doj issues criminal indictments !!!!!

[kenshin7]

Seven years after the saga of CMKM Diamonds, Inc (CMKX) officially began, over four years after the company was revoked by the SEC, and a year-and-a-half after the SEC filed civil charges against eleven individuals and three corporate entities, the Department of Justice unsealed criminal indictments against six individuals in the largest penny stock fraud in history.

Former CMKM CEO Urban Casavant and alleged mastermind John Edwards, along with cohort James Kinney, transfer agent Helen Bagley, attorney Brian Dvorak, and Urban’s secretary Ginger Gutierrez were charged with five counts of securities fraud in the massive and complex scam, which involved the selling of over 700 billion shares of CMKX stock to unsuspecting shareholders for an estimated $250 million.

The 40-page indictment, unsealed today in Las Vegas, included allegations of selling unregistered shares of company stock “by use of the mails, over-the-counter mediums of exchange (e.g, the Pink Sheets), and other means” in violation of federal laws. The indictment states that “JOHN M. EDWARDS, URBAN CASAVANT, HELEN BAGLEY, BRIAN DVORAK, GINGER GUTIERREZ, JAMED KINNEY, and others known and unknown, conspired to fraudulently issue and sell unregistered shares of CMKM stock for the purposes of enriching themselves.”

Casavant was also charged with income tax evasion for failing to report a “large part of the income tax due and owing by him to the United States of America for the calendar year 2004.” The charges allege that Casavant “concealed income from the stock and securities of CMKM Diamonds, Inc., by using nominees to conceal and disguise his interest in the shares and the proceeds, and by routing proceeds to accounts of nominees, corporate alter egos, and other entities” within his control.

The charges also included four “forfeiture allegations,” seeking either fines or property seizure on each count. Each forfeiture count states, “It is the intent of the United States of America to seek forfeiture of any properties of the defendants up to $60,000,000 in United States Currency.”

Timothy S. Vasquez, who was instrumental in the arrest and conviction of John Edwards’ wife Diana Lee Edwards (formerly Diana Lee Flaherty) in 2006, was brought on board to head the criminal task force investigating the CMKX scam earlier this year, helping to breathe new life into an investigation that many people (including this reporter) believed had been shelved for good. The multi-agency task force was comprised of representatives from the DOJ, FBI, IRS, and the SEC. The indictment will be available on the CMKM Diamonds website tomorrow at www.cmkmdiamondsinc.com

Defendants Bagley, Kinney, and Gutierrez, who were arrested in Las Vegas yesterday, and Brian Dvorak, who was apprehended in Colorado, were released on bond today. Defendant John Edwards was arrested on September 7 in England. Extradition proceedings are ongoing. Urban Casavant, believed to be in Canada, is still at large.

With over 300,000 pages of evidence scanned during the discovery process, the trials involving all six defendants could take years, but at least the criminal justice process has officially begun. After years of waiting and hoping, sometimes all but giving up hope, today’s criminal indictments will hopefully offer some degree of closure for the over 50,000 victims in the CMKX scandal.

« Last Edit: Today at 9:44pm by gluggo »

[wiverwey]

Six accused in effort to defraud investors

Indictment describes $60 million stock conspiracy

By CARRI GEER THEVENOT
LAS VEGAS REVIEW-JOURNAL

Six people, including an attorney who once practiced in Las Vegas, are accused of defrauding investors out of more than $60 million by conspiring to issue and sell unregistered shares of stock in a company called CMKM Diamonds.

Their criminal charges were made public Thursday when a federal judge in Las Vegas unsealed a 37-page indictment that describes the scheme. Prosecutors moved to unseal the document, which was filed in May, after five of the defendants were arrested.

Defense attorney Chris Rasmussen described the indictment as lengthy, confusing and complex.

He was appointed to represent Ginger Gutierrez, one of three defendants who made their initial court appearances Thursday before U.S. Magistrate Judge George Foley in Las Vegas.

Rasmussen said his cursory review of the indictment suggested that Gutierrez, 39, had a limited role in the conspiracy.

"She's more of a pawn in this scheme," Rasmussen said.

John M. Edwards, Urban Casavant, Helen Bagley, attorney Brian Dvorak and James Kinney also are charged in the indictment. Only Casavant remains at large.

"Although purportedly a multinational diamond exploration and mining company, CMKM had few assets and did not conduct regular mining operations and did not commercially produce or sell any diamonds," the indictment alleges. "For that matter: CMKM did not conduct regular or meaningful business operations; CMKM did not maintain comprehensible books or records; and CMKM did not even have an office, but instead shared Casavant's home in Las Vegas."

According to the indictment, the defendants conspired between September 2001 and March 2009 to sell unregistered securities, to make false and misleading statements in filings to the Securities and Exchange Commission, and to commit securities fraud.

The indictment also claims the defendants "avoided or failed to file" quarterly and annual reports with the SEC from December 2002 through June 2005.

"At the threshold, the scheme required that the conspirators control a publicly traded corporation," according to the indictment. "The conspirators found a corporate shell suited to their needs in Cyber Mark International Corp."

Cyber Mark had been incorporated in Delaware in 1998, according to the indictment, and had been defunct since 2001.

The document alleges that Edwards used the name "Ian McIntyre" to acquire control over the Cyber Mark corporate shell around September 2001 and that he incorporated a Nevada company with the same name in April 2002.

Casavant later gained control of Cyber Mark, according to the indictment, and the company changed its name in December 2002 to Casavant Mining Kimberlite International.

In February 2004, according to the indictment, the company took the name CMKM Diamonds.

The indictment claims Bagley owned and operated 1st Global Stock Transfer, the stock transfer agent company for CMKM.

Casavant and Edwards conspired with Bagley, "the collusive stock transfer agent, to issue hundreds of billions of unregistered shares of CMKM stock to their nominees, alter-egos, associates and straw-purchasers," according to the indictment.

The document claims Dvorak prepared the majority of the attorney opinion letters "authorizing the issuance of billions of shares of unrestricted CMKM stock."

According to the indictment, Dvorak received at least $495,000 from CMKM, Casavant, Edwards and their associates within a one-year span ending around November 2004.

Attorney John Wesley Hall of Little Rock, Ark., who represents Dvorak in a related lawsuit filed last year by the SEC, said he already established in the civil case that his client did not receive that much money. Hall said Dvorak received about $160,000 for the opinion letters.

"I'm kind of dumbfounded that they charged him, because he's the hardest one to prove," Hall said.

He said Dvorak, who was arrested Thursday at his home in Boulder, Colo., will go to trial in the criminal case.

"He's denying absolutely that he did anything criminal," Hall said.

According to the State Bar of Nevada Web site, Dvorak has been licensed in the state since 1992 and has no record of discipline.

Hall said Dvorak quit practicing law about two years ago and moved to Colorado, where he teaches martial arts. Hall said Dvorak appeared before a judge in Denver on Thursday and was released on his own recognizance.

Kinney, 39, and Bagley, 62, appeared in court Thursday with Gutierrez. All three defendants were released.

Gutierrez and Kinney pleaded not guilty, but Bagley is scheduled to return to court today to enter a plea. Bagley told the judge she had not had a chance to read the indictment.

Prosecutors said Edwards was arrested Sept. 7 in England. Authorities are in the process of extraditing him.

Attorney Jackie Naylor was appointed Thursday to represent Kinney, who was released only after his sister, Jeannie, agreed to take responsibility for him as a third-party custodian.

Naylor said Kinney was convicted in Illinois of transporting marijuana and received 30 months probation. She said he has completed 20 months and has paid a $16,000 fine.

Naylor said Kinney lives with his 6-year-old son but will move in with his sister. The attorney said Kinney and Gutierrez had three sons together, but Gutierrez has custody of the two older children.

Naylor also said Kinney has a job distributing fliers for a Las Vegas nightclub.

Contact reporter Carri Geer Thevenot at [e-mail] or 702-384-8710.




www.lvrj.com/news/six-accused-in-effort-to-defraud-investors-59721022.html

[iq]

I'm ashamed to say this but so far it looks like they will get a slap on the hand while the average investor spent 700,000,000,000*0.005/share is more realistic number and this comes to more like

$350 Million dollars that we are owed!

Selling unregistered shares is a lot like giving people fake money at every major bank in the USA or Canada!

Our brokers knew very well what has happened, and we don't want a fake certificate which are worthless. We want our money back, we want the fees that we have been charged for these illegal activities returned to the investors (a few millions in fees is a lot of money), we want the government to deal with this further. Putting these guys in Jail is just the first step, and thus far they are all denying doing anything wrong.

Why doesn't the FBI figure out who opened up the account for these criminals, then ask them to identify these losers.
There has to be phone records, etc... to prove they have done this fraud. With the world of technology its amazing that they are getting away with this. Also if they can lower the sentence on one of these individuals if they squeel on the others I think we would have a shot at winning this!

They have to do more or they will walk away free.
There have to be experts in this field who can check the records, recordings, people from that timeframe to identify them.
Isn't everything recorded by the banks, I'm sure they will cooperate.