FOR IMMEDIATE RELEASE:
May 18, 2002

Department of Justice Declines to Pay Hamilton Securities Monies Owed for
Work That Saved the Government $2.2 Billion
-------------------------------

 

On March 18, 2002, United States District Court Judge Louis F. Oberdorfer
issued a scheduling order for United States of America, ex. rel., Ervin and
Associates, Inc. v. The Hamilton Securities Group et al. (the qui tam case)
and the related case filed by Hamilton against Ervin & Associates, a
Ginnie Mae (HUD) contractor, and John Ervin, individually.

The order ends the mediation between the Department of Justice, Ervin and
Associates, and The Hamilton Securities Group without settlement. A
consolidated trial is scheduled for September, 2003 with discovery underway.

The mediation began in May 2001, shortly after a five year investigation of
the HUD loan sales program by the Department of Justice (DOJ) and the
Department of Housing and Urban Development (HUD) Office of Inspector
General into Ervin's allegations concluded with no findings of any wrong
doing. The governing statute provides for a 60 day investigation
period.

During the five year investigation, Hamilton repeatedly produced
affidavits and documents affirming the absence of any evidence
to support Ervin's allegations, including from individuals associated
with the loan sales program, affidavits of HUD auditors who
informed the government in 1996 that there was no evidence
to support Ervin's allegations and documents from FBI investigators
who informed the government in 1999 that there was no such evidence.
Hamilton also produced evidence suggesting that government
investigators tried to falsify evidence against Hamilton.

Hamilton is waiting for the Court of Claims to proceed on Hamilton's
litigation to force the government to pay outstanding bills on services
rendered by Hamilton between 1994-97 which saved the FHA Funds
at HUD $2.2 billion as calculated by the government and confirmed
by an audit of the General Accounting Office (GAO).

Hamilton's efforts to support HUD reengineering efforts were terminated
in 1997 when the government decided to return to traditionally more
expensive methods of resolving defaulted mortgages, including
growing much larger inventories of government owned and
controlled foreclosed properties.

Catherine Austin Fitts, founder of Hamilton and now President of Solari,
Inc., said, "Hamilton has given DOJ and HUD every opportunity to do
the right thing by Hamilton's shareholders and former employees,
all whom served their government, the taxpayers and communities
loyally and well. We are deeply disappointed that the government
has not paid Hamilton for work performed and rated excellent by
the government itself. We are also deeply disappointed that DOJ
declined to seek dismissal of a meritless qui tam case brought
in the name of the government despite declining to join in the case."

For more information, see http://www.solari.com/gideon. All press inquiries
should be directed to Hamilton's attorneys, Michael J. McManus or Kenneth E.
Ryan at Drinker Biddle & Reath LLP (202/842-8830, mcmanumj@dbr.com; or
202/842-8807, ryanke@dbr.com) or Catherine Austin Fitts, Solari, Inc.
(731.764.2515, catherine@solari.com)

---------------Fitts:

My understanding is that Enron and Arthur Anderson have maintained
almost all of their federal contracts and are being paid as we speak....the
comparison between me and my company and the Enron folks
is a metaphor for the fact that our federal government has become
a criminal enterprise...

==============================================================
SOLARI

February 4, 2002

A comparison of the Department of Justice's (DOJ) treatment of me and my
former company, The Hamilton Securities Group, vs. Enron and its leadership
demonstrates that federal investigators can quickly and aggressively assert
control over the records and resources of a company in a case where fraud is
alleged. Indeed, DOJ is letting the Enron money trail be shredded/sold, as
the cash slips away.

Hamilton was the lead financial advisor for the Department of Housing and
Urban Development (HUD) from 1993-97, saving $2.2 billion for the FHA
mortgage insurance funds (See "Thankless Task," Insight Magazine, May 21).
Hamilton and my personal finances were destroyed by six years of persecution
by DOJ and their HUD investigative teams all after the initial HUD audit
team reported in 1996 that Hamilton was entirely innocent of false
allegations made by a disgruntled HUD contractor, Ervin & Associates.
Insight Magazine described our investigation as an "affair many inside both
HUD and the Justice Department regarded as a political vendetta against
Fitts."

Today, nine months after that article was written, the investigation ended
and a 1999 FBI report has affirmed again that there was no evidence of any
wrongdoing, DOJ refuses to pay us $2.5 million owed for work on HUD
contracts. Here is their treatment of Hamilton:

1. Unlike Enron, Hamilton did not shred documents and provided copies
of records/back up computer tapes to counsel with assurances to DOJ that no
originals would be destroyed;

2. Unlike Enron, Hamilton's government contract was cancelled
immediately and DOJ seized monies owed claiming a "common law right to
set-off " justified by fear that we might go out of business;

3. Unlike Enron, they insisted on control of all records in case of a
bankruptcy (which never occurred);

4. Unlike Enron, investigators used the mere possibility of fraud as
a pretext to demand control of all Hamilton records;

5. Unlike Enron, they insisted on control of all records before any
sale of assets. Indeed, their seizing of digital records destroyed much of
Hamilton's proprietary on line databases and software tools;

6. Unlike Enron, DOJ communicated openly that they had the right to
seize personal assets of Hamilton management and agents;

A comparison begs the question, "Why is DOJ standing down, while the
criminals get away with the cash?"

Catherine Austin Fitts

President, Solari

Former Assistant Secretary of Housing-Federal Housing Commissioner, First
Bush Administration

Former Managing Director and member of the board, Dillon Read & Co. Inc.

For supporting legal documentation, summary of events, and related press,
see:

http://www.solari.com/gideon

Questions:

Catherine Austin Fitts
Solari
731.764.2515
catherine@solari.com

Michael McManus, Esq.
Drinker Biddle & Reath
202.842.8830
Michael_McManus@dbr.com

---------end forwarded posts

More on related intelligence agency corruption involving support of
illegal drug trade, 911 complicity, etc., at http://www.copvcia.com

or see The CIA Has the Real Dope- by Preston Peet

Outrage by Preston Peet

Outrage pt. 2 by Preston Peet

Police Drug Corruption by Preston Peet