The Law Firm of Goldman Scarlato & Karon, P.C. Announces Class Action Lawsuit Against America Service Group, Inc

Business Wire, April 7, 2006

CONSHOHOCKEN, Pa. -- Goldman Scarlato & Karon, P.C., a law firm with offices in Pennsylvania and Ohio, announces that a lawsuit has been filed in the United States District Court for the Middle District of Tennessee, on behalf of persons who purchased or otherwise acquired publicly traded securities of America Service Group, Inc. ("America Service" or the "Company") (NASDAQ:ASGRE) between September 24, 2003 to March 16, 2006, inclusive, (the "Class Period"). The lawsuit was filed against America Service and certain officers and directors of the Company ("Defendants").

If you are a member of this class and wish to view a copy of a complaint and join this class action, please e-mail us at info@gsk-law.com and request a copy of the complaint and a plaintiff certification. If you are a member of the Class, you may move the Court no later than June 5, 2006 to serve as a lead plaintiff for the Class. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. However, if you choose to remain an absent class member, unless and until a class is certified, you are not represented by counsel.

The complaint alleges that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that the Company and certain officers and directors issued numerous false and misleading statements about the Company's financial condition. In particular, the Company failed to disclose or misrepresented that:

--America Service was not charging its customers in accordance with their contracts;

--That America Service failed to properly credit customers with discounts, rebates, and price concessions;

--That the Company failed to provide customers with appropriate credits for returned pharmaceutical products;

--That the Company inappropriately established and utilized reserves to help the Company more closely meet its budgeted results.

On March 15, 2006, after the markets closed, America Service announced the findings of an internal investigation into the Company's practices. Consequently, based upon the results of the investigation, the Company will restate earnings for the years ended December 31, 2001, through December 31, 2004 and for the first six months of 2005, and issue refunds, of $3.6 million to customers where it failed to appropriately credit their accounts. In reaction to the news, shares fell $5.65 per share, or approximately 29%, to close at $13.95 per share.

If you bought America Service securities between September 24, 2003 to March 16, 2006, inclusive, and would like to obtain information about the lawsuit, then you are invited to call (888) 753-2796 to speak with an advisor.