Aug. 07, 2008                                                         Contact:Lucas Hamilton


      $147,513.33 in restitution ordered; $505,000 levied in fines
      An administrative hearing examiner has ruled in favor of the Securities Department of the Montana State Auditor’s Office in its case against Mid-America Energy, Inc., a Tennessee based oil and gas development company. State Auditor John Morrison previously issued a Cease and Desist Order and Proposed Agency Action against Mid-America as well as its president, Gary Milby and operations manager Clinton Goff after Missoula residents invested approximately $120,000 in the company. In his order, Morrison directed the respondents to halt their fraudulent activities in the state and to stop violating the Montana Securities Act.
      “Part of the mission of our office is to foster capital formation in Montana and help legitimate entrepreneurs comply with Montana law when raising money for their business ventures,” said Morrison. “We are also entrusted with the responsibility of protecting Montana investors from becoming fraud victims. We won’t tolerate unscrupulous investment promoters in Montana and I will do all that I can administratively to halt these investment abuses and will seek criminal sanctions when warranted.”
      In its previously filed action, the Montana Securities Department alleged Mid-America Energy, Milby and Goff acted fraudulently by promising incredible returns, including a 100% return on investments in 12 months and dividend checks of $3,600 each month. Montana investors identified by the Department have received nothing for their investments and have been unable to make contact with the company in over a year. About the same time Mid-America Energy was receiving investment monies from Montana investors and not living up to the promised returns, Milby threw a 16th birthday party for his daughter that was well publicized, including a feature on MTV’s “My Super Sweet 16” television show. Milby reportedly spent over $100,000 on the party and presented her with a brand new BMW as a birthday gift. The widespread scam was the focus of an extensive New York Times article earlier this spring.
      In his order, Hearing Examiner Michael Rieley found the respondents were not properly registered or licensed in Montana and they used fraudulent practices to induce Montanans to invest in Mid-America Energy. Mr. Rieley ordered respondents to pay restitution in the amount of $147,513.33 to the Montana investors and levied fines totaling $505,000 against Mid-America, Milby and Goff.
      “Time and time again we see investors harmed by the fraudulent activity of firms and their representatives,” Morrison said. “The message here is that my office will continue to enforce the law and these parties will pay the price for behavior that harms consumers. But investors should always be skeptical of any investment promoter’s claims and take the necessary steps to investigate before investing. An informed investor is the best defense against investment fraud,”
      To inquire about the legitimacy of an investment offering, Montanans can contact the Securities Department of the Montana State Auditor’s Office toll free at 1-800-332-6148.