U.S. Department of Justice Federal Bureau of Investigation

In Reply, Please Refer to Release No.

219 South Dearborn Street Chicago, Illinois 60604

December 27, 2006 SUSPECT IN PONZI SCHEME ARRESTED IN FLORIDA Robert D. Grant, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation (FBI) and Michael J. Folmar, Special Agent-in-Charge of the Jacksonville Office of the FBI announced today that MICHAEL E. KELLY, age 57, who resides in Cancun, Mexico was arrested without incident by Special Agents of the Jacksonville Office of the FBI on Friday, December 22. KELLY was taken into custody and processed by Special Agents of the Jacksonville FBI Office after KELLY had traveled to the United States earlier last week. KELLY was charged in a criminal complaint that was filed in Chicago on Friday, December 22 with one count of mail fraud for allegedly operating a scheme in which individuals were recruited to invest in what were purported to be timeshares in KELLY's Mexican hotels. The investors were issued "universal leases", which were sold to hundreds of United States victims who invested over $400 million dollars into KELLY'S alleged fraud scheme. It is alleged that KELLY operated this Ponzi-type scheme from 1999-2004. Although KELLY was arrested in Florida, he will be appearing in Federal Court in Chicago at an as yet undetermined date to face his detention and preliminary hearings. It is believed that victims of KELLY's alleged scheme are scattered throughout the United States and the Chicago Office of the FBI is encouraging anyone who may believe that they were a victim of KELLY to contact the FBI at(312) 421-6700. The public is reminded that a complaint is not evidence of guilt and that all defendants in a criminal case are presumed innocent until proven guilty in a court of law. EDITOR'S NOTE: A copy of the complaint filed against KELLY is available from the Chicago FBI Press Office at (312) 829-1199.

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