NEWS RELEASE

Office of the United States Attorney

Eastern District of Texas

FOR IMMEDIATE RELEASEContact: Traci Kenner

DATE: November 10, 2004   Assistant United States Attorney

                                                         (903) 590-1400

PROSECUTORS AND SPECIAL AGENTS HONORED

WORK ON TELECOM 2000 CASE CITED

(Beaumont, Texas) United States Attorney Matthew D. Orwig announced today that two Assistant United States Attorneys and two federal agents have been selected to receive the prestigious Director's Awards from the United States Department of Justice. TRACI KENNER and GREGG MARCHESSAULT from the Tyler U.S. Attorney's Office and Special Agent JAMES HERSLEY with the Federal Bureau of Investigation and Special Agent BARRY HERRERA with the Internal Revenue Service-Criminal Investigations are to receive the honor for their work on the case involving Telecom 2000 Network, a telemarketing scheme.

The case involved a Tyler businessman by the name of Allen Petty, Jr. Petty perpetrated an international Ponzi scheme based in the Eastern District of Texas. During the investigation, it was revealed that from early 2000 through April, 2002, Petty operated this fraudulent telemarketing scheme throughout the United States and foreign countries by guaranteeing 500% to 1100% returns on investments. In reality, Telecom 2000 was an investment swindle in which some early investors were paid off with money put up by later investors, but ultimately over 2500 investors were defrauded of over $17,200,000.

Petty was indicted in July 2002 and went to trial in October of that same year on 98 charges of wire fraud, mail fraud, and money laundering. After an eight day trial involving 50 witnesses, Petty was convicted by a jury on all counts. Petty was sentenced to 292 months in federal prison, thought to be the longest term of imprisonment ever in a telemarketing scheme. Petty was ordered to pay $12,244,607.53 in restitution to 2216 investors who actually suffered losses.

Assistant U.S. Attorney Kenner has worked in the Tyler U.S. Attorney's Office for the last 12 years and is currently the Appellate Chief for the Eastern District of Texas. Before that, she served as a law clerk for United States District Judge Robert M. Parker, now retired. Kenner grew up in Tyler and graduated from the University of Texas at Tyler. She earned her law degree from Baylor University School of Law.

Assistant U.S. Attorney Marchessault has worked in the Tyler office for the last 15 years, primarily in the area of asset forfeiture. Before joining the U.S. Attorney's Office, Marchessault served as a Judge Advocate General for the United States Army. He graduated from the American University in Washington, D.C., and received his law degree from the University of Oklahoma School of Law.

Special Agent Hersley, a 30 year FBI veteran, worked in Tyler for 14 years. He previously served in the FBI's Chicago, Illinois Field Office. He is a native of Hereford, Texas and graduated from the University of Texas at Arlington.

Special Agent Herrera has been with IRS Criminal Investigations for 21 years. He has worked in field offices in Dallas, Fort Worth and Tyler. Herrera is from Wichita Falls and is a graduate of Southeastern Oklahoma State University in Durant, Oklahoma.

Matthew D. Orwig, U.S. Attorney for the Eastern District of Texas, says the award is most deserving, "This national award showcases some of the best cases in the entire country. It recognizes those public servants who exemplify the mission of this office. This award is a great honor, not only to these four individuals, but to the thousands in law enforcement who spend every day protecting and upholding justice for all."

The awards will be presented by the Attorney General at a ceremony in

Washington, D.C., on Wednesday, November 17, 2004.

The Director's Award is presented annually to employees of the U.S. Attorney's Offices, other agencies and divisions of the Department of Justice, other departments of the federal government and law enforcement officials from state and local agencies who undertake exceptional efforts in the pursuit of justice.