INVESTOR ALERT – ATTORNEY GENERAL ANNOUNCES INDICTMENTS IN DELAWARE ADVANCE LOAN FEE SCAM

(Wilmington, DE): On April 17, 2006, the New Castle County Grand Jury returned a 28-count indictment against Daniel L. Ginsburg and former Delaware Finance Secretary Joseph T. Cashman, charging the two with racketeering, conspiracy, theft, securities fraud, and securities registration violations for activities related to a fraudulent advance fee loan scheme operating in Delaware. The New Castle City Police Department, who received the initial complaint from a Texas victim, assisted the Attorney General’s Office in the investigation.

Defendants Ginsburg and Cashman are alleged to have promoted a methodical, ongoing advance fee loan scheme through several business entities situated in Delaware, including Thatch, Inc. and The Two Js. The Defendants are said to have approved non-existent loans totaling millions of dollars for out-of-state businesses in need of financial capital at reasonable rates, but borrowers had to pay a percentage of the gross loan amount in advance as “points” on the loan, or “earnest money.” Once the victims paid the advance fee, they never received the loans they were promised, but were continually assured by Ginsburg and Cashman that the money was forthcoming. When the victims requested refunds on the advance payments they made on the loans, they were never reimbursed.

Investigators are searching for other potential crime victims. If you have any information on loans solicited by Joseph Cashman and/or Daniel Ginsburg regarding the businesses entities of Thatch, Inc., The Two J’s, Associates of Emma, L&T Trust, or SGE Associates, please contact Chief Securities Investigator Stanley J. Yackoski at (302) 577-8935.

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ATTORNEY GENERAL DANBERG, PHILIP MORRIS USA REACH LANDMARK AGREEMENT TO REDUCE ILLEGAL INTERNET CIGARETTE SALES

January 26, 2006

New protocol will reduce supply to illegal Internet cigarette traffickers

(Wilmington, DE): Attorney General Carl Danberg today announced that Philip Morris USA (“PM USA”) has agreed to incorporate protocols aimed at combating the illegal sale of PM USA cigarettes over the Internet and through the mails. The protocols are being adopted voluntarily by PM USA pursuant to an agreement reached with 37 Attorneys General across the country.[1]

The protocols provide for the: (a) termination of shipments of cigarettes to any of PM USA’s direct customers that the Attorneys General have found to be engaging in illegal Internet and mail order sales; (b) reduction in the amount of product made available to direct customers found by the Attorneys General to be engaged in the illegal re-sale of PM USA cigarettes to the Internet vendors; and (c) suspension from the company’s incentive programs of any retailer found by the Attorneys General to be engaging in such illegal sales.

The Attorneys General believe that virtually all sales of cigarettes over the Internet are illegal because the sellers are violating one or more state and federal laws, including: (1) state age verification laws; (2) the federal Jenkins Act (which requires that such sales be reported to state authorities); (3) state laws prohibiting or regulating the direct shipment of cigarettes to consumers; (4) state and federal tax laws; (5) federal mail and wire fraud statutes; and (6) the federal RICO law. Many of the sales made by foreign websites also violate federal smuggling, cigarette labeling, money laundering and contraband product laws.

The Attorneys General note that Internet cigarette sales also present a significant risk to public health, because most Internet vendors illegally fail to charge taxes, and it is well-established that lower cigarette prices lead to increased smoking rates. Moreover, while brick-and-mortar retailers check photo IDs to prevent children from buying cigarettes, the vast majority of Internet sellers have age verification systems that are wholly inadequate. Numerous studies have shown that the earlier an individual begins to smoke, the more likely it is that the person will become addicted, and thus age verification through photo IDs is essential to protect children from a lifetime of smoking.

Today’s agreement is the third major development in the Attorney Generals’ multi-pronged effort to restrict the payment, shipment and supply operations of the illegal Internet cigarette traffickers. In March 2005, the Attorneys Generals announced that the major credit card companies had all agreed to stop processing credit card payments for the Internet retailers. Later in the year, both DHL and UPS agreed to stop shipping packages for the vendors engaged in these illegal sales.

PM USA notes that it previously has penalized direct customers and retailers who sold its cigarettes illegally over the Internet and through the mails. PM USA is now the first tobacco product manufacturer to agree to reduce the supply of cigarettes to direct customers who supply vendors engaged in the illegal re-sale of PM USA cigarettes on the Internet. The Attorneys General commended PM USA for its cooperation in the effort to reduce these illegal sales. In addition, the Attorneys General will be encouraging other tobacco product manufacturers to take steps to reduce the supply of their cigarettes that are re-sold by illegal Internet cigarette traffickers.

[1] The negotiations with PM USA were led by the New York State Attorney General’s Office. In addition, the Attorneys General from the following jurisdictions have joined this agreement: Alabama, Arkansas, American Samoa, California, Colorado, Connecticut, Delaware, District of Columbia, Georgia, Hawaii, Idaho, Illinois, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Mexico, New Jersey, Northern Marianas, Oklahoma, Oregon, Puerto Rico, South Carolina, South Dakota, Tennessee, Utah, Vermont, Washington, West Virginia, Wisconsin and Wyoming.

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Ameriquest Will Pay $325 Million and Reform its Lending Practices to Resolve States’ Investigations

 (Wilmington, DE): Attorney General Carl C. Danberg announced today that Ameriquest Mortgage Company, the nation’s largest sub-prime lender, has agreed to pay $295 million to consumers and make sweeping reforms of practices that states alleged amounted to predatory lending. Ameriquest also will pay a total of $30 million to the 49 states and D.C. that are participating in the settlement agreement for costs of the investigation and consumer education and enforcement. Delaware consumers could receive an estimated $194,000 for restitution as eligible Ameriquest customers. The remaining funds received will be used for consumer education and projects and for costs and fees.

“I am pleased that this multi-state action has produced such significant results for consumers both in Delaware and around the country, particularly those consumers who may be more susceptible to predatory lending tactics,” said Danberg.

The $325 million payment ranks as the second-largest state or federal consumer protection settlement in history, after the $484 million predatory lending agreement reached in 2002 between most states and Household Finance Corporation.

Law enforcement officials and financial regulators initiated their investigation after receiving hundreds of complaints from Ameriquest customers across the country. The ensuing investigation uncovered consumer protection problems in areas governed by the settlement. The alleged improper practices included: inadequate disclosure of prepayment penalties, discount points and other loan terms; unsolicited refinancing offers that did not adequately disclose prepayment penalties; improperly influenced and inflated appraisals; and encouraging borrowers to lie about income or employment to obtain loans.

Ameriquest is the nation’s largest sub-prime mortgage lender. Ameriquest primarily makes refinancing loans to existing homeowners who are hoping to consolidate credit card and other debt into their new home mortgage and come out ahead with overall monthly savings. Borrowers who don’t have the best credit ratings may turn to sub-prime loans, which often have higher interest rates and other costs.

Under the agreement, Ameriquest is required to:

* Provide the same interest rates and discount points for similarly-situated consumers.

* Provide full disclosure regarding interest rates, discount points, prepayment penalties, and other loan or refinancing terms.

* Not encourage prospective borrowers to falsify income sources or income levels.

* Overhaul its appraisal practices by removing branch offices and sales personnel from the appraiser selection process, instituting an automated system to select appraisers from panels created in each state, limiting the company’s ability to get second opinions on appraisals, and prohibiting Ameriquest employees from influencing appraisals.

An independent monitor will oversee Ameriquest’s compliance with the settlement terms. The monitor will have broad authority to examine Ameriquest’s lending operations, including access to documents and personnel. The monitor will submit periodic compliance reports to the Attorneys General during the next five years. Ameriquest will pay the monitor’s costs.

Restitution will be made to eligible Ameriquest customers who obtained mortgages from January 1, 1999 through December 31, 2005 with payments based on a formula set by the states. Delaware consumers do not need to take any action at this point to pursue recoveries – they will be contacted in the months ahead as specific recovery terms and plans are determined.

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ATTORNEY GENERAL’S INVESTIGATIVE REPORT ISSUED REGARDING ELECTION COMMISSIONER’S POLITICAL ACTIVITY

(Wilmington, DE): Attorney General Carl C. Danberg announced that his office has issued today an Attorney General’s Investigative Report on whether State Election Commissioner, Frank Calio, violated Delaware law through his articles and commentaries discussing political subjects. The Report concludes that Calio’s actions did not violate the prohibitions on political activity by election officials and are not prosecutable under Delaware law. [N.B. For media outlets who are receiving this information electronically, a copy of the Report is attached. For fax recipients, please call if you wish to receive a copy of the 16 page Report]

The Report found that Title 15, Section 308 of the Delaware Code, if given broad interpretation, violates the First Amendment to the Constitution. Section 308 seeks to limit the political activity of employees of the Office of the State Election Commissioner. The Report concludes that prohibited political activity must be limited to partisan political activity. In preparing the Report, a review of the provisions of the Hatch Act and Supreme Court decisions regarding the Act was undertaken to inform the Attorney General’s decision as to the meaning of the Delaware law.

“This issue is one that has attracted public attention and the decision of this office has ramifications for all employees of the State Departments of Elections and other elections officials. Accordingly, I chose to issue the Report publicly to provide guidance to individuals effected by such laws,” said Attorney General Danberg.

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