Important Updates

August 5, 2008

On August 1, 2008, the Receiver mailed to each investor holding an approved claim the second of three planned Vavasseur distribution checks. If an investor holding an approved claim did not receive funds from the first Vavasseur distribution last year, the amount of the check will be the combined amount due for the first and second distributions.

The Receiver’s total distributions to date represent approximately seventy percent (70%) of the funds recovered to date. Funds have been reserved to cover the claim of the U.K. Liquidators as an Investor Receiver, which constitutes the single largest claim filed, pending its final determination. Resolution of this and other outstanding matters may materially affect the amount to be divided in the final distribution.

The amount and the timing of the Receiver’s final distributions will depend upon the amount of the U.K. Liquidators’ claim, which will not be known until the U.K. Liquidators receive U.K. Court approval of the settlement agreement and the U.K. Liquidators run their claims process. Assuming the U.K. Court approves the settlement agreement, the Receiver will make an interim distribution to the U.K. Liquidators which will enable the U.K. Liquidators to officially start their claims process. The Receiver’s final distributions, which will be all remaining recovered funds, will occur after the U.K. Liquidators complete their claims process. The Receiver believes its final distributions will occur in the Spring of 2009.

Status of Criminal Cases are as follows:

Terrence Lee Dowdell (aka Terry L. Dowdell)(considered the mastermind of the Vavasseur scheme) pled guilty to securities fraud and wire-fraud, and was sentenced on July 21, 2004 to a fifteen (15) year prison term.

Shinder Singh Gangar and Allen White (partners in Dobb White & Co.) were convicted in the UK of conspiracy to defraud and conspiracy to corrupt, and were each sentenced on February 22, 2008 to a seven and a half (7½) year prison term.

Mary Ellen Dowdell (Terry Dowdell’s wife) pled guilty to conspiracy to commit wire-fraud, and was sentenced on March 3, 2008 to a five (5) year prison term, and upon release from imprisonment, supervised release for a term of three (3) years.

Rebecca Lynn Dowdell (aka Becky Dowdell)(daughter of Terry Dowdell and Mary Dowdell) pled guilty to conspiracy to commit wire-fraud, and was sentenced on March 24, 2008 to probation for a term of three (3) years. Defendant was ordered to pay criminal restitution to the Receiver in the amount of $20,000.00, plus interest, due in monthly installments of $100.00 commencing 60 days from entry of the judgment.

Gregory Smyth and Mark Smyth pled guilty to aiding and abetting to commit wire-fraud, and were sentenced on March 3, 2008 to a Thirty-seven (37) month prison term and Forty-four (44) month prison term, respectively, and upon release from imprisonment, supervised release for a term of three (3) years. Defendants were each ordered to pay criminal restitution to the Receiver, with joint and several liability, the amount of $775,030.00, without interest, due in monthly installments of $25.00 each while in the custody of the Bureau of Prisons, increasing to monthly installments of $200.00 each during the term of supervised release, commencing 60 days after release from imprisonment.

Michael Julius Hardesty (associated with Hatchlands Finance, Ltd.) pled guilty to securities fraud, and was sentenced on March 3, 2008 to a sixteen (16) month prison term, and upon release from imprisonment, supervised release for a term of three (3) years. Defendant was ordered to pay criminal restitution to the Receiver in the amount of $610,000.00, without interest, due in monthly installments of $25.00 for a period of sixteen (16) months, commencing 60 days from entry of the judgment, increasing to monthly installments of $200.00 during the term of supervised release, commencing 60 days after release from imprisonment.