PRESS RELEASE

For Immediate Release

July 9, 2003

United States Attorney Jim Letten, Louis M. Reigel, III, Special Agent in Charge of the New Orleans Division of the Federal Bureau of Investigation, Michael J. Nelson, Special Agent in Charge of the New Orleans Field Office of the Internal Revenue Service, Criminal Investigation Division, and Colonel Terry Landry, Louisiana State Police, announced that United States District Judge Kurt D. Englehardt sentenced Joseph Aguda, 65, of New Orleans, Louisiana, to thirty-seven (37) months and three (3) years supervised release. Also sentenced was Craig Brown, 55, of North Mankato, Minnesota, to thirty-three (33) months imprisonment and three (3) years supervised release. The defendants will be ordered to pay restitution in amounts to be later determined by the Court. Both were convicted for conspiracy to commit mail fraud and to impede and impair the lawful government functions of the Internal Revenue Service.

The investigation revealed that an elaborate Ponzi scheme involving the sale of $18.8 million dollars in fraudulent promissory notes for the renovation of the Imerpiale Hotel in Taormina, Sicily and an additional $4.5 million in promissory notes for the financing of an Azerbaijan oilfield clean and recovery business. The superseding bills of information alleged that the defendants recruited financial advisors and insurance brokers and agents to sell promissory notes in a number of states by representing that repayment was guaranteed by New England International Surety, Inc., and Omne RE S.A., when they knew these companies were insolvent and had previously failed to fulfill guarantees on earlier projects.

A large portion of the money received from the sale of promissory notes for these two projects was either siphoned off by defendants, used to pay sales commissions, or used to pay earlier investors. In addition, a large portion of the proceeds generated through the sale of these promissory notes was sent out of the United States to foreign accounts in order to place the funds beyond the reach of claimants and policyholders. The defendants also used money raised on these later projects to pay earlier investors in other projects in order to perpetuate and promote the scheme.

Joseph Aguda was the primary agent of New England in its New Orleans, Louisiana office. As such, he was involved in the sale of Taormina and Azerbaijan promissory notes and also handled claims made by noteholders in these and earlier New England "guaranteed" note programs. As such he lulled the noteholders into falsely believing that New England would fulfill its guarantees and pay them.

Craig Brown was one of the largest dealers in the sale of Taormina and Azerbaijan promissory notes. By making false representations about these projects and the ability of New England to pay the promissory notes it was guaranteeing, Brown sold notes to churches, church members and individual clients.

On June 12, 2002, Aguda, plead guilty to one count of conspiracy to commit mail fraud and to impede and impair the lawful government functions of the Internal Revenue Service, in violation of Title 18, United States Code, Section 371, a felony offense.

On December 19, 2002, Craig Brown, to one count of conspiracy to commit mail fraud and to impede and impair the lawful government functions of the Internal Revenue Service, in violation of Title 18, United States Code, Section 371, a felony offense.

This case was investigated by the Federal Bureau of Investigation, Louisiana State Police, Internal Revenue Service, Criminal Investigation Division and prosecuted by Assistant United States Attorneys Michael Magner and Tania Tetlow, along with Department of Justice Tax Division Attorney Barry Jonas.