the various
impacts of the embezzlement available as soon as possible.  To the
extent the investigation reveals the necessity to do so, published
financial statements will be re-audited and restated.  In the interim,
the American Stock Exchange continues the trading halt on the Company's
common stock which became effective yesterday.  The Company is working
diligently to fully evaluate this situation so that the results can be
publicly disclosed and trading resumed at the earliest possible time.


FORWARD LOOKING STATEMENTS:  The above contains certain forward-looking
statements involving risks and uncertainties, which statements are
based on management's current views and assumptions regarding actions
by third parties, including but not limited to law enforcement
authorities, the former employee, the Company's senior lender, the
Company's insurance carriers and the Company's team of outside
auditors.