November 13, 2008                                                         Contact:Lucas Hamilton

COMPANIES FINED OVER $1-MILLION, RESTITUTION TO VICTIMS NEARLY $300,000


      STATE AUDITOR MORRISON ISSUES FINAL AGENCY DECISION
      State Auditor John Morrison has issued a Final Agency Decision 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. They also issued fake surety bonds that purported to be backed by the US Small Business Administration. 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.
      
      “This type of scam is the reason that investors should always be wary and check the facts before investing. Our offices help people find the facts they need on scams like these everyday. I always encourage investors to investigate before they invest,” said Morrison. “At the very least investors should always make sure that companies are properly registered and licensed in the state.”
      
      Previously, 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. In the Final Agency Decision, the Walters’ and their companies were fined $1,010,000 and ordered to pay restitution totaling $280,654 to the victims.
      
      Other named respondents in the action previously settled with the Department. Danny Kegel 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 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.