United States Securities and Exchange Commission

Litigation Release No. 17803 / October 23, 2002

, No. (D.D.C. 1 02CV00397 ESH)

DC Court Enjoins Damato

   The Securities and Exchange Commission announces that on October 22,
   2002, the Honorable Judge Ellen Segal Huvelle of the United States
   District Court for the District of Columbia permanently enjoined
   Anthony M. Damato, the former president and chief executive officer of
   Eagle Building Technologies, Inc., a company located in Boca Raton,
   Florida, from violating the anti-fraud, periodic reporting and
   internal record-keeping provisions of Sections 10 (b) and 13(b)(5) of
   the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13b2-1,
   and 13b2-2, and aiding and abetting Eagle Building's violations of
   Section 13(a) and 13(b)(2) of the Exchange Act and Rules 13a-1 and
   13a-13 in connection with Damato's creation of false purchase orders
   and bank records which he provided to accountants to inflate the
   revenues reported by the company in its annual and quarterly reports
   filed with the SEC, and false press releases that were distributed to
   the investing public. The district court also barred Mr. Damato from
   acting as an officer or director of any public company. Mr. Damato
   consented to entry of the district court's order without admitting or
   denying the allegations of the Commission's complaint, which was filed
   against him on March 1, 2002. Issues relating to whether Mr. Damato
   should be ordered to pay disgorgement, and civil penalties remain open
   to be resolved by the district court at a later hearing.

   Commission alleged in its complaint that Damato, as the president and
   chief executive officer of Eagle Building Technologies Inc., and the
   company engaged in a massive financial fraud by falsely recognizing
   millions of dollars of non-existent revenue from Eagle Building's
   purported sales of cement building blocks through its foreign
   operations in India. This revenue, which was reported in the company's
   annual report for 2000 filed with the SEC on Form 10-K and its
   quarterly reports filed on Forms 10-Q for the first three quarters of
   2001, was almost completely fictitious, according to the complaint.
   The Commission alleged that Damato created false purchase orders and
   bank records to create the appearance of foreign transactions, which
   he then provided to the company's accountants. Additionally, the
   complaint asserts that Damato and the company issued three false and
   misleading press releases after September 11, 2001 touting
   anti-terrorism security measures marketed by Eagle that capitalized on
   the public's anxiety post-September 11.

   The district court previously entered a permanent injunction against