Post by Franko10 ™ on Jun 17, 2005 7:17:04 GMT -5
Although Lee Webb puts a spin by inserting his personal comments within the testimony ~~~ The testimony was pretty much on line.
The only thing that needs to be considered (during the testimony) was the "Physical Features" and "Tone of Voice" that transpired.
www.stockwatch.com/swnet/newsit/newsit_newsit.aspx?bid=U-s0120970-U:CMKX-20050616&symbol=CMKX&news_region=U
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Mr. Stoecklein next called Mr. Maheu to testify on behalf of CMKM.
As previously reported by Stockwatch, Mr. Maheu's long and interesting career included a stint as an FBI agent, some undercover work, cut-out work for the Central Intelligence Agency, private investigation work and approximately 10 years spent working for billionaire Howard Hughes before he was fired in 1970.
The 87-year-old Mr. Maheu is clearly held in very high regard by CMKM's faithful followers. Indeed, he is their latest champion. The approximately 50 CMKM shareholders who attended the administrative proceeding awaited his testimony with great anticipation.
After the witness was sworn in, Mr. Stoecklein asked Mr. Maheu to state and spell his name for the record. He then turned with a request to Judge Murray.
"Your Honor, for purposes of not putting his personal address on the record, I'd rather not ask him that question because I do have concern with the Internet and everything with his personal address," Mr. Stoecklein said.
There was no objection from the SEC, so Judge Murray let it pass.
Mr. Maheu told the court that he had joined CMKM's board of directors as co-chairman in early February at the request of Mr. Casavant.
"I'm a little curious now, in terms of CMKM Diamonds, why you would have taken the position of coming on as a board member," Mr. Stoecklein subsequently prompted.
"Well, I've always been challenged -- I mean intrigued with challenges and difficult assignments," Mr. Maheu began. "I'm also interested in the plight of stockholders wherever they may be.
"I happen to have lived my life in such a way that I've never feared a full background investigation, and I thought that I could make a contribution."
"What background would you have that you believe would help this company, CMKM Diamonds, to do anything in terms of corporate management?" Mr. Stoecklein asked.
"Well, I understand the necessity of a publicly held company to be compliant," Mr. Maheu said. "And I'm not a novice in the world of being in compliant -- of an entity being in compliant.
"I had the privilege 50 years ago to set up the security and compliance divisions of the Small Defense Plant Administration. It was an entity that had been structured by the government to help start-up companies and small businesses.
"I learned very early on that you cannot help the ills of a small company or any company just by flowing money in their direction. I learned the value of compliance. And I made sure that the Small Defense Plant Administration was always in compliance.
"By that, I mean if, in fact, we made a contribution to a small business, we made sure that the money was used within certain parameters."
"What was the job that Mr. Casavant expected from you as a board member?" Mr. Stoecklein asked.
"I don't know exactly what he expected from me, but I can tell you what I told him," said Mr. Maheu. "That if I took on this assignment, I would surround myself with a team that would hopefully clear up mistakes of the past that might have been made, and that I would insist that from hence on that the company be responsive and comply with all regulatory agencies."
"Did you have any apprehension about joining the board of a company that had been under an SEC investigation?" Mr. Stoecklein asked.
"No," said Mr. Maheu.
"You didn't know about the investigation before you joined the board, didn't you?" Mr. Stoecklein asked rather awkwardly.
"Well, no, I knew there were problems, but that did not bother me," Mr. Maheu said. "I've been there before."
"But let me ask the question again," Mr. Stoecklein suggested. "Did you realize when you joined the board that there was, in fact, an SEC investigation?"
"Oh, yes, I did," Mr. Maheu said.
Mr. Maheu went on to testify that he was being paid $40,000 per month as a board member.
"A month?" Judge Murray queried.
"A week," Mr. Maheu replied, then corrected himself. "A month. Month. I'm sorry. I'm -- I was trying to get a raise."
"You did," Judge Murray quipped. "You did."
Following that exchange, Mr. Stoecklein picked up his direct examination.
"You mentioned a moment ago of the reasons why you joined the board," Mr. Stoecklein said. "What has been accomplished, in your mind, in terms of compliance?"
"I think that we have put together a team that has complied with my request and I hope that the work product that we're producing now will be evidence that we have tried," Mr. Maheu replied.
Judge Murray had some questions regarding that testimony.
"Could I just ask, have you been in the courtroom and heard the testimony of some of the prior witnesses?" the judge asked.
"I have not, Your Honor," Mr. Maheu replied.
"Well, would it surprise you that -- and counsel correct me if I'm wrong -- that some of the prior witnesses have said in the period since you joined after February of 2005, that they requested data, books and records from the company and were not able to get them as of yesterday or today?" Judge Murray asked.
"I'm not familiar with that testimony," said Mr. Maheu.
"How can they have -- if I'm correct that they did so testify, and the record will say whether they did or they didn't, how can they have given that testimony if you're sitting here and telling me that since February your team has made all these great forward progress towards fulfilling the reporting requirements?" Judge Murray queried.
"To my knowledge, they have furnished the information that we have requested," Mr. Maheu said. "I'm not aware of the testimony to which you refer."
"Who's 'we have requested?'" asked Judge Murray.
"That I have requested," Mr. Maheu said. "It was my duty to request it and I have requested it."
As Judge Murray continued, Mr. Stoecklein attempted to intervene, suggesting, among other things that people do not generally go to a board member who had just joined the company a short time ago in order to obtain documents from several years ago.
"But he says he's been on the board since February and he's shaping the company up," Judge Murray said.
"That's correct," Mr. Stoecklein said.
"And, yet, the accountants have been looking for information since February and this is May and they haven't been getting the information and he doesn't know anything about it," Judge Murray said.
"Are you suggesting that Mr. Maheu would have that information from three years before he joined the company?" Mr. Stoecklein asked the judge.
"Well, he should know that the accountants were looking for it and haven't been able to get it," Judge Murray said.
"Am I correct that you were unaware that accountants have been asking for information since February, March, and April and haven't been able to get it from the company?" Judge Murray asked the witness.
"I was unaware -- I was not unaware that they were asking for the information," Mr. Maheu said. "But I was unaware that the information was not progressing."
With that answer to the judge, and perhaps somewhat surprisingly, Mr. Stoecklein said he had no further questions for Mr. Maheu.
Mr. Frizzell rose to ask a few questions on cross-examination.
Among other things, Mr. Frizzell elicited testimony that Mr. Maheu had known CMKM's lawyer Mr. Stoecklein for about 15 years. He also testified that financial and reporting work was done in Mr. Stoecklein's offices, in addition to legal work.
"When you said you met with people, you met with people other than Mr. Stoecklein; did you not?" Mr. Frizzell asked.
"Yes, I did," Mr. Maheu replied.
"And do those people actually do accounting things and auditing type things?" Mr. Frizzell queried.
"They didn't do it in front of me, but we certainly had discussions," said Mr. Maheu.
"And you discussed with them things that you felt like needed to be done; is that correct?" the lawyer asked.
"Everything that had to be done in compliance with the regulatory body, yes," Mr. Maheu said.
Mr. Frizzell later asked Mr. Maheu to provide the names "just a few" of the companies for which he had served as chairman or some other board position. As it turned out, it was a short list.
"Well, I'm chairman of the board of the Da Vinci Franklin," Mr. Maheu said.
"What kind of business is that?" Mr. Frizzell asked.
"It's a fund that we have to aid small and start-up businesses," Mr. Maheu replied.
"Okay," said Mr. Frizzell. "Another company, please?"
"I have been an advisor to other companies," Mr. Maheu said. "I have no recollection of being -- of having been on the board of other companies."
Before passing the witness, Mr. Frizzell drew from Mr. Maheu that he believed he would be able to assist CMKM in filing its required reports.
Ms. Hakala's cross-examination was pointed, to say the least.
"Do you have any background in mining?" Ms. Hakala asked.
"No, ma'am," Mr. Maheu replied.
"Do you believe that CMKM should promptly file its periodic reports?" the SEC lawyer asked.
"I most assuredly do," Mr. Maheu said.
"When do you anticipate those reports will be filed?" the lawyer queried.
"As quickly as we can," said Mr. Maheu.
"Can you set a date by which those reports will be filed?" asked Ms. Hakala.
"As soon as they are ready, ma'am," Mr. Maheu answered.
"Can you set a date by which those reports will be ready?" she asked.
"I cannot," said Mr. Maheu. "But I assure you that I will do my best to comply with your request. I feel here that we have a partnership of sorts, I mean the government and we have a partnership to save these stockholders, and I will do my best to do that."
"You referred to a team," Ms. Hakala said. "Who is your team?"
"My team is Don Stoecklein and the group that he had put together," Mr. Maheu said.
"Do you know the names of the other people in that group?" Ms. Hakala asked.
"Yes, I do," said Mr. Maheu.
"What are those names?" Ms. Hakala queried.
"Mr. Anthony DeMint," Mr. Maheu began. "Suzanne and I cannot remember her last name. And -- and the lady who will be testifying after me, an attorney. I cannot -- "
"You don't remember her name?" Ms. Hakala asked.
"Yes, I do remember her name, but I just cannot remember it right now," said Mr. Maheu.
"Does CMKM Diamonds have any offices?" the lawyer continued her questioning.
"I'm sorry?" Mr. Maheu queried.
"Does CMKM Diamonds have any offices?" Ms. Hakala repeated.
"Not to my knowledge," said Mr. Maheu.
"Does CMKM Diamonds have any employees?" the lawyer asked.
"I am told that they do, yes, ma'am," Mr. Maheu replied.
"Who are those people?" Ms. Hakala asked.
"I do not know those people," Mr. Maheu said.
"How many employees does CMKM Diamonds -- " Ms. Hakala began
"I do not know," Mr. Maheu said.
Ms. Hakala went on to ask Mr. Maheu what he knew about CMKM's employees.
"Well, I hope that they're doing their work," Mr. Maheu said. "I mean, I know that they're employees in Canada. They're -- "
"How do you know that?" Ms. Hakala interrupted.
"Sorry?" Mr. Maheu replied.
"How do you know that?" the lawyer repeated.
"I was told that," Mr. Maheu said.
"By whom?" came the next question.
"By Mr. Casavant," Mr. Maheu replied.
"How many employees in Canada?" Ms. Hakala queried.
"I do not know," Mr. Maheu said.
"How much are they paid?" the lawyer asked.
"I do not know," came the response.
"How long have they worked for the company?" she asked.
"I do not know," Mr. Maheu said.
"What do they do?" Ms. Hakala continued.
"I hope they do their work," Mr. Maheu replied.
"What kind of work do they do?" Ms. Hakala quizzed. "What kind of work do they do?"
"I -- they -- they're supposed to work on the properties," Mr. Maheu said.
"Do you know what kind of work they do?" the lawyer pressed on.
"No, I do not," Mr. Maheu said.
The pace of the cross-examination changed as Ms. Hakala referred Mr. Maheu to press releases issued by CMKM that contained claims about financial reporting and bringing the company into compliance with U.S. securities regulations.
In response to a series of questions, Mr. Maheu acknowledged that he did not know what prior progress had been made with respect to those claims or much else about those news releases issued before he joined the company.
As the questions continued, Mr. Maheu proposed that they turn to a press release that he had issued on Feb. 15, shortly after joining the board of directors.
Ms. Hakala rather quickly embraced that suggestion, asking Mr. Maheu to read the first sentence out loud.
"CMKX is currently working toward completing an audit of its financial statements and the preparation of the necessary SEC filings," Mr. Maheu read out from the Feb. 15 news release. "Investors and -- "
"That's enough," Ms. Hakala interrupted. "You're welcome to continue reading. My questions are about that first sentence. It says here that CMKX is working towards completing an audit.
"When this press release was issued, had CMKM ever even started its audit?"
"I read that differently," Mr. Maheu began. "I read that they are working toward completing. Whether the start was pre this or they intended to do it the next day, I don't know, but I read it differently. I'm sorry about that."
"Has an audit of CMKM Diamonds' financial statements even started?" the lawyer asked.
"I'm sorry?" Mr. Maheu said.
"Has an audit of CMKM Diamonds' financial statements even started?" Ms. Hakala repeated.
"As of now?" Mr. Maheu asked.
"Yes," said the lawyer.
"I assume it has, yes," Mr. Maheu replied.
"On what basis do you think that?" Ms. Hakala asked. "Why do you think that?"
"Because that was my impression," said Mr. Maheu.
"What was the basis for that impression?" the lawyer pressed.
"That I have been told that, yes, an audit had been started," Mr. Maheu answered.
"Who told you that?" asked Ms. Hakala.
"I believe it was Doug -- Don Stoecklein," Mr. Maheu replied.
Ms. Hakala referred the witness to another exhibit.
"Mr. Maheu, have you ever seen a general ledger for CMKM Diamonds?" the SEC lawyer asked.
"No, I have not," Mr. Maheu said.
"Do you know how much CMKM Diamonds has in the bank?" she asked.
"No, I do not," Mr. Maheu replied.
"Do you know what the liabilities of CMKM Diamonds are?" Ms. Hakala asked.
"No, I do not," the witness answered.
"Do you know what the assets of CMKM Diamonds are?" Ms. Hakala continued.
"No, I do not," Mr. Maheu said. "Not -- no, I do not."
Before bringing her cross-examination to a close, Ms. Hakala drew from Mr. Maheu that he did not know what had been done with $3-million allegedly received from U.S. Canadian Minerals or $5-million allegedly received from St. George Metals Inc., nor did he know how shareholders or the investing public could find out what happened to that money.
In a short redirect, Mr. Stoecklein revisited the Feb. 15 news release containing the claim that the company was currently working toward completing an audit.
After drawing a confirmation that Mr. Maheu was not an accountant, Mr. Stoecklein suggested that the first sentence of the news release should have stated that CMKM was working towards completing an audit of its financial statements.
"That is correct," Mr. Maheu agreed.
"And did you understand that CMKX retained the services of an auditor in early January to prepare that audit?" Mr. Stoecklein asked.
"Yes, I learned that, yeah," said Mr. Maheu.
Mr. Maheu also testified that he understood that Suzanne Herring had been retained by Mr. Stoecklein's law firm to prepare financial statements to allow the audit to proceed.
Mr. Stoecklein said he had no further questions, but Judge Murray had some closing questions of her own.
"Okay," Judge Murray said to Mr. Maheu. "I want you to understand that sometimes I have to be blunt. Okay?
"Could you explain to me why I might think that they hired you and paid you $480,000 to give some color of legitimacy to this operation? In other words, you evidently have an esteemed reputation.
"So did that thought ever cross your mind, that this company brought you in just to make it look like there was some legitimacy to it and paid you this amount of money?"
"First of all, Your Honor, I've only been paid, so far, $80,000," Mr. Maheu began, receiving an acknowledgement from the judge. "And I would like to believe that, yes, that my background -- and I repeat.
"I can stand any, any full background investigation that any entity can do based on I already have.
"And I think that having spent a lifetime trying to be in that position -- and I do have a great record in business -- that, yes, I would like to believe that they would have hired me for my past experience."
"Has it ever crossed your mind that you're being used?" Judge Murray asked.
"I don't think so, Your Honor," Mr. Maheu said. "No."
With that, Mr. Maheu was excused.
The only thing that needs to be considered (during the testimony) was the "Physical Features" and "Tone of Voice" that transpired.
www.stockwatch.com/swnet/newsit/newsit_newsit.aspx?bid=U-s0120970-U:CMKX-20050616&symbol=CMKX&news_region=U
////////////////////////////////////////////////////
Mr. Stoecklein next called Mr. Maheu to testify on behalf of CMKM.
As previously reported by Stockwatch, Mr. Maheu's long and interesting career included a stint as an FBI agent, some undercover work, cut-out work for the Central Intelligence Agency, private investigation work and approximately 10 years spent working for billionaire Howard Hughes before he was fired in 1970.
The 87-year-old Mr. Maheu is clearly held in very high regard by CMKM's faithful followers. Indeed, he is their latest champion. The approximately 50 CMKM shareholders who attended the administrative proceeding awaited his testimony with great anticipation.
After the witness was sworn in, Mr. Stoecklein asked Mr. Maheu to state and spell his name for the record. He then turned with a request to Judge Murray.
"Your Honor, for purposes of not putting his personal address on the record, I'd rather not ask him that question because I do have concern with the Internet and everything with his personal address," Mr. Stoecklein said.
There was no objection from the SEC, so Judge Murray let it pass.
Mr. Maheu told the court that he had joined CMKM's board of directors as co-chairman in early February at the request of Mr. Casavant.
"I'm a little curious now, in terms of CMKM Diamonds, why you would have taken the position of coming on as a board member," Mr. Stoecklein subsequently prompted.
"Well, I've always been challenged -- I mean intrigued with challenges and difficult assignments," Mr. Maheu began. "I'm also interested in the plight of stockholders wherever they may be.
"I happen to have lived my life in such a way that I've never feared a full background investigation, and I thought that I could make a contribution."
"What background would you have that you believe would help this company, CMKM Diamonds, to do anything in terms of corporate management?" Mr. Stoecklein asked.
"Well, I understand the necessity of a publicly held company to be compliant," Mr. Maheu said. "And I'm not a novice in the world of being in compliant -- of an entity being in compliant.
"I had the privilege 50 years ago to set up the security and compliance divisions of the Small Defense Plant Administration. It was an entity that had been structured by the government to help start-up companies and small businesses.
"I learned very early on that you cannot help the ills of a small company or any company just by flowing money in their direction. I learned the value of compliance. And I made sure that the Small Defense Plant Administration was always in compliance.
"By that, I mean if, in fact, we made a contribution to a small business, we made sure that the money was used within certain parameters."
"What was the job that Mr. Casavant expected from you as a board member?" Mr. Stoecklein asked.
"I don't know exactly what he expected from me, but I can tell you what I told him," said Mr. Maheu. "That if I took on this assignment, I would surround myself with a team that would hopefully clear up mistakes of the past that might have been made, and that I would insist that from hence on that the company be responsive and comply with all regulatory agencies."
"Did you have any apprehension about joining the board of a company that had been under an SEC investigation?" Mr. Stoecklein asked.
"No," said Mr. Maheu.
"You didn't know about the investigation before you joined the board, didn't you?" Mr. Stoecklein asked rather awkwardly.
"Well, no, I knew there were problems, but that did not bother me," Mr. Maheu said. "I've been there before."
"But let me ask the question again," Mr. Stoecklein suggested. "Did you realize when you joined the board that there was, in fact, an SEC investigation?"
"Oh, yes, I did," Mr. Maheu said.
Mr. Maheu went on to testify that he was being paid $40,000 per month as a board member.
"A month?" Judge Murray queried.
"A week," Mr. Maheu replied, then corrected himself. "A month. Month. I'm sorry. I'm -- I was trying to get a raise."
"You did," Judge Murray quipped. "You did."
Following that exchange, Mr. Stoecklein picked up his direct examination.
"You mentioned a moment ago of the reasons why you joined the board," Mr. Stoecklein said. "What has been accomplished, in your mind, in terms of compliance?"
"I think that we have put together a team that has complied with my request and I hope that the work product that we're producing now will be evidence that we have tried," Mr. Maheu replied.
Judge Murray had some questions regarding that testimony.
"Could I just ask, have you been in the courtroom and heard the testimony of some of the prior witnesses?" the judge asked.
"I have not, Your Honor," Mr. Maheu replied.
"Well, would it surprise you that -- and counsel correct me if I'm wrong -- that some of the prior witnesses have said in the period since you joined after February of 2005, that they requested data, books and records from the company and were not able to get them as of yesterday or today?" Judge Murray asked.
"I'm not familiar with that testimony," said Mr. Maheu.
"How can they have -- if I'm correct that they did so testify, and the record will say whether they did or they didn't, how can they have given that testimony if you're sitting here and telling me that since February your team has made all these great forward progress towards fulfilling the reporting requirements?" Judge Murray queried.
"To my knowledge, they have furnished the information that we have requested," Mr. Maheu said. "I'm not aware of the testimony to which you refer."
"Who's 'we have requested?'" asked Judge Murray.
"That I have requested," Mr. Maheu said. "It was my duty to request it and I have requested it."
As Judge Murray continued, Mr. Stoecklein attempted to intervene, suggesting, among other things that people do not generally go to a board member who had just joined the company a short time ago in order to obtain documents from several years ago.
"But he says he's been on the board since February and he's shaping the company up," Judge Murray said.
"That's correct," Mr. Stoecklein said.
"And, yet, the accountants have been looking for information since February and this is May and they haven't been getting the information and he doesn't know anything about it," Judge Murray said.
"Are you suggesting that Mr. Maheu would have that information from three years before he joined the company?" Mr. Stoecklein asked the judge.
"Well, he should know that the accountants were looking for it and haven't been able to get it," Judge Murray said.
"Am I correct that you were unaware that accountants have been asking for information since February, March, and April and haven't been able to get it from the company?" Judge Murray asked the witness.
"I was unaware -- I was not unaware that they were asking for the information," Mr. Maheu said. "But I was unaware that the information was not progressing."
With that answer to the judge, and perhaps somewhat surprisingly, Mr. Stoecklein said he had no further questions for Mr. Maheu.
Mr. Frizzell rose to ask a few questions on cross-examination.
Among other things, Mr. Frizzell elicited testimony that Mr. Maheu had known CMKM's lawyer Mr. Stoecklein for about 15 years. He also testified that financial and reporting work was done in Mr. Stoecklein's offices, in addition to legal work.
"When you said you met with people, you met with people other than Mr. Stoecklein; did you not?" Mr. Frizzell asked.
"Yes, I did," Mr. Maheu replied.
"And do those people actually do accounting things and auditing type things?" Mr. Frizzell queried.
"They didn't do it in front of me, but we certainly had discussions," said Mr. Maheu.
"And you discussed with them things that you felt like needed to be done; is that correct?" the lawyer asked.
"Everything that had to be done in compliance with the regulatory body, yes," Mr. Maheu said.
Mr. Frizzell later asked Mr. Maheu to provide the names "just a few" of the companies for which he had served as chairman or some other board position. As it turned out, it was a short list.
"Well, I'm chairman of the board of the Da Vinci Franklin," Mr. Maheu said.
"What kind of business is that?" Mr. Frizzell asked.
"It's a fund that we have to aid small and start-up businesses," Mr. Maheu replied.
"Okay," said Mr. Frizzell. "Another company, please?"
"I have been an advisor to other companies," Mr. Maheu said. "I have no recollection of being -- of having been on the board of other companies."
Before passing the witness, Mr. Frizzell drew from Mr. Maheu that he believed he would be able to assist CMKM in filing its required reports.
Ms. Hakala's cross-examination was pointed, to say the least.
"Do you have any background in mining?" Ms. Hakala asked.
"No, ma'am," Mr. Maheu replied.
"Do you believe that CMKM should promptly file its periodic reports?" the SEC lawyer asked.
"I most assuredly do," Mr. Maheu said.
"When do you anticipate those reports will be filed?" the lawyer queried.
"As quickly as we can," said Mr. Maheu.
"Can you set a date by which those reports will be filed?" asked Ms. Hakala.
"As soon as they are ready, ma'am," Mr. Maheu answered.
"Can you set a date by which those reports will be ready?" she asked.
"I cannot," said Mr. Maheu. "But I assure you that I will do my best to comply with your request. I feel here that we have a partnership of sorts, I mean the government and we have a partnership to save these stockholders, and I will do my best to do that."
"You referred to a team," Ms. Hakala said. "Who is your team?"
"My team is Don Stoecklein and the group that he had put together," Mr. Maheu said.
"Do you know the names of the other people in that group?" Ms. Hakala asked.
"Yes, I do," said Mr. Maheu.
"What are those names?" Ms. Hakala queried.
"Mr. Anthony DeMint," Mr. Maheu began. "Suzanne and I cannot remember her last name. And -- and the lady who will be testifying after me, an attorney. I cannot -- "
"You don't remember her name?" Ms. Hakala asked.
"Yes, I do remember her name, but I just cannot remember it right now," said Mr. Maheu.
"Does CMKM Diamonds have any offices?" the lawyer continued her questioning.
"I'm sorry?" Mr. Maheu queried.
"Does CMKM Diamonds have any offices?" Ms. Hakala repeated.
"Not to my knowledge," said Mr. Maheu.
"Does CMKM Diamonds have any employees?" the lawyer asked.
"I am told that they do, yes, ma'am," Mr. Maheu replied.
"Who are those people?" Ms. Hakala asked.
"I do not know those people," Mr. Maheu said.
"How many employees does CMKM Diamonds -- " Ms. Hakala began
"I do not know," Mr. Maheu said.
Ms. Hakala went on to ask Mr. Maheu what he knew about CMKM's employees.
"Well, I hope that they're doing their work," Mr. Maheu said. "I mean, I know that they're employees in Canada. They're -- "
"How do you know that?" Ms. Hakala interrupted.
"Sorry?" Mr. Maheu replied.
"How do you know that?" the lawyer repeated.
"I was told that," Mr. Maheu said.
"By whom?" came the next question.
"By Mr. Casavant," Mr. Maheu replied.
"How many employees in Canada?" Ms. Hakala queried.
"I do not know," Mr. Maheu said.
"How much are they paid?" the lawyer asked.
"I do not know," came the response.
"How long have they worked for the company?" she asked.
"I do not know," Mr. Maheu said.
"What do they do?" Ms. Hakala continued.
"I hope they do their work," Mr. Maheu replied.
"What kind of work do they do?" Ms. Hakala quizzed. "What kind of work do they do?"
"I -- they -- they're supposed to work on the properties," Mr. Maheu said.
"Do you know what kind of work they do?" the lawyer pressed on.
"No, I do not," Mr. Maheu said.
The pace of the cross-examination changed as Ms. Hakala referred Mr. Maheu to press releases issued by CMKM that contained claims about financial reporting and bringing the company into compliance with U.S. securities regulations.
In response to a series of questions, Mr. Maheu acknowledged that he did not know what prior progress had been made with respect to those claims or much else about those news releases issued before he joined the company.
As the questions continued, Mr. Maheu proposed that they turn to a press release that he had issued on Feb. 15, shortly after joining the board of directors.
Ms. Hakala rather quickly embraced that suggestion, asking Mr. Maheu to read the first sentence out loud.
"CMKX is currently working toward completing an audit of its financial statements and the preparation of the necessary SEC filings," Mr. Maheu read out from the Feb. 15 news release. "Investors and -- "
"That's enough," Ms. Hakala interrupted. "You're welcome to continue reading. My questions are about that first sentence. It says here that CMKX is working towards completing an audit.
"When this press release was issued, had CMKM ever even started its audit?"
"I read that differently," Mr. Maheu began. "I read that they are working toward completing. Whether the start was pre this or they intended to do it the next day, I don't know, but I read it differently. I'm sorry about that."
"Has an audit of CMKM Diamonds' financial statements even started?" the lawyer asked.
"I'm sorry?" Mr. Maheu said.
"Has an audit of CMKM Diamonds' financial statements even started?" Ms. Hakala repeated.
"As of now?" Mr. Maheu asked.
"Yes," said the lawyer.
"I assume it has, yes," Mr. Maheu replied.
"On what basis do you think that?" Ms. Hakala asked. "Why do you think that?"
"Because that was my impression," said Mr. Maheu.
"What was the basis for that impression?" the lawyer pressed.
"That I have been told that, yes, an audit had been started," Mr. Maheu answered.
"Who told you that?" asked Ms. Hakala.
"I believe it was Doug -- Don Stoecklein," Mr. Maheu replied.
Ms. Hakala referred the witness to another exhibit.
"Mr. Maheu, have you ever seen a general ledger for CMKM Diamonds?" the SEC lawyer asked.
"No, I have not," Mr. Maheu said.
"Do you know how much CMKM Diamonds has in the bank?" she asked.
"No, I do not," Mr. Maheu replied.
"Do you know what the liabilities of CMKM Diamonds are?" Ms. Hakala asked.
"No, I do not," the witness answered.
"Do you know what the assets of CMKM Diamonds are?" Ms. Hakala continued.
"No, I do not," Mr. Maheu said. "Not -- no, I do not."
Before bringing her cross-examination to a close, Ms. Hakala drew from Mr. Maheu that he did not know what had been done with $3-million allegedly received from U.S. Canadian Minerals or $5-million allegedly received from St. George Metals Inc., nor did he know how shareholders or the investing public could find out what happened to that money.
In a short redirect, Mr. Stoecklein revisited the Feb. 15 news release containing the claim that the company was currently working toward completing an audit.
After drawing a confirmation that Mr. Maheu was not an accountant, Mr. Stoecklein suggested that the first sentence of the news release should have stated that CMKM was working towards completing an audit of its financial statements.
"That is correct," Mr. Maheu agreed.
"And did you understand that CMKX retained the services of an auditor in early January to prepare that audit?" Mr. Stoecklein asked.
"Yes, I learned that, yeah," said Mr. Maheu.
Mr. Maheu also testified that he understood that Suzanne Herring had been retained by Mr. Stoecklein's law firm to prepare financial statements to allow the audit to proceed.
Mr. Stoecklein said he had no further questions, but Judge Murray had some closing questions of her own.
"Okay," Judge Murray said to Mr. Maheu. "I want you to understand that sometimes I have to be blunt. Okay?
"Could you explain to me why I might think that they hired you and paid you $480,000 to give some color of legitimacy to this operation? In other words, you evidently have an esteemed reputation.
"So did that thought ever cross your mind, that this company brought you in just to make it look like there was some legitimacy to it and paid you this amount of money?"
"First of all, Your Honor, I've only been paid, so far, $80,000," Mr. Maheu began, receiving an acknowledgement from the judge. "And I would like to believe that, yes, that my background -- and I repeat.
"I can stand any, any full background investigation that any entity can do based on I already have.
"And I think that having spent a lifetime trying to be in that position -- and I do have a great record in business -- that, yes, I would like to believe that they would have hired me for my past experience."
"Has it ever crossed your mind that you're being used?" Judge Murray asked.
"I don't think so, Your Honor," Mr. Maheu said. "No."
With that, Mr. Maheu was excused.