Office of Maryland Attorney General J. Joseph Curran, Jr.

August 10, 2001 Media Inquiries: Sean Caine 410-576-6357


Baltimore - Attorney General J. Joseph Curran, Jr., announced today that his officeís Securities Division has obtained a permanent injunction order against Samuel W. Butler, Jr., Nancy J. Ford-Butler and their Bowie-based company, S.W. Butler & Associates. Samuel and Nancy Ford-Butler and S.W. Butler & Associates ("SWBA") were charged with violating Marylandís securities laws by operating a fraudulent investment scheme involving millions of dollars.

The order, issued by Prince Georgeís County Circuit Court Judge Dwight D. Jackson with the consent of the parties, also maintains a freeze of the defendantsí assets and continues the work of the receiver in gathering and accounting for investor funds. SWBA and the Butlers consented to the order, without admitting or denying violations of the Securities Act.

"This relief by the Court will permanently halt the unlawful solicitation of investors and the loss of their money," Curran stated, "It is our hope that it also may lead to the return of funds to investors."

The Securities Divisionís investigation revealed that SWBA operated an unregistered and fraudulent commercial paper investment program. SWBA sold investors interests in what was purported to be commercial paper notes. Investors were guaranteed returns of as much as 24 percent within 180 days. SWBA raised more than $1.5 million from at least 100 investors. The Securities Divisionís investigation further revealed that investorsí funds were never invested in any investment program to generate the profits promised. Instead, the investment scheme operated like a Ponzi scheme, as most of the money coming into the program was used to repay previous investors or used for the Butlersí personal expenses.

"The receiver will continue to look for assets, as well as other investors, in an attempt to return as much of investorsí money as possible," Curran explained. "This case underscores the need to verify with the Securities Division -- before you invest -- that any investment opportunity is registered and has no complaints against it."

Investors can call the Securities Division at 410-576-6360 or 888-743-0023 before they invest to find out whether their investment adviser, broker and securities are registered. Even when an investment program looks reasonable, and friends and family trust the promoter, itís better to take a few minutes to verify the status of the promoters.