OFFICE OF THE COMPTROLLER DEPARTMENT OF BANKING AND FINANCE STATE OF FLORIDA CENTRAL FLORIDA REGIONAL OFFICE
ROBERT F. MILLIGAN COMPTROLLER OF FLORIDA

June 12, 2001

Dear Investor:

This letter is to advise you regarding the Department's role in this matter and the possible methods and sources of restitution of your investment funds.

The Department recently filed administrative complaints against 16 businesses and 114 individual agents who sold the unregistered securities being certificates of interest in viaticated insurance benefits through American Benefits Services, Inc. (ABS). In the course of prosecuting these cases and working with the bankruptcy trustee, the Department will make every effort to cooperate with and to help investors and victims recover a portion of their investment funds.

The Department enforces Florida's securities laws. These sales violated Chapter 517, Florida Statutes, known as the Florida Securities and Investor Protection Act. The Department seeks to punish those persons who disregarded the securities laws and the Department is seeking recovery of funds for investors and victims. In the prior case against Ray Levy and ABS, the Department was successful in recovering and returning $900,000 to certain investors in the monthly interest program.

Florida law authorizes the Department to impose administrative fines not to exceed $5,000 for each violation. All fines collected are required to be deposited in the state's Anti-Fraud Trust Fund. It is not realistic to expect that the Department will be able to collect the maximum amount from each business and agent just as it is not always possible to collect all the money awarded in all civil judgments. The Department is in the process of reaching stipulated settlements with a majority of the businesses and agents to make a restitution payment(s) to the Trustee for the benefit of all investors and victims. The Department is working with the Trustee in these endeavors. The Department encourages financial restitution to recover as much money as possible for the investors in each case.

Independent of these actions, investors and victims are authorized by law to seek rescission of the purchase agreements by filing private civil actions against the ABS businesses and agents to obtain civil judgments.

For those investors who bought through a registered securities agent, the securities law has in place a Securities Guaranty Fund (Sections 517.131 & .141, Florida Statutes) that provides for the recovery of certain losses to investors. The person had to be registered and operating within the purview of Chapter 517, Florida Statutes, at the time of making the sale. This Fund provides for recovery payments of up to $10,000 per a victim's claim with a cap of $100,000 for all claims made against a registered person. You must first obtain a civil judgment against the registered dealer, investment advisor, or associated person who sold you the investment. Then you must try to collect on the civil judgment. If you cannot collect on the civil judgment, then file a petition with the Department for payment from the Fund. The Department will review all petitions received and grant the maximum allowable limits of all valid petitions for payment from this Fund. There is a statutory two-year waiting period before payment can be made from the Fund.

In the criminal cases that have been filed, the court could order restitution as part of a successful prosecution. The Department continues to be available to assist in the criminal prosecutions.

You are reminded that if you bought this investment through an insurance agent, you might be entitled to a recovery directly through the agent. Ask the agent for the name and telephone number of the agent's Errors and Omissions Insurance carrier and then file a claim for your losses with that E & O insurance carrier.

For further information, you may call the Department at (407) 245-0760 or within Florida 1-800-342-2247; the Office of the United States Attorney, Victim Witness Unit at toll free number 1-800-379-4643; and John W. Kozyak, Trustee/Restitution Receiver, at (305) 372-1800. On the Internet, please go to the Department's Central Florida Regional Office website at www.cfro.org/; and to the Department of Justice website at www.usdoj.gov/usao/fls/.

In closing, we strongly suggest that you consult with an attorney engaged in the private practice of law to represent you and to fully explore and to discuss with you in detail your options, legal rights and remedies to recover your money.

Thank you for your understanding and cooperation in this matter.

Sincerely,

GILFORD G. ROBINSON

Regional Director

cc:  Fred H. Wilsen, Assistant General Counsel
       John W. Kozyak, Trustee/Restitution Receiver

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