MARKET SCAMS

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FreeStar Files $54 Million Fraud Claim Against vFinance and AffiliatesSeeks Damages for Fraud, Market Manipulation and Illegal Short SellingNEW YORK, May 6 /PRNewswire-FirstCall/ --FreeStar Technology Corporation(BULLETIN BOARD: FSRC) , a global technology company committed to setting the next generation standard for secure Internet commerce, announced it has filed an answer and substantial counter claim in the vFinance et al vs. FreeStar Technology Corporation et al action.The filing, which took place today in United States District Court, Southern District Of New York, states, in part, that FreeStar retained "vFinance Investments, Inc. ("vFinance"), a national publicly-traded broker-dealer ... with self-proclaimed 'expertise and superior service required to address the special needs of small and medium sized public companies' ... as the exclusive financial advisor for Freestar." The filing further states, "vFinance recommended and assisted Claimants to negotiate, draft and execute convertible debt financing through 'floorless' convertible notes with lenders controlled by vFinance, vFinance's own Chief Executive Officer, employees and affiliates. These notes and related transactions are referred to in the financial community as 'toxic convertibles' or 'death spiral convertibles' ... vFinance and Plaintiffs charged Freestar gigantic fees and otherwise ensured profits of multiples of their original investment by setting out to destroy vFinance's customer, Freestar." In addition, the filing states, "The dispute here arises because Freestar survived the 'death spiral' and vFinance's and Plaintiffs' expectation of gigantic gains was foiled ... Freestar and Paul Egan, in turn, file these Counterclaims to recover from vFinance and Plaintiffs damages suffered as a result of their 'death spiral' strategy, violations of the federal securities laws, breach of contracts, including over-conversion of the pledged securities, market manipulation, breach of fiduciary duty and fraud."Paul Egan, President and Chief Executive Officer of FreeStar, stated, "We want to be absolutely clear we believe that the actions of David Stefansky, Richard Rosenblum, Marc Siegel and their affiliated corporate entities were unconscionable and violated virtually every actual and implied legal and moral obligation of a financial advisor. We believe the litigation process will reveal that they perpetrated a massive fraud on our emerging company and its shareholders, while supposedly acting in a fiduciary capacity. Although there are always substantial risks in litigation, we are confident that we will prevail in the action. Mr. Egan went on to note, "This is not some frivolous action which will quietly be settled and forgotten. We are deadly serious in pursing our claims and in holding those so-called 'financial professionals' responsible for their conduct."Litigation BackgroundThis litigation has been initiated by vFinance Investments, Inc., Boat Basin Investors, LLC, Papell Holdings, Ltd., Marc Siegel, David Stefansky, Richard Rosenblum against FreeStar Technology Corporation, First American Stock Transfer, Inc., Paul Egan, Ciaran Egan, Phillip Young, and Margaux Investment Management Group, S.A.The Chapter 7 Petition for involuntary bankruptcy filed against FreeStar in January by vFinance, Inc., David Stefansky, Richard Rosenblum, Marc Siegel, Papell Holdings LLC and Boat Basin Investors Ltd. in the United States Bankruptcy Court for the Southern District of New York was dismissed pursuant to a ruling by Honorable Judge Allan L. Gropper. As contended in FreeStar's Motion to Dismiss of February 4, 2003, the Petitioners held no claims against FreeStar that were not the subject of a bona fide dispute.FreeStar is of the opinion that the Chapter 7 Petition was filed in bad faith in order to depress FreeStar's share price and thus allow the Petitioners to cover a substantial naked short position in FSRC stock. In connection with the bankruptcy filing Petitioners paid $40,000 in FreeStar's attorneys' fees.The 88 page answer and counter-claim filed by FreeStar can be viewed in its entirety by visiting FreeStar's corporate website at www.freestartech.com.Conference CallPaul Egan, the president of FreeStar, will conduct a conference call and webcast on Wednesday, May 7 at 9am Eastern. Investors may access the call by dialing 877.209.9922 in the United States or from an international location by calling 651.224.7472. Participants should identify the call as the "FreeStar Conference Call." A replay of the call will be available following the call in the United States at 800.475.6701 or internationally at 320.365.3844, access code 684317.About FreeStar Technology CorporationFreeStar Technology is a global technology force focused on exploiting a first-to-market advantage for enabling ATM and debit card transactions on the Internet and high-margin credit card processing. FreeStar Technology's Enhanced Transactional Secure Software ("ETSS") is a proprietary software package that empowers consumers to consummate e-commerce transactions on the Internet with a high level of security using credit, debit, ATM (with PIN) or smart cards. It sends an authorization number to the e-commerce merchant, rather than the consumer's credit card information, to provide a high level of security. The company maintains its corporate headquarters in Santo Domingo, Dominican Republic, and offices in Dublin, Ireland, and Helsinki, Finland. For more information, please visit the Company's web sites at www.freestartech.com, www.rahaxi.com and www.epaylatina.com.On April 24, 2003 the company announced that its Board of Directors accepted in principle a $74,480,000 non-binding letter of intent received from a privately held company, FreeStar Acquisition Corporation, to acquire all of FreeStar Technology Corporation's outstanding capital stock. Based on the number of FSRC shares currently issued and outstanding, the proposed letter of interest is valued at approximately $.49 per share (after payment of existing indebtedness, but excluding conversion of outstanding preferred stock and exercise of in-the-money stock options), would represent a 158% premium over the closing price of FreeStar's common stock on April 23, 2003. That offer is subject to various conditions including buyer's obtaining of financing and satisfactory due diligence.Forward Looking StatementsCertain statements in this news release may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the company, are forward-looking statements that involve risks and uncertainties. This litigation, like all litigation, is subject to inherent uncertainties, and unfavorable rulings could occur that would have an adverse impact on the FreeStar and its claims. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Technical and other complications which may arise could prevent the prompt implementation of any strategically significant plan(s) outlined above.Contact

Trilogy Capital Partners, Inc.,
461 5th Avenue, 11th Floor
New York, NY 10017
[e-mail] CONTACT: Trilogy Capital Partners, Inc., [phone], [e-mail] , for FreeStar Technology CorporationWeb site: http://www.freestartech.com/http://www.rahaxi.com/http://www.epaylatina.com/" target="_new">http://www.freestartech.com/http://www.freestartech.com/http://www.rahaxi.com/http://www.epaylatina....
Copyright 2003 PRNewswire
Issued: 05/06/2003 01:43 PM GMT