|JOHN L. SMITH: Diamonds boondoggle a testament to the power of public relations |
Urban Casavant has received news that not even he can spin into a positive press release.
Apr. 09, 2008
Las Vegas Review-Journal
The high-rolling front man of the Las Vegas-based CMKM Diamonds boondoggle and 13 of his colleagues have been hit with a civil injunction alleging they illegally issued and sold up to 662 billion shares of unrestricted stock and collected at least $64.2 million from investors who bought their story about the vast diamond fortune lying beneath the surface in far reaches of Saskatchewan, Canada.
The government alleges the proceeds generated from January 2003 to May 2005 were largely split between Casavant, who got $31.5 million, and the "scheme's mastermind," John Edwards, who got $26.4 million. The rest of the cash filtered down to various paperhangers, brokers and phone sales jockeys.
Casavant's diamond empire was initially run out of his home, where he generated a steady stream of press releases touting the promise of the vast deposits in the Canadian wilderness.
Like all good cons, there was a grain of truth to the promotional puffery. The behemoth DeBeers corporation has explored the Forte a la Corne region of Saskatchewan, which is believed to contain one of the larger diamond fields on the planet.
Not that Casavant found any, or used the millions his promotion generated to develop his claims. But he wisely left such details out of his dizzily optimistic media statements.
Meanwhile, our man Urban mostly stayed warm in Las Vegas, where he was known as a big casino customer and a promoter of the CMKM Racing team. From top-fuel dragsters to high-powered auto racers, Casavant ran fast and used the machines to market his stock. He even loaned a vehicle to weekend racing enthusiast and Nevada Secretary of State Dean Heller. Now a congressman, Heller distanced himself from the CMKM crowd several years ago.
Casino sources say Casavant made little secret of his big diamond promotion. For the record, I wouldn't for a moment suggest the Gaming Control Board step up and question how much Strip casino officials knew about Casavant's scam despite the press and SEC scrutiny. Our gaming moguls need all the good customers they can get these days.
Casavant's company is a testament to the power of public relations. With press releases, hyperbolic Internet chat rooms, and race event promotions across the country, he attracted more than 40,000 investors.
His glittering press releases not only promoted his worthless stock, but they also helped calm the fears of skeptical investors as they downplayed the SEC's criticism. And that often meant investors eventually poured good money after bad as they chased their dream of riches glittering from the Great White North like some penny stock aurora borealis.
They didn't, however, take a shine to my reporting. I long ago lost count of the number of CMKM investors who called to rip me to pieces after reading a column that dared to call into question Casavant's motives. And executives at Silver State Bank weren't too pleased when it was reported that millions floated through more than 100 accounts linked to Casavant.
As the SEC gathered evidence and began isolating the company, eventually suspending it, the calls of complaint slowed to a trickle.
Now the SEC has taken the next step. In addition to Casavant and Edwards, attorney Brian Dvorak, First Global Stock Transfer owner Helen Bagley, Kathleen Tomasso, Anthony Tomasso, James Kinney, Ginger Gutierrez, Anthony Santos, Sergei Rumyantsev, and Daryl Anderson also were named in the complaint.
Santos, Rumyantsev, and Anderson were employed at NevWest Securities Corp. They allegedly generated millions in sales, but I guess NevWest forgot to pay its phone bill. Its number has been disconnected.
CMKM's Pecos Road "home office" is closed, too. Casavant has supposedly returned to Canada, perhaps to be closer to his diamonds.
The Tomassos' reputation as Boca Raton, Fla., paperhangers is so well established they rate their own page on the Ripoff Report Web site. They helped promote and sell CMKM stock in a city known as a scammer's paradise. Attempts to reach the Tomassos via phone also were unsuccessful. You guessed it: The number is no longer in service.
I'd like to think we've heard the last of the CMKM Diamonds scam, but here's a twist the company's glittering impresario might appreciate.
After all these years, the SEC is writing press releases about Urban Casavant.
John L. Smith's column appears Sunday, Tuesday, Wednesday and Friday. E-mail him at Smith@reviewjournal.com or call (702) 383-0295.