Marcos Daniel Jiménez, United States Attorney for the Southern District of Florida, and Jonathan I. Solomon, Special Agent in Charge, of the Federal Bureau of Investigation (FBI), announced today that on Friday, May 21, 2004, Anthony M. Damato was sentenced nine (9) years imprisonment by United States District Court Judge Jose E. Martinez. Damato was charged with securities fraud in connection with a fraudulent scheme to falsify the financial condition of Eagle Building Technologies, Inc. (EGBT), a Boca Raton company for which Damato served as Chairman of the Board of Directors. Damato previously pleaded guilty to one count of securities fraud in violation of Title 15, United States Code, 78(j)(b) and Title15, United States Code, 78(f)(f). A hearing before Judge Martinez to determine defendant’s payment of restitution will be set within 90 days.

Having pleaded guilty to a Superseding Information in April 2003, Damato admitted that from about June 2000 to February 2002 he falsified the company records and press releases of EGBT, the stock of which is publicly traded. Specifically, Damato created fraudulent EGBT bank accounts and purchase orders and diverted privately invested funds to EGBT, in order to give the false appearance of substantial revenue coming to EGBT from sales and operations in India. He then caused false statements to be submitted to the U.S. Securities and Exchange Commission (SEC) to create the erroneous appearance that revenue was being received by EGBT. Damato also allowed an EGBT officer to issue misleading press releases regarding the testing and capabilities of a surveillance system of Biosterile Technology, Inc., a company represented by EGBT, in order to take advantage of the publicity and fear generated by widely reported incidents of terrorist activity involving anthrax in the United States. In addition, Damato made payments in an attempt to bribe SEC employees in an effort to avoid SEC scrutiny and to conceal and perpetuate his fraudulent activity. He also made an undisclosed payment to an undercover FBI agent as a bribe for due-diligence investment officers with whom the agent claimed to be working, in order to get the officers’ approval for subsequent multi-million dollar purchases of EGBT stock by a mutual fund that the undercover agent claimed to represent.

Damato was first indicted in the Southern District of Florida for his involvement in connection with an FBI undercover operation, code-named Bermuda Short, that resulted in over 50 arrests and 23 indictments involving the stock of over 20 publicly traded American companies, including EGBT. The original indictment resulted from a long-term investigation conducted by the FBI in which an undercover FBI agent posed as a corrupt securities trader working at a U.S. investment firm for a foreign mutual fund, both of which were fronts used for the undercover operation. EGBT first came to the Department of Justice’s attention through a referral from the National Association of Securities Dealers, Inc., which noticed several suspicious EGBT press releases touting the ability of its products to detect and combat anthrax spores in the wake of the anthrax attacks of late 2001.

Mr. Jiménez commended the investigative efforts of the Federal Bureau of Investigation, the U.S. Department of Justice, the SEC’s Central Regional Office, and the National Association of Securities Dealers, Inc. (NASD). This case is being prosecuted by Trial Attorneys Thomas P. McCann and Jack B. Patrick of the Fraud Section, U.S. Department of Justice.