Leo Grant Joint Public Statement

April 15, 2004

Leo and Amy Grant and the Receiver for 4NExchange announced today that they have amicably resolved the claims the Receiver initiated against the Grants for amounts they received over their original investment as investors in 4NExchange. The agreement entered today is subject to court approval, but the parties anticipate receiving that approval and having the matter dismissed shortly.

In exchange for dismissal, the Leo and Amy Grant agreed to waive nearly $2 million in claims against 4NExchange which they had acquired from other 4NExchange creditors. Both the Grants and the Receiver believe that the waiver of these claims will greatly benefit the receivership estate, which will ultimately benefit the remaining 4NExchange creditors.

The Receiver stressed that it is important to note that the original legal action against Leo and Amy Grant was initiated only to recover money paid to the Grant over and above their initial investment in 4NExchange, an amount estimated to be approximately $120,000.

The Receiver has initiated many similar actions to recover overpayments to investors who were paid back more money than they originally invested. Prior to filing the suit, the Receiver, by letter, demanded a return of $222,000 the Grants allegedly received, claiming Grants had invested only $8,000. Grants responded by stating they invested $88,000, not $8,000. There were no further negotiations on possible resolution before the Receiver filed suit against the Grants.

The Receiver also noted that there were no allegations against the Grants in the legal action that claimed the Grants were involved in any way with 4NExchange, other than as passive investors.

The comprehensive settlement announced today also involved the release of similar claims the Receiver had asserted against James Grant, Terry Grant and Sam Hall.

Robert Wing, Receiver for 4NExchange

Leo and Amy Grant

Scott:

Scott:

I have reviewed your commentary on this matter. I am the lawyer who represented Leo and Amy Grant in the 4NExchange receivership. I wanted to clarify a couple of points and then offer a personal observation.

But first, I noticed that you have not included on your website the fact that the Receiver's action against the Grants was settled in April. A copy of the joint public statement by the Grants and the Receiver is attached. The settlement involves the tender of over $2,000,000 worth of claims against the Receivership which were owned by other receivership creditors. You will note that the Receiver agrees that the amount of overpayment to the Grants was only $120,000 not the $222,000 originally claimed. You will also note that prior to the complaint against the Grants, the Receiver had asked for $222,000 not the $120,000 estimated to be the true amount of the Grant's receipts. When the Grants responded to the initial demand, saying the Receiver wrongly overstated the amount, the Receiver simply filed the Complaint. On the amount, the Grants were right and the Receiver was wrong. So were you for that matter, because you simply parroted the Receiver's bad number, and assumed a lot of things that weren't true concerning the Grant's motivations

 Now, here are my observations:

You seem to assume that complete innocence is the only basis for defense of a lawsuit and all plaintiffs are correct in their allegations.

You'd make a fine priest, but a lousy lawyer.

A strong defense is not always an indication that the defendants believe that the plaintiff has no case--they may simply believe that is defective, as this one was, by overstating damages by nearly $100,000.

Always-always--plaintiff's take great liberty with allegations favorable to their position, and a good defense is usually the process of sifting through all the plaintiff's schneef to get down to bedrock fact. At that point, things usually settle.

The complaint in the Grants' matter is a prime example: the Receiver misinterpreted the 4NExchange records, which admittedly were a mess, and that led to an overstatement of the amount owed by nearly $100,000. Do you think the Grant's should simply have paid that amount, merely because the Receiver hadn't done his homework thoroughly? Allegations in a complaint are just that-allegations. Do you understand? Sometimes the fight is not over the principle, but merely over the true facts.

 Now, a personal observation: We are not acquainted, so rather than have you assume that you know, as you think you know the Grants, let me tell you.

I have spent 14 years on the government's side of the table. During that time I intercepted and dealt with many types of consumer frauds-mostly investment frauds. I have been the securities regulator in 2 different states; served as president of the state and Canadian securities regulators association in Washington, D.C.; I have testified as an expert before Congress 7 times on investment fraud related matters; I have conducted 2 Senior Staff White House briefings for the Clinton administration, on legislation involving consumer rights to redress investment fraud; I have been an investigator, staff attorney, licensing authority, and white-collar crime prosecutor and now private attorney. I have put white-collar criminals behind bars, seen just about every scheme known to man and have seen civil and criminal defendants of every stripe. I know fraud when I see it, and I know integrity when I see it. I also have 5 children of my own, which is pertinent to what I'm about to say.

Through this case, I have come to know the Grants and know something of what happened with 4NExchange. First: the Grant's level of participation was purely as passive investors, mostly in support of their son, Paul. They were not more involved than that, and the Receiver never alleged otherwise. They did not get their downline involved or promote the scheme; and when people, after making an initial investment, later questioned what Paul was doing, they reacted like any parent would: disbelieving of the notion that their son could have done something so wrong, hoping against what the facts might tend to show. Much has happened, obviously, since those early days to show exactly what had happened. But what happened was not the Grants doing and not one fact has demonstrated that they promoted this in any way--a fairly telling point, since, their chief business is selling stuff and getting others to sell.

Now the Grants are people of integrity and honesty. What's more, they are fiercely protective of friends, home and family, a virtue, in my opinion, sadly lacking in this troubled world. Anybody, anybody can run into problems with a child. And the Grants are no exception. But the problems of the child do not mean that the parent's integrity is compromised, or that their long history of service to friends and community evaporates just because someone like you, is in a position to take cheap shots.

The Grants will continue to be who they are, long after the sniping fades to distant memory. Long after you and others lay down your poison pens, long after the real facts are known, the Grants will continue to be who they are.

Thank God for people like them who can meet adversity without compromising their integrity, who can suffer all the accusations of snapping rat terriers, firm in their belief that at the end of the day, their character will pull them through.

The Grants have now settled all claims the Receiver brought in relation to all of their family members except Paul. In my opinion, the settlement the Grant's presented to the Receiver will do more than just repay the damages the receiver sought from the Grants, and will benefit the other investors who got involved in 4NExchange.

 These are creative, honest people. If I know them, the Grants will continue to try to assist in providing relief to 4NExchange investors, despite the fact that this mess was not their fault, and despite the fact that many of the people they try to help will continue to believe the worst about them because of people like you. You may not understand that, but those who know the Grants, will.

Thank you for your time. Now you really should publish the public statement and my comments. The content of your website appears to be both reckless and slanderous in several respects and is in need of some urgent correction.

Woodbury & Kesler, P.C.
Mark J. Griffin

Dear Mr. Griffin,

Thank you for your letter.

I had followed the 4Nexchange case on Pacer for a long time. I stopped watching the case since there was never anything new on Pacer. .

As far as having "slanderous" information on my site, any site visitor is welcome to write me and clarify anything they might feel is incorrect. My e-mail is available in no less than 40 places on my site. I find it curious that if so much was "slanderous", and I'm sure the Grant's knew of my site, that they did not write me. As you can see I posted the letter from Paul's brother, John. If the Grant's would like to post their side of the story please let them know that I am more than willing to post it. They cannot have any legitimate complaint since they obviously did not feel it was worth their time to write an e-mail. I would have published anything they sent me.

I'm in the process of adding your requests to my site.

With Best Regards,

Scott Larsen

ps. Are there similar issues with Mr. Storm's suit, which I see is still open on Pacer. I have not received any feedback about his supposed innocent participation in the scam either.

Dear Mr. Griffin,

If you would please point out the "slanderous" items on my page so that I can fix them.

With Best Regards,

Scott Larsen