PRESS RELEASE

For Immediate Release

March 19, 2003

United States Attorney Jim Letten, Kenneth Kaiser, Special Agent in Charge of the New Orleans Division of the Federal Bureau of Investigation, Terry Stuart, 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 New England International Surety, Inc., Omne SRL, and OMNE SRL, Inc., were sentenced to five (5) years probation and ordered the corporations to pay restitution in the following amounts: New England International Surety, Inc., $23,405,000; OMNE SRL $8,772,761; and OMNE Srl, INC., $14,632,240. In addition, all three corporations were ordered to forfeit to the United States $23,405,000 for the benefit of the victims of the fraud. Also sentenced was Jed Karpinski, 41, of Lancaster, Pennsylvania, to twelve months and a day imprisonment, for conspiracy to commit mail fraud. Karpinski was also ordered to make restitution to the victims of the fraud. Mr. Karpinski was also ordered to self-surrender on May 5, 2003.

The case stems from a joint federal-state investigation of an elaborate Ponzi scheme involving the sale of $18.8 million dollars in fraudulent promissory notes for the renovation of the Imerpiale Hotel in Taoromina, Sicily and an additional $4.5 million in promissory notes for the financing of an Azerbaijan oilfield clean and recovery business. The superseding bill 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.

Karpinski was one of the largest dealers in New England-backed promissory notes. By making false representations about these projects and the ability of New England to pay the promissory notes it was guaranteeing, Karpinski sold the notes to a large number of his clients.

On January 18, 2002, Karpinski plead guilty to one count of conspiracy to commit mail fraud, in violation of Title 18, United States Code, Section 371, a felony offense. During the sentencing hearing, it was revealed that Karpinski has already made restitution to victims in the amount of approximately $190,000.

On November 25, 2002, New England International Surety, Inc., Omne SRL, and OMNE SRL, Inc., plead guilty to one count of conspiracy to commit mail fraud, 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

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