CYBERNET FRAUD PROBE RESULTS IN FELONY CHARGES AGAINST FORMER PRESIDENT

Grand Rapids, Michigan – April 17, 2006 – United States Attorney Margaret M. Chiara announced today that federal charges have been filed against James Michael Horton for his role in committing bank fraud and other crimes while president of CyberNET. CyberNET was a company located and operating in Grand Rapids, Michigan, between 1992 and November 2004. The company collapsed after federal investigators executed search warrants at CyberNET headquarters on November 16, 2004.

Horton, age 54, of Grand Rapids, was charged with four federal felonies in a criminal Information filed in United States District Court today. The first charge alleges that Horton engaged in a criminal conspiracy with others at CyberNET to commit bank fraud, mail fraud, and money laundering, in violation of Title 18 United States Code, Section 371. The charge describes how Horton and his coconspirators are alleged to have executed a plan to deceive banks and other lending institutions, thereby amassing approximately $100 million from scores of lenders between 2002 and 2004. The charge carries a maximum penalty of five years in prison, plus fines and other penalties.

The second charge alleges Horton’s involvement in a specific episode of bank fraud, in violation of Title 18, United States Code, Section 1344, in which Huntington National Bank extended CyberNET a $17 million line of credit. This charge carries a maximum penalty of 30 years in prison, a fine of up $1 million, plus other penalties.

The third charge alleges that Horton engaged in money laundering, in violation of Title 18, United States Code, Section 1957. The information specifically alleges that Horton used $25,000 in fraud proceeds to pay a personal debt. This charge carries a maximum penalty of 10 years in prison, plus fines and other penalties.

Finally, the fourth charge against Horton is an allegation that Horton attempted to conceal the

whereabouts of $700,000 in fraud proceeds by transferring funds out of a CyberNET account on the

day federal search warrants were executed in November 2004. This charge, an alleged violation of

Title 18, United States Code Section 1956, carries a maximum penalty of 20 years in prison.

Horton will be arraigned on Monday, April 17, 2006, at 2:00 pm, before United States Magistrate Judge Timothy Greeley in Grand Rapids. Horton’s pretrial release and other preliminary issues will be discussed at that time.

The investigation of CyberNET is being conducted by criminal investigators assigned to the Grand Rapids office of the Federal Bureau of Investigation, the Internal Revenue Service, and the United States Postal Inspection Service. The case is being prosecuted on behalf of the United States of America by Assistant United States Attorney Timothy P. VerHey. The charges against Horton do not end the investigation, but no information can be provided about whether or when additional charges might be filed.

The charges against Mr. Horton are only allegations. He is presumed innocent until and unless proven guilty in a court of law.