Post by tec1958 on Sept 17, 2009 21:02:20 GMT -5
- DOJ Issues Six Criminal Indictments in CMKM Diamonds Case
by Mark Faulk
Seven years after the saga of CMKM Diamonds, Inc (CMKX) officially began, over four years after the company was revoked by the SEC, and a year-and-a-half after the SEC filed civil charges against eleven individuals and three corporate entities, the Department of Justice unsealed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.
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.
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(Editor’s note: This article will be posted at www.FinancialWire.net as well. We are working on an in-depth article about CMKM Diamonds, Inc. chronicling some of the past year’s events involving the company and the criminal investigation, which should be released in a day or two.)
Mark Faulk, author of “The Naked Truth: Investing in the Stock Play of a Lifetime”, which chronicles the story of CMKM Diamonds (http://www.thenakedtruthbook.com), has written over 150 articles on the topic of financial reform and naked short selling since 2004, and has logged hundreds of hours in radio and television interviews. His articles have been reprinted or excerpted in numerous major publications, including The Huffington Post and Financial Wire, and financial journals such as the prestigious Capco Journal of Financial Transformation. In the fall of 2009, he will complete work on a major documentary about financial fraud, due to be released in December, 2009.
by Mark Faulk
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.
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.
--------------------------------------------------------------------------------
(Editor’s note: This article will be posted at www.FinancialWire.net as well. We are working on an in-depth article about CMKM Diamonds, Inc. chronicling some of the past year’s events involving the company and the criminal investigation, which should be released in a day or two.)
Mark Faulk, author of “The Naked Truth: Investing in the Stock Play of a Lifetime”, which chronicles the story of CMKM Diamonds (http://www.thenakedtruthbook.com), has written over 150 articles on the topic of financial reform and naked short selling since 2004, and has logged hundreds of hours in radio and television interviews. His articles have been reprinted or excerpted in numerous major publications, including The Huffington Post and Financial Wire, and financial journals such as the prestigious Capco Journal of Financial Transformation. In the fall of 2009, he will complete work on a major documentary about financial fraud, due to be released in December, 2009.
