$6.2 million here, $6.2 there, pretty soon you are talking REAL money.

That's just plain scary!

Bank Gives Up on Lost Money, Reassigns CFO

After five months of trying to figure out why it couldn't find $6.2 million recorded on
its books, a bank has given up, restated its previous financial results, and reassigned
its CFO.

On Monday, Willow Financial Bancorp filed an amended annual report for its 2007 and 2006
fiscal years. To make up for the missing $6.2 million, the firm recorded it as a charge to
earnings for the first two quarters of fiscal-year 2006, when its "out of balance
condition first arose."

The holding company for Willow Financial Bank, a Pennsylvania community bank with $1.6
billion in assets, Willow Financial Bancorp announced in November that it had a problem.
It then spent more than $2 million over five months in "exhaustive efforts" to figure out
what had gone wrong but wasn't able to properly correct its previous accounting entries,
the bank said in its amended annual report.

[ CFO.com: http://tinyurl.com/3u7lbw ]

Senator’s Ties to Real Estate Draw Criticism

TUSCALOOSA, Ala. — He has made millions as a title insurance executive, landlord and
real estate developer in this college town, where the economy, despite trouble nationwide,
is still growing nicely. Now, as a United States senator, with the mortgage mess fueling a
national economic slowdown, Richard C. Shelby has more say over the revamping of housing
finance laws than almost anyone else in Congress.

Mr. Shelby, 74, does not run a key Congressional committee. Instead, as the ranking
Republican on the Senate Banking Committee, he is using his clout and the Democrats’
slim majority in the Senate to help determine what gets in, or almost as important, what
is left out, of legislation.

He will soon play a major role in deciding the fate of one such bill, to help struggling
homeowners, that the House passed, 266 to 154, on Thursday.

But over the years, his critics say, Mr. Shelby’s ties to the mortgage industry and the
Alabama real estate market, and the generous campaign donations he receives from financial
services companies, have distorted his perspective and led him to delay critical
legislative remedies.

Indeed, Mr. Shelby’s legislative and business worlds have often intersected. For
instance, while on the Banking Committee, he financed an apartment complex he owns in
Tuscaloosa with a $5 million loan from Freddie Mac, the same government-sponsored mortgage
company whose regulation his committee is reshaping.

Even his efforts to steer federal money to the University of Alabama, where a recently
built $60 million science building is named after Mr. Shelby and his wife, Annette, have
benefited him. The tens of millions in earmarks have helped the university, his alma
mater, grow and attract more students. The tenants of his apartment complex are mostly
students.

Mr. Shelby said in an interview his business dealings posed no conflict.

“It doesn’t affect me at all. I’m going to put the interests of the nation first,”
he said. His stubbornness over housing laws, he said, stems from his free-market
philosophy and opposition to using tax dollars to bail out people who acted recklessly.
“We can’t bail out everything,” he added.

Others see it differently. “Senator Shelby would have prevented anything going through
that the industry was not happy with,” said Representative Brad Miller, Democrat of
North Carolina, who has pushed legislation to crack down on predatory lending, an effort
that has stalled in the Senate in part because of Mr. Shelby’s reservations. “That’s
the sense from all the people who are involved in the issue.”

Representative Barney Frank, the Massachusetts Democrat who leads the House Banking
Committee and has won points for working with the Bush administration on housing issues,
said he had been surprised by Mr. Shelby’s unwillingness to accept several proposals
like a permanent increase in the cap to $730,000 from about $360,000 on home loans that
can be federally insured.

“I think he has been the major obstacle,” Mr. Frank said, calling it “a serious
problem in getting things done.”

The son of an Alabama steelworker, Mr. Shelby was elected to the House in 1978, after
working as a trial lawyer, prosecutor, magistrate and state senator in an
up-by-the-bootstraps career that saw him earn a wide political base as a conservative
Democrat in the deep South.

Eight years later, he won election to the Senate, but his ties to the Democratic Party
ruptured with Bill Clinton’s election to the White House in 1992. Mr. Shelby blasted Mr.
Clinton for what he considered his liberal tax-and-spend ways, and in 1994 he became a
Republican, a split that caused lingering tensions with former colleagues.

A tall, imposing man, Mr. Shelby has adopted a much lower profile in the last few years
after he and his office were the targets of an F.B.I. criminal investigation into the
possible leak of classified information concerning a National Security Agency intercept on
Sept. 10, 2001, indicating possible terror attacks in the works. No one was charged in the
case, but the leak provoked tensions with the White House.

Mr. Shelby has become considerably richer in his years in Congress, with a net worth of $9
million to $32 million, according to his 2007 financial disclosure form.

The single biggest source of his new wealth is the 124-unit apartment complex — complete
with a pool and a tennis court — that he built in Tuscaloosa with his wife in 1995 on
land that had been assessed at a few hundred thousand dollars. Now, with the 13 new
apartment buildings, it is worth nearly $8 million, property records show.

The financing on the apartments, Yorktown Commons, a few miles from the University of
Alabama, shows the complications of serving on the Senate Banking Committee while also
developing real estate.

A $5 million mortgage on the apartment complex, arranged in October 2002 by the Reilly
Mortgage Group of Virginia, now owned by Wells Fargo Bank, was financed by Freddie Mac.
Mr. Shelby said he did not know Freddie Mac would assume his loan. “This was just a
plain-vanilla commercial loan,” said a Wells Fargo official, who asked not to be named
because bank rules prohibit public discussion of loans.

While serving as chairman — a post he held until Democrats took control of Congress in
2007 — and more recently as the ranking Republican, Mr. Shelby has called for allowing
Freddie Mac’s regulator to demand increases in the capital cushion the company must keep
to back up its own debt and the mortgages it guarantees.

But Mr. Shelby has for years blocked legislation that would have restrained Freddie Mac
and its sibling, Fannie Mae, on the grounds that the bills did not go far enough. In doing
so, the mortgage financiers were able to expand rapidly. His positions on other housing
issues have frequently been in line with those advocated by the Mortgage Bankers
Association, whose legislative agenda was devised in part by Tom Szydlowski, a senior
executive at Reilly Mortgage, the bank that arranged Mr. Shelby’s $5 million loan and
sold it to Freddie Mac. Mr. Szydlowski joined Reilly a month after the loan to Mr.
Shelby.

The Mortgage Bankers Association and Mr. Shelby opposed a provision in a Senate bill
debated this spring that would have allowed bankruptcy judges to lower the principal on
certain loans for homeowners facing foreclosure. Housing advocates viewed the provision as
their highest priority, but Mr. Shelby and the mortgage bankers argued it would push up
lending costs. It was removed from the measure.

Mr. Shelby and a spokesman for Mr. Szydlowski said there was no relationship between Mr.
Shelby’s legislative views and the loan. What guides his positions, Mr. Shelby said, is
his confidence in free markets, tempered by proper government oversight and disclosure
requirements.

“I want the market to work if it can, and most of the time it will, but not without some
pain,” Mr. Shelby said in an interview.

But Bill Buzenberg, executive director of the Center for Public Integrity, a Washington
ethics group, said Mr. Shelby should not be playing a central role on legislation that
would affect mortgage bankers and Freddie Mac.

“Even if everything is by the book, it looks bad, it just smells,” Mr. Buzenberg
said.

Questions about the intersection of his two careers, in real estate and politics, have
come up before. Just two blocks from the county courthouse here is the headquarters of
Tuscaloosa Title, a real estate title insurance company Mr. Shelby has controlled since
1974.

When the Department of Housing and Urban Development in 2002 proposed rules to save
homebuyers hundreds of dollars in closing costs by allowing a single, discounted package
that would include items like the appraisal and title insurance, Mr. Shelby objected,
saying the rules would hurt small businesses. Tuscaloosa Title, in a one-story office
building that he owns, employs about a dozen people.

“Only the larger institutions would have the market power and volume of business that
would permit them to offer volume discounts,” he said in a 2003 speech to the National
Association of Mortgage Brokers.

The agency, under pressure from Congress, ended up withdrawing the proposal.

Since his early days in Congress in the 1980s, Mr. Shelby has won support from the banking
industry, collecting fees for speeches before industry groups and, since 2000, raising
nearly $1 million from industry powerhouses.

On occasion, the timing of the contributions and Mr. Shelby’s official positions have
overlapped. Last June, Mr. Shelby pronounced in a television interview that Congress
should not increase the taxes on private equity firms like Blackstone Group.

Six days later, campaign finance records show, Mr. Shelby collected nearly $25,000 in
donations from Blackstone executives. Mr. Shelby said executives at Blackstone have long
supported him. “That is not relevant to any decision I made, whether I raise money or
don’t raise money,” he said.

Mr. Shelby, who has a reputation on Capitol Hill as a populist, has also taken certain
positions that have alienated the banking and financial worlds and earned him admirers
among some Washington consumer advocates. He has been particularly dogged in fighting for
goals like privacy protections on the financial information of consumers and corporate
reporting requirements.

“I’m on the taxpayers’ side,” Mr. Shelby said in the interview.

Whatever the issue, the Democrats’ slim majority in the Senate helps explain Mr.
Shelby’s outsize influence. There are 49 Democratic senators and two independents who
usually vote Democratic, but Senate rules require 60 votes to cut off debate on
controversial legislation. Democrats realize they need Mr. Shelby to pass a deal.

“He may be slow, he may be cautious, he may be frustrating,” said Senator Christopher
J. Dodd, Democrat of Connecticut, who is the Banking Committee chairman. “But once he
makes the deal, it happens.”

[ New York Times: http://tinyurl.com/5n7ppj ]

Legislator asks DEA to explain pot club raids

A congressional leader, citing complaints from Bay Area mayors and lawmakers, wants the
Drug Enforcement Administration to explain its increased use of "paramilitary-style
enforcement raids" and property forfeiture orders against medical marijuana patients and
suppliers in California.

With drug trafficking and violence from international cartels on the rise, "do you think
the DEA's limited resources are best utilized conducting enforcement raids on individuals
and their caregivers who are conducting themselves legally under California law?" House
Judiciary Committee Chairman John Conyers, D-Mich., said in a letter to the agency.

He also noted the DEA's recent tactic of sending letters to hundreds of property owners
who rent to medical marijuana dispensaries, advising them that they could be prosecuted
and lose their property under federal law.

Property forfeitures, Conyers said, have typically been reserved for "the worst drug
traffickers and kingpins" and might have the unintended effect of driving medical
marijuana distribution underground. Medical marijuana advocacy groups say the letters have
led to evictions and closures of dozens of supply shops that had been operating with state
and local approval.

The congressman also asked how much the DEA was spending on the raids.

The letter, dated April 29, was addressed to the DEA's acting administrator, Michele
Leonhart. Agency spokeswoman Rogene Waite declined to comment on the questions Wednesday,
saying only that "the federal government does not recognize medical marijuana. ... The
DEA, of course, would be part of the federal government."

Conyers attached a copy of a resolution approved by San Francisco supervisors in February,
attacking the DEA for "its irrational policy and hysteria" and calling on the city
attorney to support property owners facing prosecution or forfeiture for renting to
medical marijuana dispensaries. The Los Angeles City Council also has condemned the
federal agency's actions.

Conyers also cited statements by San Francisco Mayor Gavin Newsom and Oakland Mayor Ron
Dellums criticizing the DEA, and a resolution introduced by state Sen. Carole Migden,
D-San Francisco, urging that Congress pass a law ending federal raids and prosecutions in
states that have legalized medical marijuana.

[ San Francisco Chronicle: http://tinyurl.com/4kpza3 ]

City of Vallejo, CA declares bankruptcy,
But vows to keep services afloat


In the wake of Vallejo's historic bankruptcy decision, city officials Wednesday assured
residents that municipal services will continue uninterrupted and that a move to court
will begin immediately.

The City Council late Tuesday unanimously agreed to seek bankruptcy protection, after two
months of intensive mediation sessions with employee unions failed to produce a long-term
fiscal plan.

"It's important to note that we're going to continue providing city services. There will
be no difference," public information officer JoAnn West said. "We're going to continue
paying employees and continue to pay our vendors. None of that will change."

Mayor Osby Davis pledged Tuesday night to look at restructuring city government
operations. He said that residents will be asked to approve tax increases and other
revenue enhancements.

"The most important thing, irrespective of the filing, is that we are going to turn our
financial condition around," he said. "We've taken control of our finances to turn this
city around and we will prosper." He added that labor negotiations will play a key role
through the process.

Meanwhile, bankruptcy attorneys and public pension watchdog groups predicted that cities
hit by the housing mortgage crisis and weak revenues will closely watch Vallejo's entrance
into uncharted waters.

Just how much the state of California — facing its own deficit — will take from local
coffers may become known when the governor presents his revised budget proposal
Wednesday.

Besides unaffordable labor contracts, Vallejo has been hit hard by the weakened housing
market, plunging property values, loss of sales tax and state raids on local revenues.

State Sen. Pat Wiggins and Assemblywoman Noreen Evans said Wednesday that while they had
wanted Vallejo to avoid bankruptcy at all cost, they will try to help the city. Wiggins,
D-Santa Rosa, suggested grants as well as sales tax money from Proposition 172 as ways the
state might lend a fiscal hand.

"I'm very concerned other cities will take a look at Vallejo and follow suit. They've made
it easier for other cities to do the same thing," Evans, D-Santa Rosa, said.

Marcia Fritz, vice president for California Foundation for Fiscal Responsibility, and
bankruptcy experts Nick Kajonz and Sajan George said that bankruptcy will give Vallejo
time to rework expensive labor contracts and devise a budget it can afford.

The bankruptcy process will open labor contracts and negotiations to scrutiny, Fritz
said.

Next week, bankruptcy attorneys will petition the U.S. Bankruptcy Court for the Eastern
District of California in Sacramento.

On July 1, public safety employees are slated to get a 5.5 percent raise and other
employee groups a 3 percent raise.

Employee wages will be frozen at current levels, and 6 percent salary rollbacks that
unions agreed to in March could be restored, she said.

Over the next three years, public safety employees would have received a 21.4 percent pay
increase and electrical workers a 10 percent increase.

While employee costs have increased 11 percent annually, revenues have only kept pace by 2
percent, finance director Rob Stout said.

A Vallejo police captain earns $306,583 in salary and benefits while a police lieutenant
gets $240,146.

A Vallejo fire captain earns $206,890 while a firefighter earns an average of $171,250,
according to a city financial report.

The city will seek permission to impose labor contract modifications until the court can
rule on a city request to reject the current agreements.

The city must present an initial showing of insolvency and also prove it cannot pay its
debts as they become due, the city's bankruptcy attorney told the council Tuesday.

Vallejo's creditors, including city employee groups, may then challenge the city's
actions.

Depending on how long the proceedings last, bankruptcy costs are expected to be $750,000
to $2 million.

[ The (San Jose) Mercury News: http://tinyurl.com/5wpcwu ]

Ex-Monster Controller Faces Option Backdating Charges

SEC also cites former President;
In a separate suit, both execs hit with federal criminal charges

The Securities and Exchange Commission charged the former controller and the former
president of Monster Worldwide Inc. for their alleged roles in a multiyear scheme to
secretly backdate stock options for thousands of Monster officers, directors, and
employees.

Separately, Treacy was charged with criminal securities fraud and conspiracy in connection
with the backdating of millions of dollars' worth of employee stock option grants in a
two-count indictment, according to Michael Garcia, U.S. Attorney for the Southern District
of New York.

The SEC complaint alleges that former Monster president and chief operating officer James
J. Treacy, along with former controller Anthony Bonica, participated in a scheme that
began in 1997. The company stock options were fraudulently backdated to coincide with the
dates of low closing prices for the New York-based company's shares, the SEC said.

According to Garcia, Treacy conspired with other former senior executives at Monster to
systematically backdate stock option grants to Monster employees between 1997 and 2003, in
an effort to provide profitable options to employees without recording the required
compensation expenses, thereby falsely inflating Monster's earnings. As a result,
Monster's public filings with the SEC between 1997 and 2005 fraudulently understated the
company’s compensation expenses by a total of more than $300 million, the US Attorney
added.

The SEC's complaint alleges that Treacy and Bonica personally benefited from the
fraudulent scheme by receiving and exercising backdated grants of in-the-money options.

Treacy himself allegedly received in excess of one million options (adjusted for a stock
split and a spin-off of a Monster division) on eight different grant dates. He exercised
about 745,000 of these options for a total gain of more than $23 million, approximately
$13.5 million of which was derived from the in-the-money portion of backdated option
grants.

If convicted, he faces a total maximum prison sentence of 20 years on the substantive
securities fraud count and five years on the conspiracy count. In addition, on each count,
he faces a fine of the greater of $250,000 or twice the gross pecuniary gain or loss from
the offense.

In January, the U.S. attorney indicted former Monster CEO Andrew McKelvey for
backdating-related securities fraud and conspiracy, citing a resulting $300 million of
inflated earnings in the company's understatement of compensation expenses. While the
government said McKelvey accepted responsibility for his participation in the scheme, the
U.S. chose to defer prosecution because he has a terminal illness.

[ CFO.com: http://tinyurl.com/5vew7n ]

A New Wave of Vilifying Short Sellers

In the days when square-rigged galleons plied the spice route to the East, the Dutch
outlawed a band of rebels that they feared might plunder their new-found riches.

The troublemakers were neither Barbary pirates nor Spanish spies — they were certain
traders on the stock exchange in Amsterdam. Their offense: shorting the shares of the
Dutch East India Company, purportedly the first company in the world to issue stock.

Short sellers, who sell assets like stocks in the hope that the price will fall, have been
reviled ever since. England banned them for much of the 18th and 19th centuries. Napoleon
deemed them enemies of the state. And Germany’s last kaiser enlisted them to attack
American markets (or so some Americans feared).

Now short sellers are drawing fire once again, this time from some unexpected quarters.
Across the world, these market bears are being accused of spreading rumors, persecuting
companies and unsettling entire economies. Even on Wall Street, where money is seen as the
ultimate measure of success, some wonder whether the shorts have gone too far.

Some Wall Street executives question whether unscrupulous short sellers caused the
collapse of the investment bank Bear Stearns this year. Others complain that shorts have
been telling lies about other major firms in an attempt to sink stock prices.

The uproar has drawn the attention of Washington. “This goes beyond rumors,” Senator
Christopher J. Dodd said at a recent Senate hearing about Bear Stearns. “This is about
collusion.”

Short sellers dismiss the idea that they killed off Bear Stearns. They say they often get
the blame when things go wrong in the markets.

“Show me the evidence,” said James S. Chanos, one of Wall Street’s most prominent
short sellers. “It’s always easier to blame someone else, some unnamed market force
than the people responsible.”



James S. Chanos, a well-known short seller


Whatever the case, short sellers are coming under scrutiny. British regulators are looking
into rumor mongering in London, Europe’s financial hub. The Financial Services Authority
there recently took the unusual step of announcing that it would investigate how
scuttlebutt spreads through the city. The regulator made it clear that it would cast a
wide net to snare those who start what Sally Dewar, an F.S.A. managing director, called
“completely unfounded rumors.”

Market watchdogs in Iceland, meantime, are looking into whether short sellers are behind a
plunge in that tiny nation’s currency, the krona, which has lost a quarter of its value
this year. Their counterparts in Ireland have started investigations into short selling
and market rumors, too.

And in the United States, concern about short sellers’ growing power gained new urgency
last week when the Securities and Exchange Commission accused a former trader of spreading
rumors about a big takeover and then profiting from the ploy.

Granted, most kinds of short selling are perfectly legal. To sell short, traders typically
borrow assets like stocks and sell them. If the price falls, the trader buys back the
shares at a lower price and profits from the difference. Short sellers have always been
viewed with suspicion because their style of trading seems to run counter to the essential
optimism of the markets. After all, they win when other investors lose.

Short selling is drawing a lot of attention partly because it has become so prevalent. On
the New York Stock Exchange, short selling is running near record levels. Just over 4
percent of all the shares on the Big Board were sold short as of March.

That figure, however, excludes many rapid trades made every day. Market makers, for
example, often go short to ensure customers’ orders are filled quickly. And most hedge
funds take short positions to offset their other bets in the markets. So, in all, short
selling probably accounts for a quarter or more of all trading.

But another reason that shorts are drawing fire is that hedge funds that specialize in
this kind of trading are making money — lots of it — at a time many other investors
are losing. On average, short funds returned 7.43 percent during the first three months of
this year, according to Hedge Fund Research, while the Standard & Poor’s 500-stock index
fell almost 10 percent. And one hedge fund manager, John Paulson, made a staggering $3.7
billion last year by betting against subprime mortgages and the companies that make such
home loans.



John Paulson


Many Wall Streeters have long argued that short selling is healthy for the markets. The
practice tempers investors’ exuberance and helps market participants value securities
properly. In the past few years, shorts warned about the troubles brewing at Enron and
Tyco and also uncovered financial shenanigans at many small companies. As the financier
Bernard M. Baruch once said, “A market without bears would be like a nation without a
free press.”

Owen A. Lamont, a finance professor at the Yale School of Management, studied a group of
companies that battled with short sellers and found that those companies’ share prices
fell 42 percent on average over the next three years, suggesting their share prices were
inflated, just as the shorts had claimed.

“When there is a big decline in the market, short sellers are often blamed,” said Mr.
Lamont, who is also a money manager at DKR Capital Partners, a hedge fund.

Shorts certainly were criticized when Bear Stearns collapsed in March after what was
essentially a bank run. Speculation about a cash shortage drove Bear stock down almost 60
percent in a few days, a decline that coincided with a surge in short bets against the
firm’s stock. Alan D. Schwartz, the chief executive of Bear, later said that malicious
rumors helped fuel the panic.

Other Wall Street banks have also been buffeted by short sellers this year. Shares of
Lehman Brothers fell almost 40 percent the day before that investment bank reported
earnings in March. “We are suspicious that the rumors are being promulgated by short
sellers of our stock that have an economic self-interest,” a Lehman spokeswoman said at
the time.

But Wall Street deals in rumors all the time. For regulators, the challenge is proving
that short sellers tried to profit by spreading false information.

The complaint filed last week by the S.E.C. provides a rare glimpse into the Wall Street
rumor machine. The commission said Paul S. Berliner, a trader for the New York trading
firm Schottenfeld Group, used instant messages to spread rumors that the Blackstone Group
was considering lowering its price for Alliance Data Systems, which it had agreed to
acquire for about $6.4 billion last year.

“Hearing the board is now meeting on a revised proposal,” Mr. Berliner wrote shortly
after 1 p.m. on Nov. 29. “Blackstone is negotiating a lower price.”

Mr. Berliner then began selling short 10,000 shares of Alliance Data, the S.E.C. said. As
the stock fell, he turned a profit of $25,000 within 10 minutes on his short positions.

[ The New York Times: http://tinyurl.com/4vvvzt ]

The FBI has raided businesses connected to a member of the Jacksonville Port Authority
board, seizing records from companies he leads and from companies doing business with the
port.

In separate raids conducted Wednesday, agents searched the offices of Muirfield Partners
Inc. and the First Coast Black Business Investment Corp., two businesses led by Tony
Nelson, former board chairman and now vice chairman of the Port Authority. Agents also
conducted interviews with senior JPA staffers.

Nelson did not respond to phone messages left Friday at either of the businesses searched
by the FBI. But his lawyer said Nelson "was as surprised as anyone" by the raids.

Authorities also seized documents from Subaqueous Services Inc., a dredging company that
has received millions of dollars in port contracts, including a $12 million no-bid
contract last year, and Rham Construction, which has a no-bid contract to oversee ongoing
construction of a terminal at the port.

[ Times-Union: http://tinyurl.com/6x4ses ]

Feds seize $13.3M in property they say Orlando venture capitalist embezzled

The federal government seized $13.3 million of real estate from Orlando venture capitalist
Frank L. Amodeo on Friday, alleging he bought the properties with funds embezzled from the
now-crumbled Mirabilis Ventures business empire.

A civil-forfeiture suit filed in federal court accuses Amodeo and unidentified
conspirators of stealing nearly $182 million in payroll taxes and $5 million in
workers-compensation-insurance funds from companies Mirabilis or Amodeo did business with
from October 2004 to March 2008.

Some of that money was used to buy three residences in Orlando, along with buildings and
property in Richmond, Va.; Chattanooga, Tenn.; and Huntsville, Ala., the government said.

No criminal charges were filed, but the lawsuit alleges that Amodeo engaged in theft, tax
fraud, wire fraud and money-laundering with funds taken from payroll-outsourcing companies
that he and Mirabilis controlled.

Amodeo, 47, is a disbarred Georgia bankruptcy lawyer who served time in federal prison for
fraud in the 1990s. He began assembling companies under the Mirabilis name in 2005. At one
point, Mirabilis owned 70 businesses, all of which the IRS contends were purchased with
stolen money.

"We seized the assets to insure that the money goes to repay the IRS some of the $182
million in employment taxes that was not turned over to the government," said Assistant
U.S. Attorney Randy Gold, leader of the investigation.

The suit ties up the title to the properties so they cannot be liquidated or sold. IRS
agents have used the same tactic many times in the past as a prelude to filing criminal
charges.

Amodeo's criminal-defense lawyer, Harrison "Butch" Slaughter, said Amodeo will surrender
his BMW and Mercedes-Benz to the IRS on Monday. A private jet that is being sold or the
proceeds of that sale also will be turned over to the government, he said.

Money that Amodeo paid to law firms to represent him in various litigation also is being
seized because the government says it is tainted, Slaughter said, but the lawyer insisted
he was not paid with disputed money.

Court records show the government also wants a 2006 Harley-Davidson motorcycle, apparently
purchased for $40,000 at a charitable auction hosted by Orlando Mayor Buddy Dyer in April
2006.

The suit, based on an affidavit by IRS criminal investigator Steven McCabe, alleges that
Amodeo and associates looted income and other taxes collected in the course of business by
companies he and Mirabilis controlled, including Presidion Solutions, the Sunshine
Companies, Paradyme and AEM Inc.

[ Orlando Sentinel: http://tinyurl.com/6g9sf6 ]

A Montreal penny-stock promoter has been charged in North Carolina with securities fraud
for his alleged role in a $23.4-million U.S. pump-and-dump scheme.

State authorities laid conspiracy and money laundering charges this week against Bryan Kos
and American David Hagen after a grand jury returned a two-count indictment.

The charges come just more than a year after the U.S. Securities and Exchange Commission
imposed fines on the Montrealer and another u.s. colleague, Donald Oehmke, of $650,000 and
$1.5-million, respectively, for fraudulently selling shares in public companies.

In a 29-page indictment, the U.S. attorney in Charlotte, N.C., alleges that Kos and Hagen
-- who was convicted in 1990 of mail and bankruptcy fraud as well as money laundering --
earned $23.4 million by artificially creating demand for shares in virtually worthless
companies between 2003 and 2006.

Those companies included BodyScan, Twister, Absolute Health, Concorde, BioHeal and GTX
Global. Hagen was GTX's chief executive, according to the indictment.

[ Montreal Gazette: http://tinyurl.com/5x7gjy ]