WWW.USDOJ.GOV

FORMER IRS ATTORNEY, FOUR OTHERS CHARGED IN MULTI-MILLION
DOLLAR SECURITIES FRAUD SCHEME

WASHINGTON, D.C. - Five men, including a former IRS attorney, were charged today with conspiring to commit securities fraud and related crimes in a scheme that allegedly resulted in losses of more than $3 million to individual investors, the Justice Department announced today.

According to the indictment, Max C. Tanner, a Las Vegas lawyer and former IRS attorney; Kevin J. Ruggiero, a Lyndhurst, New Jersey securities broker; Dennis D. Evans, a Las Vegas stock promoter; Kenneth W. Kurtz, a Salt Lake City stock promoter; and Mark A. Taylor, a Tampa, Florida stock promoter, entered into an illicit agreement to defraud investors through the sale of the stock of Maid Aide Inc., a Las Vegas company.

According to today's indictment, which supercedes a 14-count indictment unsealed on August 30, 2000, defendants began their securities fraud scheme by orchestrating a sham merger between Maid Aide and a Florida trucking company. The indictment charges that defendant Kurtz and other co-conspirators then issued a nationwide press release through Business Wire, a news service firm, announcing that a letter of intent to merge was signed between Maid Aide and the Florida trucking company in order to create the appearance of a legitimate reason for brokers and sales personnel to begin selling Maid Aide stock to the investing public.

According to the indictment, to further the scheme, defendants used a variety of means to create an artificial market demand for Maid Aide stock and manipulated the price by using registered brokers, such as Ruggiero, and cold callers posing as registered brokers, to solicit individual investors by making false and misleading statements concerning the company's business contracts, sources of income, and the true identity of the brokers selling the stock.

The indictment further alleges that excessive undisclosed cash kickbacks were paid to those brokers, in amounts equal to between 50 percent and 70 percent of the price of each Maid Aide share sold. According to the indictment, Ruggiero supervised the trading activities of all brokers at the New York City offices of a securities firm, Baxter, Bank & Smith Ltd., where most of the cold calls took place. The brokerage firm has not been accused of any wrongdoing.

The indictment alleges that Tanner used an off-shore account in the Cayman Islands to conceal his profits and promote the scheme by paying the kickbacks to Ruggiero. Ruggiero allegedly kept approximately 5 percent of the kickbacks Tanner sent to him and distributed the remainder to the rest of the brokers selling the stock. The indictment charges Tanner and Ruggiero with violating the securities, mail and wire fraud statutes, as well as conspiracy. Evans, Kurtz and Taylor are charged solely with the conspiracy.

During the course of the conspiracy, the indictment alleges, the price of Maid Aide stock went from a high of $9.37 per share in August 1998 to 13 cents per share after the defendants concluded their efforts to sell Maid Aide stock to the investing public.

In addition to the securities and related charges stemming from the original indictment, today's 37-count superseding indictment also charges Tanner with filing false individual income tax returns, tax evasion and money laundering. The indictment alleges that Tanner failed to report approximately $4 million in stock sale proceeds on his 1996 and 1997 federal income tax

returns and evaded the payment of taxes related to his sale of approximately $2 million of Maid Aide stock during 1998. The maximum penalty for violations of the securities fraud statute is 10 years imprisonment and/or a fine of not more than $1 million per count. The maximum penalty for violations of the conspiracy, mail and wire fraud statutes is five years imprisonment and/or a $250,000 fine per count. The maximum penalty for income tax evasion is five years imprisonment and/or a $100,000 fine per count and the maximum penalty for filing false income tax returns is three years imprisonment and/or a $100,000 fine per count. The maximum penalty for violations of the money laundering statute is 20 years imprisonment and/or a fine in the amount of $500,000 or twice the value of the monetary transfer, whichever is greater.

This case was investigated by agents of the Criminal Investigation Division of the Internal Revenue Service and the Federal Bureau of Investigation. The Market Regulation Department of NASD Regulation Inc. and the Securities and Exchange Commission's Division of Enforcement also provided assistance to the investigation. Trial Attorneys Marc-Philip Ferzan and Mark D. Lytle of the Department of Justice, Tax Division, Western Criminal Enforcement Section, are in charge of the prosecutions.

The factual information contained herein is taken from the indictment. The charges are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

# # #

00-550