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Post by Franko10 ™ on Apr 8, 2008 9:45:44 GMT -5
CMKM Diamonds Faces SEC Charges in $64 Million Penny Stock Fraud Contributed by: Martinas B. Date: 8 Apr, 2008 Microscopic mining company called CMKM Diamonds Inc., which was trading under a penny has been accused of a $64 million penny stock fraud by issuing hundreds of billions of shares illegally leaving 40,000 investors nationwide without their money. With assistance from a transfer agent and an attorney, allegedly CMKM fraudulently issued hundreds of billions of shares of purportedly unrestricted stock to John Edwards and his nominees, as well as to the nominees of Urban Casavant, the company's chief executive officer. The SEC complaint charges CMKM, a broker dealer and transfer agent involved and 11 individuals including Casavant. The commission identifies in its complaint John Edwards was the brains behind the fraud. It is believed that Edwards and others pumped their unregistered stock into the public markets. According to the SEC, Edwards pocketed $26.4 million from sales through a single brokerage firm and that Casavant received about $31.5 million. The SEC's investigation is continuing. Sources SECURITIES AND EXCHANGE COMMISSION www.cmkmdiamondsinc.com |
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Post by Franko10 ™ on Apr 8, 2008 9:47:02 GMT -5
I have had all kinds of hits from different media sources telling this story from the LA times to INternet media forums,.. If CMKM wanted a spotlight they sure got one.
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Post by patinhouston on Apr 8, 2008 11:36:53 GMT -5
it's about time...now watch NOTHING really happen for the shareholders except an apology from the SEC..
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Post by Franko10 ™ on Apr 8, 2008 11:42:53 GMT -5
it's about time...now watch NOTHING really happen for the shareholders except an apology from the SEC.. LMAO,... Yeah I Know,.. that is my next fear at this point,.. but we will see,.. |
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Post by Franko10 ™ on Apr 8, 2008 12:12:33 GMT -5
The SEC Cracks a Naked Short Nut-Case
In the "Baloney Blitzkrieg" chapter of Wall Street Versus America, I describe the looniness surrounding a grimy little diamond mining shell company called CMKM Diamonds -- a company that barely existed except for a share-generating mechanism, a loudmouth CEO named Urban Casavant, and a handful of exceedingly stupid shareholders who made fools of themselves on picket lines when they weren't sending threatening emails to journalists and regulators.
It was a good example of how a small group of determined crackpots can cause damage to our regulatory system, in this case by pushing a fraudulent "stock counterfeiting" conspiracy theory.
Above all, CMKM was a textbook case of corporate blame-shifting, and today the SEC put the blame where it really belonged, charging the company with a massive fraud in which Casavant personally raked in $31 million.
The SEC complaint observes:
Casavant generated investor interest in CMK by using false press releases, Internet chat boards, and "funny car" race events across the country. To divert attention from their own dumping of CMK shares, Casavant persuaded CMK's investors that the reported high trading volume in CMK stock reflected extensive "naked short sellng" rather than ordinary stock dilution. This promotion was extremely successful, and about 40,000 investors purchased CMK stock during the period of the fraud. In reality, Casavant ran the company from his house in Las Vegas, and CMK had no meaningful operations other than issuing and promoting its own stock. [emphasis added]
Patrick Byrne of Overstock.com has taken over the naked shorting banner from Casavant, and, naturally, his company has never made a dime in profits and is also under SEC investigation.
Unfortunately, it took CMKM years to grind its way through the SEC system, and the Overstock case is "only" two years old. So stay tuned--but be patient.
Floyd Norris, commenting on a typically paranoid email from a naked shorting nut, says "Do you think that reader will admit he was fooled? I don’t."
I agree, and the snail-like SEC, which did not "set any speed records for filing," as Floyd points out, must share the blame for that.
Apart from its extreme slowness in processing this and other cases -- Overstock's is a good example -- the SEC has made matters worse by pandering to naked shorting loons. The agency has diverted valuable resources in pursuit of its "Regulation SHO" idiocy, which has no real effect on the markets while fueling conspiracy theories that gull the naive.
© 2008 Gary Weiss. All rights reserved.
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Post by Franko10 ™ on Apr 8, 2008 12:12:49 GMT -5
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Post by inthenow1 on Apr 8, 2008 12:32:31 GMT -5
Franco10 - Thank you for the e-mail 4/7! Thank you for "Frank's Place" yesterday .. and today with 4/8 SEC continuing .. and hopefully, your gracious regular "feel" giving of CMKM/CMKX info from SEC and those you respect, as possible, with Zoinkers posts of SEC action daily and useful info to Shareholders. Have been following other boards, some MP3's, and if you have a sense that a major development is forming, it would please me to be your regular visitor. I'm 72, my wife of our 48 years together is nearly finished on her Book and I am the helper on her mission "Erminie .. an examined life" .. much time could be given to Erminie .. and you have the gift to be "the truth giver" .. I have great interest in your thoughtfulness. inthenow1 .......................................................................................................... CMKM Diamonds Faces SEC Charges in $64 Million Penny Stock Fraud Contributed by: Martinas B. Date: 8 Apr, 2008 Microscopic mining company called CMKM Diamonds Inc., which was trading under a penny has been accused of a $64 million penny stock fraud by issuing hundreds of billions of shares illegally leaving 40,000 investors nationwide without their money. With assistance from a transfer agent and an attorney, allegedly CMKM fraudulently issued hundreds of billions of shares of purportedly unrestricted stock to John Edwards and his nominees, as well as to the nominees of Urban Casavant, the company's chief executive officer. The SEC complaint charges CMKM, a broker dealer and transfer agent involved and 11 individuals including Casavant. The commission identifies in its complaint John Edwards was the brains behind the fraud. It is believed that Edwards and others pumped their unregistered stock into the public markets. According to the SEC, Edwards pocketed $26.4 million from sales through a single brokerage firm and that Casavant received about $31.5 million. The SEC's investigation is continuing. Sources SECURITIES AND EXCHANGE COMMISSION www.cmkmdiamondsinc.com |
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Post by Franko10 ™ on Apr 8, 2008 12:36:52 GMT -5
Franco10 - Thank you for the e-mail 4/7! Thank you for "Frank's Place" yesterday .. and today with 4/8 SEC continuing .. and hopefully, your gracious regular "feel" giving of CMKM/CMKX info from SEC and those you respect, as possible, with Zoinkers posts of SEC action daily and useful info to Shareholders. Have been following other boards, some MP3's, and if you have a sense that a major development is forming, it would please me to be your regular visitor. I'm 72, my wife of our 48 years together is nearly finished on her Book and I am the helper on her mission "Erminie .. an examined life" .. much time could be given to Erminie .. and you have the gift to be "the truth giver" .. I have great interest in your thoughtfulness. inthenow1 .......................................................................................................... CMKM Diamonds Faces SEC Charges in $64 Million Penny Stock Fraud Contributed by: Martinas B. Date: 8 Apr, 2008 Microscopic mining company called CMKM Diamonds Inc., which was trading under a penny has been accused of a $64 million penny stock fraud by issuing hundreds of billions of shares illegally leaving 40,000 investors nationwide without their money. With assistance from a transfer agent and an attorney, allegedly CMKM fraudulently issued hundreds of billions of shares of purportedly unrestricted stock to John Edwards and his nominees, as well as to the nominees of Urban Casavant, the company's chief executive officer. The SEC complaint charges CMKM, a broker dealer and transfer agent involved and 11 individuals including Casavant. The commission identifies in its complaint John Edwards was the brains behind the fraud. It is believed that Edwards and others pumped their unregistered stock into the public markets. According to the SEC, Edwards pocketed $26.4 million from sales through a single brokerage firm and that Casavant received about $31.5 million. The SEC's investigation is continuing. Sources SECURITIES AND EXCHANGE COMMISSION www.cmkmdiamondsinc.com Thank You,.. Our goal here at Franks Place is to ensure all investors are on the same page and given all the facts as soon as possible,.. We will always try our best.  |
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Post by Franko10 ™ on Apr 9, 2008 9:17:16 GMT -5
SEC ACCUSES CMKM DIAMONDS INC. OF PENNY STOCK FRAUD -------------------------------------------------------------------------------- 9 April 2008 CMKM Diamonds Inc., a Las Vegas-based diamond and gold mining company, has been accused of a penny stock fraud valued at more than US$64 million. According to the Securities and Exchange Commission (SEC), CMKM associates have pocketed millions from selling shares illegally, scamming investors out of more than US$40 million. A media hype surrounding the company based on falsified information which has been disseminated through press releases facilitated the trading volume levels achieved by the CMKM. Billions of shares of alleged unrestricted stock were issued to John Edwards and his nominees, as well as to the nominees of Urban Casavant, the company's Chief Executive Officer. According to the SEC, Casavant pocketed approximately US$31.5 million while Edwards made nearly US$27 million. The Securities Exchange Commission has launched an investigation. www.diamondintelligence.com/magazine/magazine.asp?id=6270 |
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Post by Franko10 ™ on Apr 9, 2008 9:18:35 GMT -5
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. 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. www.lvrj.com/news/17415609.html |
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Post by Franko10 ™ on Apr 9, 2008 9:19:10 GMT -5
SEC COMPLAINT FILED 40,000 investors lose $64m in CMKM Diamonds stock scheme The Securities and Exchange Commission has filed charges against CMKM Diamonds, accusing the former junior explorationist of fraud in a $64 million scheme. Author: Dorothy Kosich Posted: Wednesday , 09 Apr 2008 RENO, NV - CMKM Diamonds was a penny stock that rarely traded above 2 cents a share, run out of a living room in the gambling Mecca of Las Vegas, Nevada. Yet, the pink-sheet listed company, which claimed to be in the diamond and gold business, would develop a devoted shareholder following that ultimately lost millions of dollars, who were fooled by the power of promotion. CMKM claimed it had acquired several Saskatchewan mining claims in the Fort a la Corne area. According to a complaint filed by the SEC this week, the actual mineral value of those claims was obscured by a scheme that might have astonished even P.T. Barnum in its scope and breadth. Company CEO Urban Casavant managed to take in $53 million selling 259 million shares from 2003 to 2005. The SEC says he generated investor interest by using false press releases, distributing news stories in which an investment pitch has been inserted, utilizing Internet chat boards (especially PalTalk), and entering "funny car" race events across the U.S. He even managed to convince a former top executive for billionaire Howard Hughes, Robert Maheu, a former FBI agent, to serve as co-chairman of the CMKM board and as chairman of the audit committee. The SEC filed a civil suit this week in U.S. federal court against 14 defendants involved in the reportedly illegal issuance and sale of unregistered stock of CMKM Diamonds. The commission claims that John Edwards, the scheme's mastermind, Urban Casavant and their nominees sold their shares into the public markets for at least $64.2 million in profit, "much of which was paid to Cassavant to support his extravagant lifestyle." The SEC believes Edwards profited by $26.4 million through sales from a single broker-dealer, Casavant profited by about $31.5 million, and Casavant's nominees pocketed about $6.3 million. The agency said 40,000 investors purchased CMKM stock from January 2003 through May 2005 without knowing Casavant actually ran CMKM out of his house, and that the company's primary activity "was to issue and promote its own stock." In court documents filed in Las Vegas, the SEC blamed "the combination of false information about the company and substantial trading volume, facilitated by sales in an unregistered distribution" for inducing these investors to buy the stock. Canada StockWatch reported in 2004 that Hal Engel of WillyWizard.com, a financial news media investor's hub, "was an early cheerleader" and promoter of CMKM, as well as The Green Baron group, which called CMKM "the stock plan of a lifetime." Christian Traders also spread the good word about CMKM. A virtual chat room called Sterling's New Classroom on PalTalk was crowded to overflowing with its contingent of CMKM shareholders, according to StockWatch. Casavant even literally formed an investment "vehicle", CMKXtreme. This team of motorbike, truck and funny car races traveled across the United States to a series of monthly races, advertising CMKX, CMKM's stock symbol. Ironically, car race fans would prove a lucrative audience for the erstwhile promoters to pluck clean. "Hundreds of CMKM shareholders attend the races and visited the CMKM-sponsored tent, where they could study a map of CMKM's alleged mineral claims, watch a video loop of CMKM's purported drilling work, and meet and greet Casavant and his family," according to the SEC. CMKM's transfer agent, 1st Global Stock Transfer, which was owned and run by Helen Bagley, "issued sheaves of unlegended stock certificates," which the SEC says were deposited by Edwards and others with various broker-dealers, including NevWest Securities Corporation and its employees, Anthony Santos, Sergei Rumyantsev and Daryl Anderson, who sold the shares into the market. "Promptly after selling CMKM stock, Edwards and the others wired the proceeds to a series of bank accounts, providing large sums to Casavant, and used the money for various purposes including paying gambling debts, investing in real estate, and generating more shareholder interest," according to the SEC. As New York Times Chief Financial Correspondent Floyd Norris noted in September 2006, CMKM even managed to wring a considerable amount of publicity by hiring Robert Maheu, the former FBI agent who worked as chief of Nevada operations for Howard Hughes. However, Maheu later told an administrative law judge that he did not know how many employees CMKM had or what they did. He had admitted he had never visited the company's offices, therefore, presumably never visiting Casavant's Las Vegas home. On March 3, 2005, the SEC ordered a 10-day trading suspension and began an administrative proceeding to revoke the registration of CMKM stock. Ironically, individuals behind the CMKM fraud continued to sell stock the day after an evidentiary hearing made public substantial negative information about the company. By October 2005, the commission revoked the registration of CMKM stock, effectively ending public trading. Urban Casavant currently lives in Canada. John Edwards is a British Citizen who no longer lives in Las Vegas, but still conducts his business activities through several dozen corporate entities, according to the SEC. Ginger Gutierrez served as Casavant's personal assistant and secretary. James Kinney sold substantial quantities of CMKM stock and transferred a large part of the proceeds to Casacant-controlled accounts through Part-Time Management, a shell corporation he jointly controlled with Gutierrez. Boca Raton, Florida, couple Anthony and Kathleen Tomasso acted as nominees for Edwards and sold CMKM stock on his behalf. Brain Dvorak, now living in Boulder, Colorado, served as the Las Vegas attorney for CMKM, and "prepared hundreds of bogus opinion letters supporting the issuance of purportedly unrestricted CMKM stock" and also operated the now defunct website www.144opinionletters.com, according to the SEC. From the period of November 2002 through 2005, the SEC says CMKM increase the number of its authorized shares five times, from 10.5 billion to a stunning 800-billion shares. By March 2007, Casavant resigned all of his roles at CMKM and appointed a shareholder to take his place. The SEC says the company "currently has no operations or assets of significant value." Last month, Kevin West, now CEO, President and Chairman of CMKM Diamonds, wrote in a shareholder letter, "I must say that my seven months as interim CEO was not a good experience. ...The facts uncovered since accepting the job as permanent CEO have also proven quite a different story to the ones I was being told [by Casavant and Michael Williams] and a whole new set of facts came to light." West said he has made contact with many of the law enforcement agencies and regulatory bodies investigating the company. He also provided numerous files and documents "which contained information that I believe may be of some help to government investigators. It should come as no surprise that there are criminal investigations and SEC enforcement investigations that have been ongoing in CMKM for several years now." He warned that current and potential future shareholders should not hold hope for an eventual payout from these investigations and legal actions. "While it is our plan to eventually return to a trading status of some kind, we cannot even contemplate becoming publicly traded in any form until we can build a real business that has tangible assets, a full board of directors, a management team and a business plan that has foreseeable revenues. In other words...a real business," West declared. The company is now operated out of Texas. Meanwhile, on April 7, the SEC charged CMKM, Casavant, Edwards, Gutierrez, Kinney, the Tomassos, 1st Global, Bagley, NevWest, Anderson, Rumyantsev, Santos and Dvorak with violating Section 5 of the Securities Act by participating in an unregistered distribution of securities. CMKM and Casavant were also charged with violating the antifraud provisions of the Securities Exchange Act. The commission also charged Casavant with aiding and abetting CMKM's violations of the Securities Act. The agency seeks a permanent injunction against all the named defendants, and numerous other orders and prohibitions. The commission said its investigation is continuing. www.mineweb.com/mineweb/view/mineweb/en/page66?oid=50436&sn=Detail |
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Post by Franko10 ™ on Apr 9, 2008 9:35:38 GMT -5
SEC Files Charges Against CMKM Diamonds Associated Press 04.07.08, 5:06 PM ET WESTMINSTER, Colo. - The Securities and Exchange Commission on Monday filed charges against CMKM Diamonds Inc., accusing the tiny mining company of violating federal securities laws by fraudulently issuing "hundreds of billions of shares," In a complaint filed in U.S. District Court for the District of Nevada, the SEC alleged that the company, CEO Urban Casavant and several others "conspired to illegally issue and sell unregistered stock" and "lined their pockets with more than $64 million from 40,000 nationwide." The complaint alleges that Casavant generated investors' interest in the company through false press releases, Internet chat boards and funny-car race events in events across the country, without disclosing that he ran this purported gold and diamond company from his house in Las Vegas. The SEC complaint charges CMKM, a broker dealer and transfer agent involved and 11 individuals including Casavant. The commission identifies in its complaint John Edwards as the mastermind of the scheme. The SEC alleges that Edwards and others sold their unregistered stock into the public markets. The SEC alleges that Edwards profited by about $26.4 million from sales through a single brokerage firm and that Casavant received about $31.5 million. The complaint alleges that CMKM improperly issued up to 622 billion shares of purportedly unregistered stock between January 2003 and May 2005. The SEC claims that these stock issuances were based in large part on "inadequate, suspect and inconsistent" written authorization and opinion letters prepared by company lawyer Brian Dvorak. CMKM transfer agent 1st Global Stock Transfer LLC and owner Helen Bagley are also charged with issuing stack of stock certificates without restrictive legends based on these faulty documents. The SEC is seeking permanent injunctions against the defendants and disgorgement of profits. The Commission is also seeking penny stock bars against each named individual defendants and an order prohibiting Casavant from acting as an officer or director of any public company. The SEC revoked the registration of CMKM in October 2005 after the company failed to file annual and quarterly financial reports since 2002. Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed www.forbes.com/feeds/ap/2008/04/07/ap4863449.html |
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Post by Franko10 ™ on Apr 10, 2008 5:24:23 GMT -5
Probe uncovers talent for hype but no diamonds SEC alleges Saskatoon promoter's CMKM had no assets, kept no financial records and forged company documents PAUL WALDIE April 10, 2008 Urban Casavant had big plans when he left Saskatoon for Las Vegas in 2002. Mr. Casavant arrived in Nevada with a clutch of mineral claims and a knack for promotion. With the help of some local penny-stock promoters, he launched CMKM Diamonds Inc. and listed it on the over-the-counter market. The company issued roughly 800 billion shares, promising investors that for $100 they could buy a million shares and become millionaires when the company's supposedly massive diamond find in Saskatchewan panned out, according to allegations filed in court. There were also promises of gold and uranium in South America, documents allege. Mr. Casavant recruited former FBI agent Robert Maheu, once Howard Hughes' right-hand man, as co-chairman, even though he was nearly 90 years old at the time. To add to the hype, Mr. Casavant launched the CMKXtreme funny car team and entered it in drag races across the United States, telling race fans about CMKM at each stop. The cars were emblazoned with the company's stock symbol, CMKX, and carried slogans such as "Got CKMX?" and "To DA Moon! CMKX.net". The promotion worked. In three years, CMKM sold $200-million worth of stock and attracted more than 40,000 investors. On some days, two billion shares changed hands. But soon the U.S. Securities and Exchange Commission began investigating. The commission revoked CMKM's share listing in 2005 and filed a lawsuit this week in Nevada against Mr. Casavant and others. The commission alleged CMKM had no assets, kept no financial records and forged company documents. As for the money raised, the SEC alleged much went to cover Mr. Casavant's gambling debts and to pay for real estate. The SEC alleged Mr. Casavant pocketed nearly $40-million. None of the allegations have been proven. Mr. Casavant, 51, has not filed a statement of defence. Mr. Casavant resigned as chief executive officer in 2007, leaving $550.58 in the company bank account and telling investors: "My health issues are forcing my resignation." New CEO, Kevin West, has launched lawsuits to try to recover money for shareholders. He has also urged investors to "ignore many false rumours and tune into the company website for factual information." www.theglobeandmail.com/servlet/story/LAC.20080410.RDIAMOND10/TPStory/Business |
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Post by Franko10 ™ on Apr 10, 2008 9:39:59 GMT -5
The Owners Group Inc. (www.TheOwnersGroupInc.com) Special 2 hour Faulking Truth show with Mark Faulk on TogiNet Radio www.toginet.com Friday April 11th at 10:00 am EDT Diamond in the rough Ex-mine CEO allegedly sold billions of shares to investors in Canada, U.S. Chris Purdy, TheStarPhoenix.com Published: Wednesday, April 09, 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. Casavant is alleged to have personally pocketed at least $31.5 million while running the scheme out his home in Las Vegas. Faulk said Casavant blew most of the money on his extravagant lifestyle, which included lavish homes and nights out drinking and gambling. Casavant was a known "high-roller," who would often gamble more than $100,000 a night at various casinos, said Faulk. 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, Casavant 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 Casavant's wife. 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 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 of 2007, Casavant resigned from CMKM. It's believed he returned to Canada. Molly White, an SEC lawyer involved with the case, said 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, 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 Casavant from acting as an officer or director of any public company in the U.S. 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. chpurdy@sp.canwest.com Newsletter Online John Martin - CEO The Owners Group Inc. Disclaimer/Disclosure: www.theownersgroupinc.com/disclaimer.php |
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Post by Franko10 ™ on Apr 10, 2008 13:17:32 GMT -5
Diamond mine scam netted more than $64-million: SEC
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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Post by Franko10 ™ on Apr 10, 2008 13:17:49 GMT -5
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Post by Franko10 ™ on Apr 10, 2008 13:54:39 GMT -5
Here's an mp3 for your collection. Its from some Canadian radio station: By: CHICPICK 10 Apr 2008, 01:00 PM EDT Msg. 31083 of 31090 Jump to msg. # URBAN CANADIAN RADIO NEWS, >>> www.zshare.net/audio/103338199e9cf464/ |
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Post by Franko10 ™ on Apr 10, 2008 15:52:52 GMT -5
Diamond scam involving Canadian raked in $64M, SEC says Last Updated: Thursday, April 10, 2008 | 1:06 PM CT Comments1Recommend6CBC News A Saskatchewan businessman is among 11 people facing legal action in the United States for an allegedly fraudulent stock scheme involving hundreds of billions of shares and 40,000 investors. The U.S. Securities and Exchange Commission filed a civil complaint in a Nevada court Monday against Urban Casavant, 51, formerly of Prince Albert, Sask. Ten other people and three companies were also named in the action. They're accused of illegally issuing and selling 622 billion shares of CMKM Diamonds Inc., which operated in Las Vegas. Documents filed with the court allege shares of CMKM that were issued between January 2003 and May 2004 generated at least $64.2 million in profit, "much of which was paid to Casavant to support his extravagant lifestyle." The SEC claim alleges Casavant, the former CEO and chairman of the board of CMKM, used the money for various purposes, including paying gambling debts, investing in real estate and "generating more shareholder interest." Casavant made a name for himself in Saskatchewan earlier in the decade as a promoter of various diamond ventures in the Prince Albert area. He was living in Las Vegas during the period the SEC is investigating. Casavant generated "shareholder interest," the SEC alleges, by using false press releases, internet chat boards and funny car race events around the U.S. One CMKM press release said the company was promoting its own diamond brand at a time when it had not found a single diamond. What CMKM did have was "largely untested mineral claims in Saskatchewan," the SEC says. Another press release issued in 2004 announced the discovery of kimberlite ore — the ore in which diamonds are usually found — even though the ore had actually been discovered in 1996. Perhaps Casavant's most effective tool, the SEC said, was "CMKXtreme," a team of motorbike, truck and funny car racers. CMKM logos were plastered on the race cars as well as on trucks, banners, billboards, and crew-member shirts. "Hundreds of CMKM shareholders attended the races and visited the CMKM-sponsored tent, where they could study a map of CMKM's alleged mineral claims, watch a video loop of CMKM's purported drilling work and meet and greet Casavant and his family," the document filed in court says. According the SEC, CMKM had no meaningful operations other than issuing and promoting its own stock. Over 20 months, the company's stock price fluctuated from 1/100th of a cent to 1/10th of a cent. About 40,000 people bought shares without knowing Casavant ran the company from his Las Vegas home, the documents say. The SEC said Casavant currently lives in Canada, but did not say where. In October 2003, the Saskatchewan Financial Services Commission issued a cease-and-desist order to Casavant in connection with CMKM. Casavant resigned all of his positions in CMKM about a year ago. The SEC is seeking penalties and a permanent injunction against the defendants to prevent them from being officers in U.S. companies. www.cbc.ca/canada/saskatchewan/story/2008/04/10/cmkm-diamond.html |
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Post by Franko10 ™ on Apr 11, 2008 15:00:54 GMT -5
Accused fraudster banned from trading Chris Purdy, The StarPhoenix Published: Friday, April 11, 2008 Any stock market bans issued out of a pending U.S. securities trial cannot be imposed across the border on alleged fraudster Urban Casavant. But a previous order issued by the Saskatchewan Financial Services Commission (SFSC) remains in effect, banning the Prince Albert man from dealing securities in the province. An order preventing Casavant's former diamond mining company, CMKM Diamonds Inc., from selling shares is also in place in Manitoba.  Urban Casavant The Alberta Securities Commission held a hearing Wednesday seeking a reciprocal order. That decision is pending. Casavant, a 51-year-old former prison guard and U-haul franchise owner in Prince Albert, was among 11 people charged earlier this week with fraud and other offences by the U.S. Securities and Exchange Commission (SEC). The SEC alleges the group conspired to illegally sell billions of shares of unregistered CMKM stock, stealing at least $64 million from 40,000 investors around the world between 2003 and 2005. The company claimed to hold mineral rights in the Fort a la Corne region east of Prince Albert and sent out phony media releases about its discoveries. Casavant, running the scheme out a home in Las Vegas, allegedly pocketed $31.5 million and blew most of the money on a lavish lifestyle that included high-roller gambling at casinos. He resigned from the company in 2007 and returned to Canada. "He's totally wrongly accused," Casavant's brother Victor said from his home in Vegreville, Alta. on Thursday. He refused to comment further on the case. Victor Casavant was sanctioned in Alberta in 1995 for improperly distributing securities from his company Striker Minerals Ltd. He returned $60,000 to one shareholder and paid a $1,000 fine. The SEC and SFSC both issued temporary cease-trade ordered against Casavant and CMKM in 2004. The following year, Saskatchewan extended its order indefinitely and the SEC issued a final order de-registering the company's stock. The current SEC charges relate to a civil case seeking fines and the return of what's left of the stolen investment money. The SEC is also seeking an order preventing Casavant from acting as an officer or director of any public company in the U.S. chpurdy@sp.canwest.com © The StarPhoenix (Saskatoon) 2008 |
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Post by Franko10 ™ on Apr 18, 2008 7:09:44 GMT -5
Ain't nothing like the real thingLegitimate resource plays in Saskatchewan, such as Athabasca Potash, rise above the pretenders Murray Lyons, The StarPhoenix Published: Friday, April 18, 2008 My brother-in-law phoned from Calgary the other night asking for my opinion of Athabasca Potash Inc. (API). His broker keeps telling him it may be the best way for an investor to take advantage of the potash boom if they missed the boat with Potash Corp. of Saskatchewan or Agrium Inc. I am not qualified to advise people on stocks, but I have known Dawn Zhou, the president and CEO of API, for a number of years. I wholeheartedly agree with the opinion of several observers who tell me Zhou's determination and ability to carry a project through to completion are not to be underestimated. I last wrote about API in December, just ahead of an IPO that raised almost $50 million for its potash exploration work near Burr, north of PotashCorp's Lanigan mine. With the huge price increase Canpotex and producers in Russia and Belarus have been able to extract from India and China in the past month, the share price of Athabasca Potash -- API, if you're checking it by symbol on the TSX -- got closer to the $10 mark on Thursday. Its IPO price was $4.25. That means a company that may be at least five years away from producing potash already has a market cap greater than $300 million. DAWN ZHOU HAS A VISION My brother-in-law wanted to know how good the chances are that Zhou's company could become a potash producer. My (unqualified) reply was that either Zhou will find the $5 billion in Canada or offshore in China to finance a new mine or PotashCorp will wait it out a few more years, let API spend its money confirming the size of the deposit, and then launch a takeover. And why wouldn't PotashCorp, which now has a greater market cap than some of Canada's big banks, not want to get its hands on a potash deposit that would have a lot of synergies with its existing Lanigan mine? I mention the API story because it reflects the new Saskatchewan and its ability to attract and retain an entrepreneurial visionary such as Zhou. Plus, the story of how API was brought into being contrasts sharply with the sad, but almost funny, story of CMKM, the Saskatchewan diamond company that never really was. In the case of API, you have Zhou, who trained in geology and who worked for a number of years examining the record of drilling activity from the 1950s, when the potash industry began in the province. Prior to going public, Zhou worked with people in the mining industry and raised capital privately so API could get its claims staked, begin to do the drilling work and start a scoping study. And when she did take her company public, Zhou spent the extra money and did the due diligence to be on the TSX big board. Her board of directors includes credible people from the mining industry, including chair Ken MacNeill, best known for his leadership at Shore Gold Inc., the company whose work and belief in diamonds will determine whether Saskatchewan's real diamond exploration play will produce a working mine at Fort a la Corne. By contrast, the CMKM story took place on the margins of Fort a la Corne and on the margins of what most people consider legitimate stock markets. It was all led by a man who once ran a place from which you can rent a moving van. Any savvy investor paying attention to mining exploration cares about things like stock dilution and a starting point that shows some value. What sort of investor would snap up shares priced at one hundredth of a cent each and then later are issued at one thousandth of a cent? DOING BUSINESS AT STOCK CAR TRACK Ever since the Bre-X scandal, market regulators are seeking assurance that exploration companies are telling the truth to their shareholders. That's done by hiring independent companies to do mine engineering and geology assessments. This independent assessment goes by the bureaucratic sounding National Instrument 43-101. No matter its title, no company raising more money to develop its mineral deposits wants to be anything but 43-101 compliant. Which gets us back to CMKM. What sort of investor would not freak out if a company issues billions of new shares on an ongoing basis without showing any results, other than a few photos on websites showing a drill rig working away at the town dump in Smeaton? What sort of investor would buy a million "shares" for $1,000, based on hearing about it at a promotional tent at a stock car race? Would it be the kind of individual who gets advice on investing from Internet stock chat sites that can easily be manipulated by insiders? As a keen American observer who has followed the CMKM story told me earlier this week, it would either make a great movie or a great PhD dissertation on the power of the Internet to create a cult of believers who have no business dabbling in the stock market at all, especially a stock market that is commonly called the "pink sheets." It's a good thing the story of Saskatchewan's resource boom is resonating in legitimate circles in North America. Because there are many legitimate companies led by people with real expertise, or perhaps merely because of 43-101, the CMKM story doesn't have the power it once would have to taint honest Saskatchewan resource plays. mlyons@sp.canwest.com © The StarPhoenix (Saskatoon) 2008 www.canada.com/saskatoonstarphoenix/news/business/story.html?id=2a2da83d-055e-483e-8a54-6842dbf30641&k=14045&p=2
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