U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 20379 / December 4, 2007

Securities and Exchange Commission v. C. Paul Sandifur, Jr., et al., United States District Court for the Western District of Washington, Civil Action No. CV-05-1631 JCC.

The Securities and Exchange Commission ("Commission") today announced that it has reached settlements in pending litigation against two former executives of Metropolitan Mortgage & Securities Co., Inc. ("Metropolitan"), former Chairman Chief Executive Officer C. Paul Sandifur, Jr., and former senior executive Thomas G. Turner, as well as former Metropolitan business associate Trillium Corporation and its Chairman and Chief Executive Officer David B. Syre, relating to an alleged financial reporting fraud at Metropolitan. Judgments by consent were entered for each defendant by the Honorable John C. Coughenour in the case SEC v. C. Paul Sandifur, Jr., et al., Case No. CV-05-1631 JCC, in the United States District Court for the Western District of Washington.

Metropolitan was a long-standing Spokane, Washington finance and real estate company that collapsed in 2004. Metropolitan filed for bankruptcy in February 2004, devastating nearly 10,000 investors throughout the Pacific Northwest who had invested approximately $450 million in debt securities and preferred stock offered by the company. As alleged in the Commission's amended complaint, Metropolitan's management falsified the company's 2002 financial results by reporting profits from circular real estate sales where Metropolitan purported to sell property to buyers who, in fact, received all or nearly all of the money to pay for the purchases from Metropolitan or its affiliates.

In the largest of these deals, Metropolitan reported a $10 million gain by completely financing the purchase of property by defendant Trillium Corporation, a private company based in Bellingham, Washington.

The details of the settlements for the defendants, who consented to the settlements without admitting or denying the allegations against them, are as follows:

C. Paul Sandifur, Jr., Metropolitan Chairman and Chief Executive Officer - Ordered to pay a total of $150,889.66, consisting of disgorgement of $60,000 plus prejudgment interest of $15,889.66, and a civil penalty of $75,000; permanently enjoined from violating the antifraud provisions of the federal securities laws (Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder); permanently enjoined from violating Section 13(b)(5) of the Exchange Act and Rules 13a-14, 13b2-1 and 13b2-2; permanently enjoined from aiding and abetting violations of the books and records and periodic reporting provisions (Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder); and barred from serving as an officer or director of any public company for a period of five years;

Thomas G. Turner, Metropolitan senior executive - Permanently enjoined from violating the antifraud provisions of the federal securities laws (Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder); permanently enjoined from violating Section 13(b)(5) of the Exchange Act and Rules 13b2-1 and 13b2-2; permanently enjoined from aiding and abetting violations of the books and records and periodic reporting provisions (Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder); and barred from serving as an officer or director of any public company;

Trillium Corporation, Metropolitan business associate - Ordered to pay a penalty of $75,000, and permanently enjoined from violating the antifraud provisions of the federal securities laws (Section 10(b) of the Exchange Act and Rule 10b-5 thereunder) and from aiding and abetting violations of the books and records and periodic reporting provisions (Section 13(a) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder); and

David B. Syre, Trillium Chairman and Chief Executive Officer - Ordered to pay a penalty of $50,000, and permanently enjoined from violating the antifraud provisions of the federal securities laws (Section 10(b) of the Exchange Act and Rule 10b-5 thereunder) and from aiding and abetting violations of the books and records and periodic reporting provisions (Section 13(a) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder).

Previously, the Commission reached settlements with three other defendants in this litigation: former Metropolitan Controller Robert Ness; former Metropolitan Vice President Thomas Masters; and former Metropolitan business associate Dan Sandy. See Litigation Release No. 20042, dated March 15, 2007.

The settlements announced today conclude the Commission's litigation in this matter against all the defendants except Thomas Turner, against whom the Commission will bring a motion for disgorgement and civil penalties for his role in the fraud at Metropolitan.