July 3, 2008                                                         Contact:Lucas Hamilton

MORRISON ANNOUNCES RULING IN FAVOR OF STATE AUDITOR’S OFFICE


      Fines and restitution of more than $350,000 ordered in securities fraud case
      
      Montana State Auditor John Morrison announced today that an administrative hearing examiner has ruled in favor of Montana’s Securities Department in its case against Roundup residents Gordon and Ann Walters and their companies, Cascade Water Holdings and Cascade Exploration, Inc. The Department’s action against the Walters’ alleged they were taking money from Montana investors to support their companies without making honest disclosures about the companies and the Walters’ ability to perform as promised. The hearings examiner concluded the Walters issued fake surety bonds that purported to be backed by the U.S. Small Business Administration and that neither of the Walters was properly registered or licensed to sell securities and the investments in their companies were also not properly registered in Montana.
      
      “The securities laws exist for a reason. Investors have to be given accurate information, companies have to be registered and investment products have to be genuine,” said Morrison. “When these laws are broken we will come down on the violators and when possible get people’s money back.”
      
      In his order, Hearing Examiner Michael Rieley found the Department was entitled to a summary judgment in its favor based on the Walters’ refusal to respond to certain discovery requests and the affidavits of many of the victims of the Walters’ fraudulent activities. Rieley fined the Walters’ and their companies $300,000 and ordered $52,240 in restitution to the victims. Danny Kegel, a named respondent entered into a settlement agreement with the Department in April of 2007 resulting in a fine of $5,000 and a permanent ban from the securities industry in Montana. Calvin Statelen, also a respondent, entered into a settlement agreement with the Department in April of 2007 resulting in a $10,000 fine, 500 hours of community service and a permanent ban from the securities industry in Montana. Both Kegel and Statelen agreed to assist the Department in its prosecution of the Walters and their companies.
      
      Before making a decision on an investment opportunity, Morrison urges Montanans to first verify the legitimacy of the offering as well as the promoter by contacting the Securities Division of the State Auditor’s Office toll-free at 1-800-332-6148 or in Helena at 444-2040.