UPDATE REGARDING JOSEPH MILANOWSKI PLEA HEARING

On January 15, 2010, United States District Judge Roger L. Hunt presided over the plea hearing in the federal criminal case against Joseph Milanowski. The United States Attorney's Office (the prosecuting branch of the federal government) and Milanowski have reached a plea agreement pursuant to which the defendant will plea guilty to one count of wire fraud, and face between 8 to 12 years in prison. The purpose of the hearing was to allow Judge Hunt to learn more about the plea agreement, and to determine whether or not to approve it. Numerous investors appeared, and several testified about how Milanowski's actions have harmed them. The United States Attorney's Office maintained to Judge Hunt that Milanowski's plea agreement was in the best interests of the victims because it provides an incentive for him to continue assisting with recovery and restitution efforts. The Judge took the matter under submission, and tentatively set a sentencing hearing for April 9, 2010, at 9:00 a.m. If Judge Hunt decides to reject the plea agreement, he will cancel the sentencing hearing, and set the case for trial. Trial would likely last several weeks, although it is unclear when it would start. If Judge Hunt accepts the plea agreement, he will address the issue of sentencing at the April 9th hearing. His primary concern is whether Milanowski's cooperation with recovery efforts will produce meaningful results for victims. If he concludes that such effort likely will not benefit investors, then he probably will reject the plea agreement. We will attend the hearing and post a report on the website thereafter.