| From: StockDung | 4/9/2008 10:31:38 AM | | | | | | Even though no one seems to be trying very hard to find him, Khashoggi is currently a fugitive from justice in the case.
At one time, Khashoggi's chief lieutenant and fellow Saudi swindler, Ramy El-Batrawi, former President of Jetbourne, a Miami CIA proprietary which flew Oliver North's TOW missiles to the Iranians during the Iran Contra Scandal, owned both DC9's later owned by SkyWay.
Small world.
madcowprod.com |
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| To: anniebonny who wrote (103264) | 4/9/2008 11:33:08 AM | | From: StockDung | | | | Geoffrey Eiten used to promote criminal Marc Harris's stock fraud Juniper Group. Mad Cow Morning News has a interesting story about Marc Harris. Also stock fraud GenisisIntermedia which Geoffrey Eiten also promoted
here is the link madcowprod.com
From SHAME ON THE SEC by Christopher Byron:
rgm.com
This outfit, bearing the name OTC Financial Network, is headed by a stock promoter named Geoffrey Eiten, who has been the promotional muscle behind a long list of shaky penny stocks.
At the time he was taking on the Premier Enterprises account, Eiten was simultaneously promoting a Great Neck, L.I., company called Juniper Group.
An SEC filing shows that the largest shareholder of Juniper at that time was a Panamanian company called Bluffdale Corp., which Miami-based KYC News Inc., a leading newsletter publisher, has identified as a mail drop for an international crook named Marc Harris. That man was convicted last May by a federal jury in Miami and sentenced to 17 years in prison for his role in a freon gas smuggling ring. |
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| To: magicrecall who wrote (88243) | 4/9/2008 1:07:50 PM | | From: StockDung | | | | 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. |
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| From: StockDung | 4/9/2008 2:36:55 PM | | | | | | Feds Crack Down on Alleged Tax Fraud Schemes
Justice Dept. Claims Promoters Ran a 'Smorgasbord of Tax Fraud at Sea'
By JASON RYAN and PIERRE THOMAS
April 8, 2008—
The Justice Department today announced a crackdown against a growing number of companies that are telling tens of thousands of customers they don't have to pay federal income tax, and took legal action against a company for allegedly promoting one such scheme.
In seeking a civil injunction, the government hopes to shut down Pinnacle Quest International, which allegedly made $54 million between 2002 and 2006 by sponsoring various tax avoidance schemes at trade shows and resorts in Mexico, France and several locations in the Mediterranean to customers who sought to avoid U.S. taxes.
According to the Justice Department, PQI, which employed 830 salespeople, organized a conference aboard a cruise ship in the Mediterranean to allegedly educate clients on how to avoid paying federal income tax.
The cruise, dubbed a "smorgasbord of tax fraud at sea" in the Justice Department's civil injunction papers, was allegedly held aboard the Celebrity Cruise Line ship Galaxy in May 2007 and included lectures by Sherry Peel Jackson, a former IRS agent who was at the time under indictment for tax crimes.
The government says Jackson earned an estimated $138,000 from working for PQI. A federal jury in Atlanta convicted her last year on charges that she failed to submit tax returns, and a judge sentenced her to four years in prison in February. Jackson is appealing her conviction.
The lawsuits, filed against PQI and several of its alleged promoters in three federal courts in Florida, Oregon and Washington State, allege that the company sold its products to more than 10,000 customers who paid a fee to learn how to convince the federal government that they were not required to pay taxes.
In the Oregon case, the government claims PQI promoted the use of false entities to hide taxable income, and promoted seminars that wrongly told customers they could avoid paying taxes by revoking their Social Security numbers.
The federal lawsuit filed in Florida alleged that PQI engaged in a marketing scheme with financial incentives to keep customers buying the companies products and lectures. Customers initially bought into the PQI tax shows for $7,500 and were invited to attend the next level seminar for $18,750 before being invited to attend the cruise.
Attempts to contact PQI by phone and fax were not successful, and e-mail messages from ABC News were not immediately answered.
Nathan Hochman, assistant attorney general of the Justice Department's Tax Division said, "The size and sheer brazenness of the tax defier activities alleged in these complaints are staggering."
Justice announced the legal action, as well as the larger initiative to combat alleged tax fraud schemes, as millions of Americans finalize their tax returns before next week's April 15 deadline.
U.S. Attorney offices across the country are being told to target so-called "tax defier" companies, which often rely on the Internet to lure the gullible.
In recent years, the tax avoidance schemes have grown, especially on the Internet, with tax defiers asserting that they are not required to file federal tax returns for various reasons.
Some individuals claim they have renounced their U.S. citizenship, but "If they meet the minimum income requirement they absolutely have to pay their taxes," Hochman said at a press conference.
Other individuals claim they can avoid filing tax returns because they claim it is in violation of the 16th amendment, which limits Congress' authority to levy taxes. "The tax defier rejects the entire legal basis of our tax system," Hochman added.
As for the customers of the alleged sham organizations like PQI, the government says it's going to force them to pay their taxes, and in some cases, will prosecute them.
Copyright © 2008 ABC News Internet Ventures |
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| From: StockDung | 4/9/2008 3:06:17 PM | | | | | | SEXI GEOFFREY EITEN:
"Companies that are still in the process of developing their businesses find it ''very difficult to get press, so they have to pay for it,'' said Geoffrey J. Eiten, who provided public relations for Systems of Excellence and another SGA client."
query.nytimes.com
December 15, 1996
Stock Tipsters Praised, and Profited
By LESLIE EATON
WHEN the stock of an obscure outfit called Systems of Excellence started to jump last spring, Internet-savvy investors knew whom to thank: SGA Goldstar, an on-line tip sheet.
When the Securities and Exchange Commission discovered this fall that Systems' stock was being manipulated, it knew whom to blame: SGA Goldstar, which regulators say received shares from the company's president to promote the stock.
And now it appears that Systems was not the only company that paid SGA to praise its stock. In fact, according to the S.E.C., there were at least nine more.
Last week, the S.E.C. filed an amended complaint against SGA and its proprietors, Theodore R. Melcher Jr. and Shannon B. Terry, whom the commission had sued on Nov. 7.
The new complaint contends that since 1991, Mr. Melcher and Mr. Terry secretly received shares in companies that they wrote about, and dumped some of those shares while telling investors to buy.
SGA plans to argue that there was adequate disclosure, said Michael R. Koblenz, a lawyer who represents the newsletter and Mr. Melcher. He pointed to a disclaimer on the newsletter that said, among other things, that ''personnel associated with SGA may own shares in the companies mentioned herein or may act as consultants thereto.''
Mr. Terry made almost $350,000 selling shares of seven of the nine companies he wrote about in return for stock, according to the S.E.C.
Most of these outfits are money-losers with few or no sales, and trade on Nasdaq's bulletin board, which has no listing standards. But three trade on Nasdaq, and one on the New York Stock Exchange (albeit for less than $1 a share). Most have changed their names -- and their businesses -- within the last few years.
Companies that are still in the process of developing their businesses find it ''very difficult to get press, so they have to pay for it,'' said Geoffrey J. Eiten, who provided public relations for Systems of Excellence and another SGA client.
The nine companies listed by the S.E.C. are:
* American Bio Medica of Ancramdale, N.Y., which is trying to sell drug tests. The company did pay SGA with stock, Mr. Eiten said, but is not to blame ''if SGA did something wrong.'' The stock has fallen from $8.50 in September to about $3.50.
* Affinity Teleproductions of Tampa, Fla., now known as Affinity Entertainment, says it produces films and television shows. A spokeswoman for Affinity referred questions about SGA to William J. Bosso, the company's chief executive, who did not return a telephone call. The company's shares rose as high as $10 in June, but now trade for about $2.
* Century Technologies of Beverly Hills, Calif., which has been bought by Affinity. In filings with the S.E.C., Century said the commission staff had recommended enforcement action against it, though the problems ''are with prior management.''
* Ameriquest Technologies of Hollywood, Fla., which sells computer hardware. Richard McIntire, vice president of sales and marketing, said he was unfamiliar with SGA. The company's shares hit $1.50 in May and are now under 45 cents.
* NVID International of Sarasota, Fla., which says it has developed a nontoxic disinfectant. After SGA promoted NVID, the company did hire it briefly as a consultant, said Robert Bunte, president of NVID. The stock, which reached only 65 cents last June, now trades for 18 cents.
* Chancellor Group, which is run from Sidney, Australia. The company has or plans to be in a variety of businesses, including gas production and investment banking. The company referred questions to its president, Neil A. Green, who could not be reached for comment. The shares, which topped $7 in May, now go for $1.
* The Aimrite Holdings Corporation of Las Vegas, Nev. The company, which hopes to start producing auto suspensions early next year, was written up by SGA, said Kenneth P. Coleman, the company's chairman. ''I told them to cease and desist.'' The stock had a reverse split of 1 for 20 in May, and now trades for 62.5 cents.
* Standard Brands of America of Pompano Beach, Fla., which used to run television and appliance stores. The company said in July it might file for bankruptcy; its phone has been disconnected. A year ago its shares brushed $3; they are now about 5 cents.
* International Standards Group of Boca Raton, Fla., which in October changed its name to Total World Telecommunications. The company ''had no relationship with SGA, nor did we pay them,'' said its chairman, Joseph L. Lents, who added that other consultants paid in stock might have passed some shares on to SGA. In October, the stock had a 1-for-15 reverse split and now trades for about $7.
At Systems of Excellence, meanwhile, the new management cheered the news that the S.E.C. had added to its complaint against SGA and against Charles Huttoe, the company's former president. The S.E.C. said Mr. Huttoe had issued millions of unregistered shares to accounts he controlled and, while promoting the stock, sold off shares, making more than $12 million.
Mr. Huttoe's lawyer could not be reached for comment on Friday, but has said in the past that his client is attempting to resolve his difficulties. The new S.E.C. action seeks to freeze the assets of 21 people and firms that received some of those profits.
Correction: December 22, 1996, Sunday
An article last Sunday about SGA Goldstar, an on-line tip sheet that the Securities and Exchange Commission has accused of manipulating small-company stocks, misstated the number of those stocks that trade on the Nasdaq market. It is two, not three. |
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| From: SamAntar | 4/9/2008 4:12:45 PM | | | | | | Utah Attorney General Mark Shurtleff, bought and paid for
About a week before Utah Attorney General defamed me on behalf of Patrick Byrne and Overstock.com, he received a little gift from the company. On 10/30/07, he received $5,000 from Overstock.com. Looks like a bribe to me.
globe.utah.gov
Respectfully,
Sam E. Antar (former Crazy Eddie CFO and a convicted felon) |
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| From: StockDung | 4/9/2008 5:01:26 PM | | | | | | CMKM Diamonds players face stiff penalties in SEC suit
stockwatch.com
2008-04-09 14:53 ET - Street Wire
Also Street Wire (C-*ASC) Alberta Securities Commission
Also Street Wire (U-*SEC) U.S. Securities and Exchange Commission
by Lee M. Webb
CMKM Diamonds Inc.'s key players Urban Casavant and John Edwards, along with their nominees and other defendants, face the possibility of stiff penalties in a $64.2-million securities fraud lawsuit filed by the U.S. Securities and Exchange Commission (SEC) on April 7. (All amounts are in U.S. dollars.)
As previously reported, the SEC filed a 27-page complaint against 14 defendants including CMKM, Mr. Casavant and Mr. Edwards in the U.S. District Court for the District of Nevada.
None of the defendants has yet filed an answer to the SEC lawsuit and the allegations have not been tested in court.
According to the U.S. regulator, the defendants were involved in "a massive and complex scheme" to dump hundreds of billions of shares of CMKM on gullible investors during the fraudulent promotion of the Las Vegas-based pink sheet woofer from January of 2003 until May of 2005.
Other defendants include Mr. Casavant's nominees and general-purpose gofers Ginger Gutierrez and James Kinney, both of Las Vegas. In addition to serving a stint as CMKM's investor relations representatives, the SEC claims that the pair unloaded approximately 88 billion shares of CMKM and, after taking a cut, funelled the proceeds to Mr. Casavant and his family members.
Anthony and Kathleen Tomasso, a husband-and-wife team from the notorious paperhangers haven of Boca Raton, Fla., allegedly served as nominees for Mr. Edwards, a British citizen living in Las Vegas.
The SEC alleges that approximately 77.3 billion unrestricted shares of CMKM were issued to five entities controlled by the Tomassos, who promptly sold the stock and wired more than $2.2-million to Mr. Edwards and transferred substantial amounts of money to other of his associates. The Tomassos allegedly cut themselves in for approximately $648,500.
CMKM's accommodating Las Vegas transfer agent, 1st Global Stock Transfer, and its owner, Helen Bagley, are also named as defendants.
According to the SEC, Ms. Bagley received hundreds of thousands of dollars in suspicious payments from Mr. Edwards and the Tomassos and turned a blind eye to "obviously incomplete and suspicious and, in some cases, forged documentation" while issuing more than 589.7 billion shares of unrestricted stock to Mr. Edwards, Mr. Casavant, their nominees and others.
The now-defunct NevWest Securities Corp., a Las Vegas-headquartered three-monkeys brokerage firm used by Mr. Edwards, and three of its principals are also named as defendants.
The SEC claims that NevWest's chief executive officer Sergey Rumyantsev, a Russian citizen living in Las Vegas, its chief compliance officer and lawyer, Anthony Santos, and former broker Daryl Anderson, now living in Laguna Beach, Calif., saw no evil, heard no evil and definitely spoke no evil as Mr. Edwards opened 36 accounts and unloaded a staggering 259.9 billion shares of CMKM for proceeds of more than $53.3-million.
Over the entire period of the fraud, the approximately $2.58-million in commissions generated by Mr. Edwards's trades accounted for 35.7 per cent of NevWest's total revenue. Mr. Anderson earned approximately $2.3-million for handling the trades.
Rounding out the list of defendants is shady lawyer Brian Dvorak, who is currently living in Boulder, Colo., and who recently filed for bankruptcy protection.
According to the U.S. regulator, in return for at least $495,000, Mr. Dvorak held his nose and wrote hundreds of bogus opinion letters fraudulently authorizing the issuance of more than 606 billion unrestricted shares of the smelly promotion.
Dozy gatekeepers
In conjunction with filing the lawsuit, the SEC issued an April 7 press release commenting on the subpenny promotion and the gatekeepers who allegedly facilitated the fraud.
"The allegations in this case highlight the significant investor harm that results from abuses in the penny stock market," the acting director of the SEC's Los Angeles office Rosalind Tyson remarked.
"Although CMKM's stock sold for well under a penny a share, the defendants were able to reap millions in profits by conspiring to flood the market with billions of unregistered shares while falsely promoting CMKM's value," Ms. Tyson added.
Indeed, Saskatchewan native Mr. Casavant, who honed his touting skills on a number of Canadian mining plays before moving his act to Las Vegas after getting the boot from former Alberta Stock Exchange company Petro Plus Inc., brought a whole new dimension to the world of pink sheet promotions.
Instead of trying to run up the price of his pink sheet dog, Mr. Casavant simply devoted his efforts to generating enough demand among gullible investors to sop up the flood of subpenny stock as he peeled off hundreds of billions of shares for himself, family members and associates.
In the process, Mr. Casavant issued more CMKM shares than previously issued by any company on the planet. By the time the SEC yanked CMKM's stock registration in October of 2005, a staggering 703.5 billion shares were outstanding.
The head of the SEC's enforcement division, Linda Chatman Thomsen, also had something to say about the lawsuit, issuing something of a warning to so-called "gatekeepers" of the securities markets.
"The perpetrators of this massive scheme include several securities professionals and an attorney," Ms. Thomsen commented. "Today's action demonstrates that we will aggressively pursue individuals who ignore their obligations as gatekeepers to our markets and instead collude with their clients to violate the federal securities laws."
Canadian regulators, comprising a patchwork of provincial and territorial securities watchdogs with limited jurisdictional powers, have a remarkably dismal record when it comes to enforcing their nebulous gatekeeper rules and a similarly poor record in suing stock fraudsters and their accomplices.
The SEC, however, has been cracking down on companies and individuals for gate-keeping lapses and is much more aggressive, as well as more successful, in suing crooked market players, including Canadians. Indeed, many consider the SEC to be Canada's most respected securities regulator.
The U.S. regulator is seeking significant penalties against the defendants in the CMKM lawsuit, including Saskatchewan native Mr. Casavant.
The penalties
Among other things, the SEC is seeking judgments against the defendants enjoining them from future violations of securities regulations. That, of course, is pretty standard fare in securities lawsuits.
The U.S. regulator is also seeking an order permanently banning Mr. Casavant from acting as an officer or director of any public company. That, too, is a standard request in such cases.
The SEC further seeks judgments permanently barring each of the 11 individual defendants "from participation in any offering of a penny stock, including engaging in activities with a broker, dealer, or issuer for purposes of issuing, trading, or inducing or attempting to induce the purchase of any penny stock." That would effectively boot the defendants out of the market.
With the exception of CMKM, which is penniless and a company in name only, the regulator is also asking for civil penalties to be assessed against the defendants.
Perhaps of most concern to the defendants, apart from CMKM, the SEC is seeking disgorgement of "all ill-gotten gains from their illegal conduct, together with prejudgment interest thereon."
The regulator claims that Mr. Casavant pocketed approximately $31.5-million, Mr. Edwards made off with $26.4-million and Mr. Casavant's nominees raked in approximately $6.3-million.
Ms. Bagley might be on the hook for several hundred thousand dollars, including $344,000 she allegedly received from the Tomassos, who might be looking at disgorgement of approximately $650,000.
NevWest, which had its registration yanked last year, allegedly made approximately $2.58-million for its participation in the scheme, with $2.3-million going to former broker Mr. Anderson.
Mr. Dvorak allegedly received $350 for each of the hundreds of opinion letters he wrote and received at least $495,000 from Mr. Casavant and his nominees during 2004.
It remains to be seen whether the SEC, if it prevails in the case and is successful in obtaining the disgorgement orders, will be able to collect any of that money.
Saskatchewan sightings
Mr. Casavant, who allegedly pocketed the most money from the scheme, abandoned his "extravagant lifestyle" in Las Vegas and lit out for Saskatchewan after handing the company off to one of CMKM's biggest cheerleaders, Kevin West, last March.
Mr. West, who once touted CMKM as being conservatively valued at $64-billion and possibly worth as much as $1-trillion and praised Mr. Casavant as a godly man doing God's work in redistributing the wealth of the world, apparently had something of an epiphany after the Saskatchewan promoter took a powder.
Under Mr. West's direction and with the assistance of his Texas associate and lawyer Bill Frizzell, another former cheerleader and proponent of the ridiculous claim that the pink sheet company was the victim of naked short selling to the tune of two trillion shares, CMKM is suing Mr. Casavant for allegedly looting the company of $200-million.
Mr. Casavant, now living a less extravagant lifestyle and frequenting Saskatoon casinos rather than his favourite Las Vegas gambling dens, has not yet been served with the year-old CMKM lawsuit. He is also dodging other U.S. lawsuits and creditors.
Perhaps the SEC will be more successful in reeling the Saskatchewan promoter in.
Meanwhile, in an administrative action that points to the peculiarity, if not dysfunctional nature, of the Canadian regulatory system, the Alberta Securities Commission (ASC) has scheduled a hearing for April 9 to consider whether a cease trade order should be issued against CMKM.
The ASC action comes more than three years after the Saskatchewan Financial Services Commission issued a cease trade order against the company and almost 30 months after the SEC revoked CMKM's stock registration, ending any public trading of the shares.
Stockwatch will pick up its review of the SEC lawsuit and continue to follow developments in future articles.
The saga continues.
Comments regarding this article may be sent to lwebb@stockwatch.com.
(Further information regarding CMKM Diamonds and associated companies can be found in Stockwatch articles dated Oct. 21, 2003; June 22; Sept. 16 and 24; Oct. 1, 15 and 20, 2004; Feb. 11, 14, 18, 22 and 23; March 1, 3, 4, 7, 14, 15, 16 and 21; June 6, 8, 9, 10, 13, 14, 15, 16, 17, 20, 21, 22, 29 and 30; July 1, 4, 6, 12 and 13; Aug. 2, 5 and 9; Sept. 7, 12, 27 and 30; Oct. 24, 26 and 31; Nov. 7, 11, 22 and 25; Dec. 1, 6, 9, 15 and 22, 2005; Jan. 3; Sept. 29; Oct. 4, 2006; Aug. 30, 2007; and April 7, 2008.)
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Will there be in bloody jail time for this wanker?
Posted by Gordon Ramsay @ 2008-04-09 15:34
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| From: StockDung | 4/9/2008 10:42:37 PM | | | | | | Better Late Than Never…SEC Files Charges in CMKX Case
by Mark Faulk
Three and a half years after the company was delisted, and over two and half years after the NASD filed charges against NevWest Securities in the same scam, the SEC charged 14 individuals in the CMKM Diamonds fiasco. Although thousands of shareholders were jubilant over the news, for many it seemed to be a case of too little, too late, and raised many questions about who wasn’t charged and why it has taken the SEC so long to bring charges in this case.
On September 9, 2006, an attorney representing a group of thousands of CMKX shareholders sent a letter to the company asking that they take action against six individuals and one company who he claimed illegally sold hundreds of billions of shares of stock to unsuspecting shareholders. In his letter, Bill Frizzell cited 36 trading accounts set up by John Edwards at NevWest Securities, both of whom were charged by the SEC yesterday. He also named CMKX attorney Brian Dvorak, CEO Urban Casavant’s secretary Ginger Gutierrez, and James Kinney, who received billions of shares of company stock, in the first of two shareholders’ derivative rights letters that Frizzell would pen. Edwards, Casavant, Dvorak, Gutierrez, Kinney, and NevWest (along with three individuals from NevWest) were among those charged by the SEC yesterday, along with Edwards’ associates Kathleen Tomasso and Anthony Tomasso and transfer agent Helen Bagley. Bagley’s company First Global Securities and CMKM Diamonds were charged as well.
Although the charges said that Edwards, Casavant, and their cohorts pocketed “at least $64.2 million” in the scam, estimates based on the average price of stock at the time that it was sold show that over 50,000 CMKX shareholders were defrauded of an estimated $250 million dollars. It is one of the largest financial scams in the history of the stock market.
Notable on the list of those who weren’t charged was another company attorney, former SEC attorney D. Roger Glenn, who wrote opinions letters that allowed hundreds of billion shares to be sold into the market based on little more than Brian Dvorak’s claim that the issuances were legitimate. Glenn was named by Frizzell in a second shareholders’ derivative rights letter on March 26, 2007 as another individual who defrauded shareholders. A soon to be released book about the CMKX saga, entitled The Naked Truth: Investing in the Stock Play of a Lifetime, discusses Roger Glenn’s involvement in CMKX:
Bill Frizzell laid out his case against the man who most shareholders had heralded as a savior to the company when he came on board in June of 2004. It was the trumpeted entrance of Glenn that almost single-handedly triggered the massive price run that sucked in thousands of shareholders when the stock rose over a thousand percent in a matter of days…and then dropped back to its original price of one one-hundredth of a cent. He ended his list with the most damning fact of all, that “Mr. Glenn had authored 11 opinion letters in a three-month period resulting in the issuance of 300 billion plus shares,” which were immediately sold to thousands of unsuspecting shareholders by John Edwards, David DeSormeau, James and Jeannie Kinney, and a host of others.
Another individual who wasn’t charged by the SEC was former CMKX Chief Financial Officer David DeSormeau, who was singled out in Frizzell’s first letter and later sued by the current company and its new CEO, shareholder Kevin West, who was named to take over just before Urban Casavant fled to Canada. The Naked Truth discusses DeSormeau’s involvement and comments by yet another company attorney, Donald Stoecklein, during the May 10, 2005, SEC hearing to delist CMKX:
Based on an average selling price at the time, David DeSormeau would have “earned” somewhere around $30 million from the sale of the more than 92 billion shares issued to his companies. It was an incredible amount of compensation considering that in return the company got, as Stoecklein phrased it during the SEC hearings, “25 sheets of paper that is merely shareholders’ equity.”
Among the others who shareholders feel should have been named by the SEC include convicted felon Michael Williams, U.S. Canadian Minerals CEO Rendal Williams (who has reportedly fled to Switzerland), Nevada Minerals president Ed Dhonau, and Casavant associate Emerson Koch, who made millions for simply holding the claims to the 1.9 million acres of mineral claims that were used to entice prospective shareholders to invest in the company. The SEC has still not addressed charges that brokers failed to deliver hundreds of billions of shares of stock in addition to the 703 billion shares that company insiders dumped.
CMKM Diamonds under the direction of Kevin West and Bill Frizzell has filed lawsuits against DeSormeau, John Edwards, Urban Casavant, Michael Williams, Brian Dvorak, James Kinney, Ginger Gutierrez and others. They are working to recoup money stolen from the company and have plans to widen their net to eventually include everyone who they believe defrauded the tens of thousands of CMKX shareholders.
Brian Pugh of the DOJ wouldn’t comment on a joint investigation into CMKM Diamonds by the FBI, the DOJ, and the IRS. He said that any criminal investigation within those departments would have to originate from a grand jury. However, the Faulking Truth confirmed the ongoing investigation in an interview with FBI agent Ryan Randall in September of 2007.
The SEC press release left the door open to additional action by ending with the statement: “The SEC’s investigation is continuing.”
Shareholders can only hope that eventually, all of the major players in the CMKX scandal will face both civil and criminal charges, as well as lawsuits filed by the company itself.
And that, as always, is the Faulking Truth.
(Editor’s note: We will present a special two-hour edition of The Faulking Truth Show on www.toginet.com this Friday, April 11th, from 9-11 AM CST. Listeners are welcome to call in to the show on our toll free number at 1-877-864-4869. TogiEntertainment will conduct a drawing from among the show’s callers to give away six autographed copies of The Naked Truth: Investing in the Stock Play of a Lifetime. The book, authored by stock market reform advocate and writer Mark Faulk, has been updated to include this week’s events, and will be released sometime in May. The Naked Truth: Investing in the Stock Play of a Lifetime is available for pre-order at www.togientertainment.com )
To read additional excerpts from The Naked Truth: Investing in the Stock Play of a Lifetime, go to:
faulkingtruth.com
faulkingtruth.com
To read the SEC complaint in its entirety, go to:
sec.gov |
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| From: train_wreck | 4/10/2008 12:04:14 PM | | | | | | Ex-Refco exec tells of commodities fraud
By Leslie Gevirtz, Reuters
NEW YORK — A former Refco executive, who said he helped hide multimillion-dollar commodity trading losses from clients, testified Monday that his bosses said "we're all in this together."
Santo Maggio, a top deputy to former Refco Chief Executive Phillip Bennett and former President Tone Grant, told how the trio deceived banks, foreign exchange traders, hedge fund executives and even top managers at investor George Soros' funds, six years before the 2005 collapse of one of the world's largest commodity brokers.
Bennett pleaded guilty in February to fraud and other charges stemming from the collapse, but Grant chose to stand trial.
Maggio, who was president of the Refco Capital Markets unit, pleaded guilty in December and agreed to cooperate with federal authorities in their investigation of Refco.
In a second day on the stand in U.S. District Court in lower Manhattan, Maggio described how the company was perennially short of cash after meltdowns in the late 1990s sank clients Refco had financed.
With money tight, Maggio routinely had to pick which obligation Refco would fail on.
"If we were down $100 million," he told the jury, he would look for a client that had a $100 million that needed to be delivered and "we would fail on his $100 million...
"Basically, we were behind all the time," Maggio said, his voice quavering. "It would be like musical chairs...There were a number of excuses you would make...the bank screwed up, my computers are out. There was a list of excuses for people at the back office."
When he complained of the stress of lying to his friends on Wall Street, constantly picking which accounts to shortchange, he says both Bennett and Grant reassured him, saying, "We're all in this together. We will come up with a plan."
Rumors spread that Refco was in trouble and Soros Fund Management, its largest client, called Maggio to say it was withdrawing its assets, which totaled about $260 million at the time.
Maggio arranged for a meeting in 1999 between Soros fund top executives and Bennett, Grant and himself. At the meeting, he testified, the Refco executives lied about not suffering any significant losses and offered to provide monthly financial statements to the fund. They urged the Soros Fund executives to call the head of the Chicago Mercantile Exchange clearinghouse, to verify that Refco had always met its settlement duties.
After checking with the CME, the Soros Fund agreed to keep its assets at Refco for the time being.
"We dodged a bullet. We dodged a missile," Maggio said.
In later testimony, Maggio admitted that he had lied under oath in various litigation and to the U.S. Securities and Exchange Commission.
Refco, once a global clearing house for derivatives that served more than 200,000 customers, collapsed into bankruptcy shortly after it went public in 2005.
Copyright 2008 Reuters Limited. |
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| From: StockDung | 4/10/2008 12:56:38 PM | | | | | | Diamond mine scam netted more than $64-million: SEC
nationalpost.com
Chris Purdy, Canwest News Services Published: Thursday, April 10, 2008
SASKATOON - American securities officials have charged a Prince Albert man who headed a diamond mining company that allegedly scammed millions of dollars from investors around the world.
Urban Casavant, the 51-year-old former CEO of CMKM Diamonds Inc., was among 11 people charged earlier this week with fraud and other offences by the United States Securities and Exchange Commission (SEC).
The agency claims the group conspired to illegally sell unregistered stock -- 622 billion shares -and lined their pockets with at least $64-million from 40,000 investors between 2003 and 2005.
Urban Casavant, the 51-year-old former CEO of CMKM Diamonds Inc., was among 11 people charged earlier this week with fraud and other offences by the United States Securities and Exchange Commission (SEC).
Mark Faulk, an author from Oklahoma City, Okla. who has researched the case for two years for an upcoming book, believes the numbers are actually much higher.
He said Wednesday thousands of people across the U.S., Canada, Europe and Asia were actually swindled out of $250-million.
"This may be the largest fraud of its kind ever in the stock market," said Faulk.
Mr. Casavant is alleged to have personally pocketed at least $31.5-million while running the scheme out his home in Las Vegas.
Mr. Faulk said Mr. Casavant blew most of the money on his extravagant lifestyle, which included lavish homes and nights out drinking and gambling.
Mr. Casavant was a known "high-roller," who would often gamble more than $100,000 a night at various casinos, said Mr. Faulk.
Mr. Casavant grew up in Prince Albert and worked in the city as both a prison guard and U-Haul franchise owner -- before he moved on to bigger ambitions with mining and stock markets.
According to SEC court documents filed in Nevada, he controlled several private Canadian companies that later entered into a reverse merger with a public shell owned by John Edwards, a British man living in Las Vegas, and the alleged mastermind in the ensuing scheme.
CMKM was created in 2002 and claimed to have mineral rights for nearly two million acres covering northern Saskatchewan in the Forte a la Corne region, east of Prince Albert.
The SEC alleges the company issued the billions of shares of unrestricted stock with suspect and inconsistent attorney opinion letters.
At times, the shares were considered a bargain on the penny stock market.
"Although CMKM's stock sold for well under a penny a share, the defendants were able to reap millions in profits by conspiring to flood the market with billions of unregistered shares while falsely promoting CMKM's value," Rosalind Tyson with the SEC's office in Los Angeles, Calif. said in a press release.
The court documents allege the company had no meaningful mining operations or records. CMKM solely focused on issuing and promoting stock.
It's marketing machine allegedly included phony and misleading news releases. One release in December 2002 said the company had opened an office in Belgium to promote the "Casavant diamond brand."
The company, however, had not yet found a single diamond.
Another press release in early 2004 announced a discovery of kimberlite ore, in which diamonds are usually found. The site was named "the Carolyn Pipe," after Mr. Casavant's wife.
Mr. Casavant also hyped the company on the Internet and in one webcast interview said CMKM was ahead of schedule and "drilling 24-7 up in Canada."
His most effective promotion tool was the creation of a CMKXtreme team of motorbike and car racers that travelled to events across the U.S.
Hundreds of shareholders who attended the races visited a CMKM tent, where they where they could study a map of alleged mineral claims and watch a looped video of mining work.
One shareholder from Chicago, who brought his 11-year-old daughter to a race in 2004, said he was happy to shake hands with Mr. Casavant in the company's tent.
"(Casavant) said, 'We're driving truckloads of diamonds out of there.' And then he looked down at my daughter and said, 'Your daddy is going to be so rich.' "
The shareholder, who did not want to give his name, said he sunk about $7,500 into the scheme and convinced his brother to invest thousands as well.
He said the racing team was perfect for targeting novice investors in "middle-class America." According to the SEC, the company's racing team was extremely popular and did help increase stock transactions.
In the fall of 2004, over questions of accurate public information on the company, both the SEC and the Saskatchewan Financial Services Commission (SFSC) issued temporary cease-trade orders against CMKM.
The truth of much of the company's activities became public a year later, during an evidentiary hearing, and the SEC issued a final order de-registering the company's stock.
In March, 2007, Mr. Casavant resigned from CMKM. It's believed he returned to Canada.
Molly White, an SEC lawyer involved with the case, said Mr. Casavant has not yet been served with court documents. She could not confirm whether officials are having trouble finding him.
She explained the SEC charges are civil, not criminal. And if found guilty, Mr. Casavant and those co-accused in the case will not face prison time.
The SEC is seeking fines and the return of what's left of the stolen investment money, said White.
As well, the SEC is seeking an order preventing Mr. Casavant from acting as an officer or director of any public company in the U.S.
Mr. Faulk said he has learned the Federal Bureau of Investigation, Internal Revenue Service and the U.S. Department of Justice are also investigating the case, so criminal charges could be laid in the U.S. in the future.
Ed Rodonets with the SFSC office in Regina, said his group exchanged information with the SEC to help with the investigation.
He estimates there are at least 100 affected shareholders in Saskatchewan.
Faulk said some of the shareholders he interviewed threw a few thousand dollars into the company on a whim. Others "lost every single penny they had."
The scam cost some people their homes and marriages, he said. Some died while waiting for their diamond windfall.
CMKM, now based in Texas with a new CEO, faces several lawsuits. It has also launched its own suits to recover property and assets purchased with stolen investment funds so it can rebuild the business.
The StarPhoenix 2008 |
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