Also Street Wire (U-*SEC) U.S. Securities and Exchange Commission
by Lee M. Webb
CMKM Diamonds Inc. is living up to its billing by critics as an outrageously entertaining subpenny pink sheet soap opera. In a recent episode, CMKM fired its latest auditor, Brad Beckstead of Beckstead & Watts LLP, after he raised concerns about possible illegal activity in the conduct of the company's affairs.
CMKM disclosed in a July 29 filing with the U.S. Securities and Exchange Commission (SEC) that it had terminated the engagement of Beckstead and Watts. Since the termination, CMKM lawyer Donald Stoecklein and Mr. Beckstead have been duking it out in SEC filings.
Mr. Beckstead's engagement with CMKM was even briefer than the short stint served by the company's previous auditor, Neil Levine of Bagell Josephs & Co. LLC, who lasted four months before pulling the plug on the pink sheet promotion. Mr. Beckstead was dumped after only 11 days.
Neither Mr. Levine, who quit, nor Mr. Beckstead, who was fired, performed any actual audit work for CMKM because the massively diluted pink sheet company headed by Saskatchewan native Urban Casavant does not even have complete financial statements, let alone the necessary backup documentation to perform an audit.
While the two auditors' association with CMKM ended differently, neither departure cast the pink sheet company in a favourable light.
Auditor one
After months of prattling on about compliance, including claims that the company was ahead of schedule and close to filing, CMKM hired Mr. Levine on Jan. 10 of this year, paying him a retainer of $100,000. (All amounts are in U.S. dollars.)
Less than two months after Mr. Levine signed on as the company's auditor, the SEC issued a 10-day trading suspension against CMKM and then followed up with an order instituting proceedings against the pink sheet promotion on March 16.
Mr. Levine testified for the U.S. regulator at an evidentiary hearing on May 10. Among other things, Mr. Levine testified that, in spite of repeated requests to Mr. Casavant and others associated with the company, he had not been provided with financial statements or any backup documentation needed to perform an audit.
It was at the May 10 hearing that shareholders first learned that a few days earlier Mr. Levine had notified the company that he was terminating his engagement effective the end of the hearing.
Bill Frizzell, a Texas lawyer allowed limited participation in the proceeding as counsel for a number of CMKM shareholders known as the Owners Group, repeatedly questioned Mr. Levine about his departure during cross-examination.
"Basically in 25 years of doing accounting and asking for records, this isn't a company that me and my firm wants to continue to represent," Mr. Levine said in response to Mr. Frizzell's first question on the matter. "I've asked for records over and over. I don't get any records. And I'll leave it at that."
Rather than leaving it at that, however, Mr. Frizzell pressed on with a similar question.
"My testimony is this isn't the type of company that I want to typically represent, one where the owners take the Fifth Amendment and -- when I do ask for records, and it's frankly become problematic," Mr. Levine answered the Texas lawyer's second question about the matter.
Mr. Frizzell moved on to a few other questions before returning to the subject of Mr. Levine's break with CMKM.
"Is there any particular reason why you chose to withdraw your representation for this company or your attempts to audit this on the day before everyone is headed to Los Angeles for this de-registration hearing?" Mr. Frizzell asked.
"You want to ask me that again?" Mr. Levine asked in return, apparently somewhat incredulously.
"The timing of your resignation," Judge Brenda P. Murray offered, suggesting the question was at least slightly different.
"The timing is that we're a very busy accounting firm," Mr. Levine said. "I'm in the middle of a major Q season, which is the biggest May 15th deadline.
"And frankly, you know, I'm done playing around with whoever I'm going to get documents from or I'm not, and I have to be on standby.
"And we just don't want to represent a company like this anymore."
Mr. Frizzell finally dropped the subject and quickly came to the end of his cross-examination.
Evidently locating an auditor to replace Mr. Levine was a difficult task. It was not until two months later that CMKM disclosed it had found someone willing to sign on for the job.
Auditor two
In the introduction to a posthearing settlement proposal jointly submitted to the SEC enforcement division by Mr. Stoecklein and Mr. Frizzell, it was disclosed that Beckstead & Watts had been engaged on July 11, "after a month of due diligence by the auditor."
Somewhat ironically, the July 12 settlement proposal was submitted on the same day that Judge Murray issued her initial decision in the administrative proceeding against CMKM, ordering the revocation of the company's stock registration.
On July 15, CMKM filed an 8-K with the SEC officially acknowledging the change in auditors.
On July 22, a week after filing the notification regarding the change in auditors, CMKM fired Beckstead & Watts.
That development was not reported in an 8-K filing until July 29, a full week after Mr. Beckstead had been sacked.
The July 29 8-K filing offered some intriguing and arguably less than flattering insights into why Mr. Beckstead had been given the boot just 11 days after signing on as CMKM's independent accountant.
The squabble
At least in small part, the tiff between CMKM and Mr. Beckstead involves money.
A July 28 letter from Mr. Stoecklein's law firm to Mr. Beckstead that is included as an exhibit to the company's July 29 8-K filing opens with the subject of a $75,000 retainer that CMKM paid when the new auditing firm officially signed on. That $75,000 was in addition to a non-refundable $25,000 "due diligence fee" paid to Beckstead & Watts on June 22.
"Your firm was properly terminated as CMKM's independent accounts effective July 22, 2005, only eleven days following your engagement and receipt of an additional $75,000," the Stoecklein Law Group letter addressed to Mr. Beckstead states. "Contrary to your belief, you are not entitled to retain funds not earned by your firm after July 22, 2005."
Apparently CMKM believes that Mr. Beckstead's "demeanor towards CMKM totally changed" following telephone conversations with an unidentified female "employee of a regulatory agency," who had earlier allegedly told the auditor that it was not in his best interest to take the company on as a client.
In subsequent calls, the unidentified regulatory employee allegedly asked for Mr. Beckstead's assistance "in locating individuals that may have been previously associated with CMKM."
"It's not apparent the extent of the conversations you had with this government employee, but from your subsequent actions it appears you no longer desired to be CMKM's independent auditor," Mr. Stoecklein wrote. "However, under the terms of your engagement, it is CMKM's opinion you had to create cause in order to terminate the engagement and keep all funds remaining under your retainer."
Evidently CMKM obliged with the termination, but now wants Mr. Beckstead to return some money.
Perhaps more central to the dispute, and arguably of far more significance to investors, is what Mr. Stoecklein refers to as a "draft" 10A letter written by Mr. Beckstead on July 20.
Under Section 10A of the Securities Exchange Act of 1934, in relevant part, an auditor has an obligation to report any information that is uncovered indicating that an illegal act has or may have occurred.
CMKM did not include Mr. Beckstead's so-called draft letter as an exhibit in its July 29 8-K filing, but it did offer a response to the concerns evidently outlined in that correspondence.
In addressing some of the issues raised by Mr. Beckstead, CMKM seems to rely heavily on the far from comforting argument that the company's financial records are in such disarray that the auditor could not have any foundation for suggesting potentially illegal acts occurred.
Company line
Evidently Mr. Beckstead had some concern regarding a ballyhooed relationship between CMKM and U.S. Canadian Minerals Inc., a former OTC Bulletin Board company that was booted down to the pink sheets after being suspended by the SEC last October and is currently under investigation.
As previously reported by Stockwatch, U.S. Canadian Minerals reportedly poured $13.5-million into CMKM last year under a partially exercised option to boost its stake in the company from 5 per cent to 15 per cent.
In subsequent SEC filings, U.S. Canadian Minerals disclosed that the money it reportedly funnelled into CMKM came from Mr. Casavant and four members of his family.
"First, you questioned the economic substance of a transaction between CMKM and U.S. Canadian Minerals ('UCAD'), a company CMKM has business dealings with and with which your firm was previously the independent accountant, whereby Urban Casavant and his family 'advanced' UCAD approximately $15-million," Mr. Stoecklein wrote.
"You had the opportunity to verbally question Mr. Casavant on this subject and during this process you were informed Mr. Casavant made an investment into UCAD, not advances," the lawyer continued. "Mr. Casavant's personal investments are well outside the scope of CMKM's audit.
"You were entirely informed of CMKM's intentions to fully disclose any and all related party transactions, when identified, in its financial statements and the notes thereto, when completed.
"Regardless of Mr. Casavant's forthright co-operation and honest answers to your questions pertaining to his personal investments, you felt it imperative to make unfounded speculations as to the origins of the funds, even though in your own words 'it's not apparent how the Casavants obtained the $15-million.'"
Mr. Stoecklein did not expand on either Mr. Casavant's "forthright co-operation and honest answers" or Mr. Beckstead's "unfounded speculations" regarding the origin of the $15-million, matters that might be of more than passing interest to investors and regulators, among others.
Mr. Beckstead evidently also raised questions regarding the relationship between CMKXtreme Inc., one of Mr. Casavant's promotional vehicles, and CMKM and whether $4-million spent on promotion and advertising truly advanced the company's best interest.
"We are unaware of any expertise your firm has in the promotion and advertising industries, however, numerous public companies pay millions of dollars per year to sponsor racing and other professional sports teams," Mr. Stoecklein wrote.
"Additionally, it is unclear to us what authority you have as an independent accountant to make judgments upon business decisions made by CMKM management without jeopardizing your independence," the company's lawyer continued. "CMKM's sponsorship of the CMKXtreme racing team has garnered tremendous publicity and has been greatly appreciated by its stockholders.
"As the sole officer and director of CMKM at the time of the payments, Mr. Casavant, irregardless (sic) of his ownership position in CMKXtreme, had full authority to expend corporate funds to promote and advertise CMKM."
While Mr. Casavant may have had the authority to pour millions of dollars into funny car dragsters, not all CMKM shareholders "greatly appreciated" the promotional scheme. Indeed, more than a few shareholders were dismayed at the money and effort directed toward racing rather than mineral exploration.
In any event, the wheels have recently started to come off CMKM's racing promotion. The company dropped its sponsorship of Jeff Arend's funny car last month and Lee Hatch reportedly peeled the CMKM advertising off his Speed Truck after the cheques stopped arriving.
Mr. Beckstead also raised concerns about possible violations relating to loans made to CMKM's officers and directors.
To partially address those concerns, Mr. Stoecklein offered up the assumption that if CMKM's reporting obligations were suspended immediately upon filing a Form 15 on July 22, 2003, which happened to be inaccurate, and not reinstated until Feb. 17 of this year, then CMKM would not be in violation of the Sarbanes-Oxley Act with respect to any loans made during that period.
In her July 12 revocation decision, Judge Murray determined that CMKM's argument that its reporting obligations were suspended upon filing the false Form 15 did not hold water. CMKM filed a petition for review of the initial decision on July 29.
"It was fully understood by you CMKM would address any possible reporting deficiencies and, disclosure obligations related to those deficiencies, if any, would be made once final determinations were made," Mr. Stoecklein went on.
"You openly admit CMKM's books and records are incomplete, which you knew before your engagement, but still felt it relevant to prematurely make unsubstantiated assumptions as to a potential violation," the lawyer wrote.
Mr. Stoecklein then turned to the fired auditor's fourth area of concern, CMKM's spotty financial records.
"Fourth, since its initial meetings in June pertaining to the audit of CMKM and throughout your due diligence period, CMKM was entirely upfront and honest in disclosing to your firm not all documents required to commence an audit were in the possession of current management and CMKM was using its best efforts to obtain records from prior management," Mr. Stoecklein wrote.
CMKM's lawyer did not identify the "prior management" or suggest what portion of the company's missing records might be in the possession of that unidentified management. Earlier in his letter, however, Mr. Stoecklein did disclose that less than 25 per cent of the items on a detailed list supplied by Mr. Beckstead had been rounded up.
"The Board was forthcoming in stating it was currently unable to provide enough information to your firm for the purpose of performing general audit procedures," Mr. Stoecklein continued.
CMKM's board of directors consists of two people: Mr. Casavant, the company's only officer; and 87-year-old Robert Maheu, appointed co-chairman earlier this year and paid $40,000 per month.
During the May 10 evidentiary hearing, Mr. Casavant asserted his Fifth Amendment privilege against self-incrimination and refused to answer any questions. Mr. Maheu's testimony indicated that he was basically clueless about the company's operations and financial records.
"Even with this upfront and honest disclosure, you chose to, within only seven business days, chastise CMKM for the current state of their books and records knowing full well this information was fully disclosed to you prior to you choosing to accept an additional $75,000 and engage as CMKM's auditor," Mr. Stoecklein wrote.
"Lastly, because of CMKM's belief it did not have to file periodic reports from July 22, 2003, through Feb. 17, 2005, your concern over the disclosure of related party transactions is unfounded," Mr. Stoecklein wrote, again contradicting the findings of Judge Murray.
"Further, Urban Casavant, as the sole officer and director of CMKM, had complete authority to enter into transactions on behalf of CMKM, whether these transactions were with related parties or not," Mr. Stoecklein continued.
"In addition, it has always been CMKM's intentions to fully and completely disclose all related party and other relevant transactions as part of its audited financial statements when they are completed, as was discussed with you on several occasions," the lawyer added.
Mr. Stoecklein then served up a few parting words for Mr. Beckstead.
"In closing, your actions in holding CMKM's funds hostage and the potential defamatory and baseless statements contained in your 'draft' letter are truly disappointing," Mr. Stoecklein wrote. "You were made fully aware of CMKM's current status prior to your engagement, however, you chose to engage them, take an additional $75,000 and then within only days, without any attempt to talk with management or any of the other professionals engaged by CMKM, write a letter which contained completely baseless claims.
"Attempting to create cause was the only way for you to end your engagement with CMKM, which would coincidentally entitle you to keep any remaining funds you had on retainer.
"You have recklessly attempted to create cause by failing to comply with the requirements of 10A, refusing to meet with management and/or the Board and continuing with your incessant desire to force public disclosure of your draft letter.
"Your actions have forced CMKM to expend significant additional time and resources into responding to these issues, thus diverting precious resources from its major goals of increasing stockholder value and regaining its reporting status."
While the existence of Mr. Beckstead's draft letter has now been publicly disclosed, even with what can be gleaned from Mr. Stoecklein's perhaps slightly ham-fisted attempt to respond to the issues raised by the auditor, the full content of that July 20 letter remains a mystery.
However, a subsequent formal 10A letter from Mr. Beckstead dated July 28 is included as an exhibit in an Aug. 1 amended 8-K SEC filing.
Auditor fires back
Mr. Beckstead's July 28 letter, which does not include any speculation, unfounded or otherwise, regarding matters such as where members of the Casavant family managed to come up with $15-million, arguably appears more professional and restrained than Mr. Stoecklein's correspondence of the same date. Nonetheless, the fired auditor does land some bruising blows.
According to Mr. Beckstead, Mr. Stoecklein's letter "contains a number of misstatements and misunderstandings."
"First, and among the most important of all, is his statement that CMKM is not an 'issuer' as defined by Sarbanes-Oxley and therefore is not subject to the provisions of that act or the SEC reporting requirements following the initial Form 15 filing on July 22, 2003," Mr. Beckstead states.
Mr. Beckstead goes on to point out that in its own amended Form 15 filing on Feb. 17, 2005, CMKM acknowledged that it actually had 698 shareholders of record, not 300, when it made the original filing, "thereby making the use of Form 15 inapplicable."
"With the original Form 15 inapplicable, it is clear that CMKM was and remained an issuer for the purposes of Sarbanes-Oxley and the filing requirements of the 1934 Act notwithstanding the wrongful filing in 2003 of the Form 15," Mr. Beckstead claims, going on to invite CMKM's lawyer to provide him with an unqualified legal opinion that the company was not an issuer.
Mr. Beckstead also takes issue with Mr. Stoecklein's claim that the auditing firm has refused to return money belonging to CMKM based on an "apparent misunderstanding of the word termination."
"We understand the word 'termination' and we will account for the funds on deposit once our statutorily required services are completed as stated in our earlier response," the auditor says, a reference to correspondence that has not found its way into the public domain. "Mr. Stoecklein's efforts to imply to the contrary are disingenuous."
Citing the relevant portion of Section 10A regarding an auditor's obligation to report possible illegal acts, Mr. Beckstead claims that he has indeed "become aware of information relating to possible illegal acts."
"We have received information relating to the possible improper use of corporate assets," Mr. Beckstead writes, leading off with $4-million paid to CMKXtreme for "promotion and advertising."
"Based on the information provided to us, it caused us to question whether the use of the funds truly advanced the best interest of CMKM," Mr. Beckstead advises. "Additionally, it appears that Mr. Casavant owns CMKXtreme, and that this may have been a related party transaction that may not have been presented to or approved by the Board of Directors of CMKM.
"We fully understand marketing issues raised by Mr. Stoecklein in his letter, but we are unaware of how any such transactions benefited CMKM."
Mr. Beckstead goes on to claim that he has received information that CMKM may have violated securities regulations with respect to loans to its officers and directors.
"Our information indicates that Mr. Casavant and others related to CMKM may have advanced themselves undetermined amounts of money without adequate explanation or documentation," the auditor writes.
Mr. Beckstead also offers some thoughts on the state of CMKM's books.
"The CMKM books and records are, at this point, unauditable because they are incomplete, and the records that exist have been improperly maintained," Mr. Beckstead says. "The volume of transactions via wire transfer and cashiers checks render the banking records inadequate for obtaining competent evidential matter necessary to render an audit opinion."
The auditor notes that Mr. Stoecklein admits that CMKM could only provide less than 25 per cent of the information requested by his firm at the outset.
"Mr. Stoecklein raises the disingenuous argument that if the records are unauditable, how can we be aware of any illegal acts," Mr. Beckstead writes. "First of all, having records that are not auditable is itself an illegal act under Section 13(a)(2) and other provisions of the 1934 Act.
"Secondly, the other information set forth herein was obtained from records that were available."
Mr. Beckstead goes on to point to a number of possibly inadequately disclosed related party transactions including, among others, transactions with U.S. Canadian Minerals and significant "monetary and stock transactions with individuals and entities who appear to be CMKM shareholders and/or prior officers and directors of the company."
"We have notified management, including the president and chief executive officer, of our concerns, and we met with CMKM's counsel as management's representative on July 20, 2005, to discuss these matters," Mr. Beckstead writes. "We received no information to alleviate our concerns, and in fact obtained further information that enhanced our concerns.
"In his letter, Mr. Stoecklein makes note of the fact that we were invited to a subsequent meeting at CMKM's offices and chose not to appear.
"That is correct, but we also asked CMKM to provide us a written response to our concerns.
"We believed that a written response was appropriate in the circumstances and would have been significantly more valuable than an oral response at a meeting.
"We believe that Mr. Stoecklein's letter constitutes a written response, and this letter is our response to Mr. Stoecklein's letter."
According to Mr. Beckstead, the concerns that he has identified may have a material adverse impact on CMKM's financial statements.
Among other things, the fired auditor claims that the related party transactions and the apparent loans to officers and directors may or may not be recoverable assets.
Moreover, Mr. Beckstead says that the apparent violations of the securities laws may result in SEC enforcement action, which could result in significant expenditures to defend and may also result in fines, penalties and damages.
Further, the auditor claims that the violations may lead to "civil litigation or criminal enforcement, which may also result in fines, penalties and damages."
Coming to the end of his letter, Mr. Beckstead points out that his firm was fired on July 22 and, under securities regulations, that should have been reported in an 8-K filing within four business days or no later than July 28. CMKM did not file the report within the required time.
"Consequently, CMKM is delinquent in its reporting obligations and, therefore, appears to have committed further acts in violation of the 1934 Act," the auditor notes.
The aftermath
In the wake of the public dust-up with its fired auditor, Mr. Stoecklein advised the SEC that he was withdrawing the posthearing settlement proposal he had jointly submitted with Mr. Frizzell. CMKM's lawyer put the blame for the withdrawn proposal on the fired Mr. Beckstead.
"Since CMKM does not have an auditor and is not able to determine at this point when an audit could be completed, the proposal is no longer viable," Mr. Stoecklein wrote.
Mr. Frizzell offered some of his thoughts on the termination of Mr. Beckstead in an e-mail update to the members of the Owners Group.
"The company continues to spend valuable time and money attempting to engage an auditor that will actually produce auditable financials," the Texas lawyer remarked.
Mr. Frizzell, who is not a securities lawyer, is perhaps unaware that an independent auditor cannot produce the auditable financial statements that he or she has been hired to audit.
"It seems to me that once an auditor receives a $25,000 due diligence fee before accepting employment, and he then signs an engagement letter it would have to be some pretty unusual circumstances to assert that you cannot perform the audit," Mr. Frizzell went on, glossing over the fact that CMKM's books and records are still an unauditable mess.
"I share your pain, folks," said Mr. Frizzell, who is also a CMKM shareholder.
The saga continues.
-------------------- Invest with your brain not with your heart. Posts: 4405 | From: Bristol, Tn, USA | Registered: Aug 2004
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"Your actions have forced CMKM to expend significant additional time and resources into responding to these issues, thus diverting precious resources from its major goals of increasing stockholder value and regaining its reporting status."
ahaha yeah the transfer agent destroyed urbans two years of progress in getting compliant.. Seriously are these people circus carneys? they have no moral,integrity,decency.. they flat out lie,twist words and bullchit.
2 F'n years to get complaint and we found out NOTHING has been done yet. UC is a walking sack of crap.
Posts: 49 | Registered: Aug 2005
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glass...we need to get stock certs in place of burgers on that pic & then get upside to print t-shirts. maybe UC's face instead of hamburgular.
-------------------- "keep your stick on the ice & your cup firmly in place" Posts: 3651 | From: Algonac, MI. 48001 | Registered: Jun 2004
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He sure is a by the book type of person. He wasn't about to sign off on a audit without a 10A in place to cover his butt. More people need to start worring about covering there butt on what they have done for this company. If not they will have to worry about covering it in jail.
quote:Originally posted by Wallace#1: I DO like that auditor, Beckstead!
-------------------- Invest with your brain not with your heart. Posts: 4405 | From: Bristol, Tn, USA | Registered: Aug 2004
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"The company continues to spend valuable time and money attempting to engage an auditor that will actually produce auditable financials," the Texas lawyer remarked.
Mr. Frizzell, who is not a securities lawyer, is perhaps unaware that an independent auditor cannot produce the auditable financial statements that he or she has been hired to audit."
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this is the point the cult just doesn't get. reporting or not books by law must be kept...period. its not desormeau's fault. its UC's there is no paperwork explaining why 703 billion shares were printed or why so many ppl were given shares, billions of shares. no paperwork on why company officers or employees were given 10's of billions of shares. this isn't financial records this is general company records just like the claim documents or leases on equipment. not recording every penny is 1 thing but not keeping the contracts or documenting why they were given shares is a whole other ball game.
-------------------- "keep your stick on the ice & your cup firmly in place" Posts: 3651 | From: Algonac, MI. 48001 | Registered: Jun 2004
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That bit, among others, about keeping books is exactly what I was referring to when I previously mentioned "failure to perform fiduciary duties". It seems that that alone would be grounds for serious litigation.
Hope the pumpers pass that on to Frizzy.
Posts: 3607 | From: NJ - Outside Phila. | Registered: Mar 2004
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i'm still trying to find the nevada minerals web site to see what they say about the american shaft. nothing comes up on the company on a search. remember frizzy said their webs site says it aquired the american shaft.
-------------------- "keep your stick on the ice & your cup firmly in place" Posts: 3651 | From: Algonac, MI. 48001 | Registered: Jun 2004
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-------------------- "keep your stick on the ice & your cup firmly in place" Posts: 3651 | From: Algonac, MI. 48001 | Registered: Jun 2004
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ya...just found it through yahoo...nothing on it about cmkx at all. the site looks old in fact. doesn't look updates in at least a yr. wonder where frizzy got the idea they aquired the S.A. gold shaft.
-------------------- "keep your stick on the ice & your cup firmly in place" Posts: 3651 | From: Algonac, MI. 48001 | Registered: Jun 2004
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What amazes me is the fact that no one in the cults demands answers. They are content with knowing nothing. Maybe they want it that way so they can keep their dreams alive.
-------------------- Invest with your brain not with your heart. Posts: 4405 | From: Bristol, Tn, USA | Registered: Aug 2004
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-------------------- "keep your stick on the ice & your cup firmly in place" Posts: 3651 | From: Algonac, MI. 48001 | Registered: Jun 2004
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you would think after the master list came out they would be on frizzy to stop everything at cmkx & go in for an open book look just like he was telling UC he was about to do. its sort of like buying a lotto ticket but not checking the numbers, as long as you dont look its possible its a winning ticket.
-------------------- "keep your stick on the ice & your cup firmly in place" Posts: 3651 | From: Algonac, MI. 48001 | Registered: Jun 2004
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I really feel that CMKX is losing the mines in Ecuador. I think the announcement on their website was pre-mature. UC probably had an agreement to hold off until the revocation was complete were no one would notice and he could slip into the night. Because without being able to sell shares anymore then there is no way he can pay the 2 million. Maybe UC is delusional and thinks that he can win this and continue selling shares for a living.
-------------------- Invest with your brain not with your heart. Posts: 4405 | From: Bristol, Tn, USA | Registered: Aug 2004
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Better yet, since UC thought CMKX was his personal piggy bank anyway why not make a deal with Nevada Minerals. That if they just wait a couple months that he would let the 2 million go by thus letting Nevada have the mines. In exchange UC gets lets say 10% of profits in his name. That way he continue to make money off this scam forever.
-------------------- Invest with your brain not with your heart. Posts: 4405 | From: Bristol, Tn, USA | Registered: Aug 2004
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i'll bet he finds a way to get something out of it. being private it can be done without ever telling anyone once cmkx is revoked. remember when UCAD gave cmkx 7.5 million shares & that was about 49% of UCAD...then the 3 for 1 split went thru (never saw my divys triple) now nevada minerals gets 14.2 million shares added to the 5 million they had...19.2 total. if USCA did triple their shares nevada owns almost 50%. i'm guessing both cmkx & USCA's assets end up in nevada minerals over the next yr or so. all private, no SEC & nothing anyone can do about it.
-------------------- "keep your stick on the ice & your cup firmly in place" Posts: 3651 | From: Algonac, MI. 48001 | Registered: Jun 2004
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Wasn't it rumored that some claims were transfered to UCAD too. Three rich men living in Ecuador hidden from 60K shareholders. Maybe they can stake out the casinos. UC can't stay away long.
-------------------- Invest with your brain not with your heart. Posts: 4405 | From: Bristol, Tn, USA | Registered: Aug 2004
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i just started watching WDAM...haven't dug to deep yet but last reported o/s was 11 million, that was june. deal for 12 million since then. they did a r/s in january. only read the title of the allstocks thread not much more...security stocks have been heading up, at least quality ones have....BSIO, MRKL.
-------------------- "keep your stick on the ice & your cup firmly in place" Posts: 3651 | From: Algonac, MI. 48001 | Registered: Jun 2004
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Posts: 1435 Registered: 22-10-2004 Member Is Online
posted on 6-8-2005 at 12:14 AM
CIM SEEMS TO BE THE PLAY.
CIM SEEMS TO BE THE PLAY. "A CIM HISTORY"
"CIM" the commonly used short form for Casavant International Mining, was born on January 21, 2003 with the filing of it's Articles of Incorporation with the Nevada Secy of State. Initially CIM had an Authorized Share count of 25 million shares at a par value of .001, but on 10/20/2004 the authorized share count was increased to 500 billion with a .001 par value, indicating that in about 10 months the "par value" of the company had been increased from 25,000 dollars to 500 million dollars. What happened in between? Starting back with it's inception, CIM was a unique move for the Casavant's, in that it was a NEW corporation. Not the normal "shell game" played for other Casavant entities, and looking very much like an attempt at starting something "clean", with no questionable history or questionable players. What did Urban have in mind for the company? And what did he do to increase the par value by $499,975,000.00? And what can all of this mean to the future of CMKX, and us as shareholders?
A little more history might help.
CIM was introduced to the public in a PR announcing a spin out of corporate zinc deposits from the George Lake claims held by CIM as subsidiary of CMK(M).
LAS VEGAS, Aug 21, 2003 /PRNewswire-FirstCall via COMTEX/ -- Urban Casavant, President of Casavant Mining Kimberlite International (OTC Pink Sheets: CMKM) is pleased to announce that the Board of Directors of Casavant Mining Kimberlite International (CMKM) have approved the spin-out of the corporate zinc deposits at George Lake, Saskatchewan, with the spin-out of its wholly owned subsidiary Casavant Mining International, Inc. (CMI). The target date for the spin-out will be before the end of September 2003, and will be announced shortly. CMKM shareholders of record at the time will receive one share in CMI for every share they hold and will continue to own in (CMKM). This spin-out will enable CMKM to concentrate on diamond exploration and development at Forte a la Corne, Saskatchewan.
Then a clarification:
LAS VEGAS, Aug 22, 2003 /PRNewswire-FirstCall via COMTEX/ -- Urban Casavant, President of Casavant Mining Kimberlite International would like to clarify that the payable date for the 2-1 forward stock split will be Monday September 29, 2003. This means that all shareholders who hold CMKM stock through close of market Friday September 12, 2003 will receive one additional CMKM share of stock for every share that they hold through September 12, 2003 the X dividend date, and be paid extra shares by September 29, 2003.
Casavant Mining Kimberlite International Board of directors have also approved the spin-out of the corporate zinc deposits at George Lake, Saskatchewan, its wholly owned subsidiary Casavant Mining International, Inc. (CMI). Shareholders of record who hold CMKM stock through close of market on Friday September 19, 2003 will receive one share of CMI stock for every share of CMKM stock that they hold through this date. The payable date for the CMI shares of stock will be Friday October 3, 2003. CMKM shareholders of record at the time will receive one share in CMI stock for every share they hold and will continue to own their CMKM stock. This spin-out will enable CMKM to concentrate on diamond exploration and development at Forte a la Corne, Saskatchewan.
If shareholders sell their CMKM stock before September 12, 2003 or September 19, 2003 they will forfeit their rights to receive dividends for CMKM stock split or CMI stock.
And then finally it looks like the deal will be made.
LAS VEGAS, Dec 19, 2003 /PRNewswire via COMTEX/ -- On December 19, 2003 Casavant Mining Kimberlite International (Pink Sheets: CMKM) Board of Directors announces that the feasibility of a spin out of corporate zinc deposits at George Lake,Saskatchewan, currently held in its wholly owned subsidiary Casavant International Mining, Inc. (CIM), is being undertaken with a representative of Mirador Corporation (Pink Sheets: MRDR). This is subject to due diligence which is currently being undertaken by representatives from each company: CMKM, CIM and MRDR as to the feasibility of this share exchange.
The spin-out, in principle, has been approved by CMKM as announced by CMKM on December 8, 2003. If a CIM/MRDR exchange is approved, CIM will become a wholly owned subsidiary of MRDR which will undergo a name-change, an increase in authorized share capital, and new Board of Directors. The shareholders of CIM would each receive a share in MRDR in exchange for their shares in CIM. The effective exchange date is anticipated to be January 15, 2004.
Should the CIM/MRDR exchange fail to pass due diligence then an alternative exchange will be undertaken with a different suitor to achieve the same result for the CIM shareholders. But here is where the "pea under the shell game" begins. You see, Mirador's Presdent was Vistor Casavant and I don't think there would have been much "due diligence" necessary. But it is apparent that UC was trying to get CIM out from under CMK(M) and held solely by his brother Vic. "CIM will become a wholly owned subsidiary of MRDR which will undergo a name-change". Why was Urban trying to get CIM out from under the control of CMKX? That's an important question, that takes us into the "Premerger Syndicate" players and the Forebearance Agreement that Phxgold borught to our attention recently. I won't rework that discovery, since Phxgold did such a good job. But in short, there may have been some "toxic financiers" involved in the syndicate who were working against the best interests of CMKX, possibly naked shorting it into bankruptcy so that they could take over the company and its valuable claims.
But CIM was to be a "clean" company, imo, divorced from the "bad guys". What bad guys? Well, one player was a guy named Shawn Hackman.
While not my favorite source of "news", Stockwatch did an apparently thorough job of investigating Mr. Hackman and his connections to CMKX through Ed Dhonau:
"In the same vein, there is nothing to indicate that Mr. Dhonau knew anything at all about the less than reputable activities and alleged activities of disbarred, SEC-suspended and subsequently indicted lawyer Shawn Hackman, who served as secretary and treasurer of four Nevada companies headed by Mr. Dhonau: Horizon Prime Inc.; Red Bluff Corp.; Silver Stream Corp.; and Western Sky Inc.
Mr. Hackman, who played a role in Canadian career fraudster Michael Mitton's H & R Enterprises debacle, was suspended by the Nevada Supreme Court in 2001 amid allegations that he misappropriated $700,000 from a client at a time when he was ostensibly co-operating with the state bar counsel regarding other client complaints of misappropriation. He was ordered disbarred on April 3, 2002, and subsequently suspended from practicing before the SEC.
In August of 2003, the U.S. Organized Crime Strike Force unsealed a 64-count, 100-page grand jury indictment against Mr. Hackman and fellow Nevada lawyers Sean Flanagan and Daniel Chapman, New York lawyer Herbert Jacobi and Utah transfer agent James Farrell. The indictment included 50 counts of conspiracy, wire and mail fraud, money laundering, conspiracy to defraud the Internal Revenue Service, interstate transportation of stolen securities and false statements, and 14 counts of forfeiture.
According to the allegations, Mr. Hackman and his co-defendants facilitated the manufacture of fraudulent shell companies in which the promoters gained hidden control of all or virtually all of the public float through the concealed use of nominee officers, directors and shareholders.
In February of this year, Mr. Hackman entered into a plea agreement, pleading guilty to one count of conspiracy racketeering and agreeing to a criminal forfeiture of property obtained through racketeering. In his plea agreement, Mr. Hackman admitted that, from at least July of 1995 to November of 2001, he and his co-defendants and others known and unknown were members of a criminal organization engaged is securities fraud, money laundering, wire fraud and other illegal activities.
Mr. Hackman also admitted that, among other things, the scheme involved fabrication of corporate records and stock records; mergers of shell corporations with private companies; formation of companies in the Bahamas to cover up the fraud; and retaining lawyers to issue false legal opinions indicating that the shares of the shell corporations were freely tradeable.
The other four defendants have entered pleas of not guilty and the case has not yet gone to trial.
Again, it should be noted that there is nothing to suggest that Mr. Dhonau had any clue at all about the criminal activities of Mr. Hackman. It should also be noted that according to many shareholders of U.S. Canadian Minerals, the largest shareholder Mr. Dhonau is an intelligent, enthusiastic, well-connected and respected prince of a fellow who will figure prominently in both the company's future and in the future of CMKM."
Shawn Hackman is linked into Mirador / SGGM through a very important address: 1350 E Flamingo Rd #688 Las Vegas Nevada.
When SGGM came back on the market, I checked them out and their address, while sitting as a "shell", was 1350 E Flamingo Rd #688. . (Source Nevada Secy of State) What made that very interesting, was that it was the exact same address as VWAY International 1350 Flamingo # 688 (Nev SOS), the successor to Mirador on July 1, 2004.
ROYSTON MANNOR ESTATES, INC. Revoked Dec. 04 "The primary activity of Royston Mannor Estates, Inc. is to locate and consummate a merger or acquisition with a private entity." "Royston Mannor Estates, Inc. can be defined as a "shell" company., whose sole purpose at this time is to locate and consummate a merger or acquisition with a private entity. The proposed business activities described herein classify Royston Mannor Estates, Inc. as a "blank check" company. " ACCOUNTANT DAVID E COFFEY.
Now with a little background, let's get back to CIM. We finally get on with the "spin out" approval to MRDR.
LAS VEGAS, Jan 15, 2004 /PRNewswire-FirstCall via Comtex/ -- Casavant Mining Kimberlite International, Las Vegas, (Pink Sheets: CMKM) is pleased to announce that:
The Board of Directors of CMKM announced today that the CIM/ MRDR exchange has been approved in principle by both companies. All CIM/MRDR shareholders of record of January 30, 2004 will be eligible for the share exchange, more details will follow shortly.
The Board of Directors consider that the spin-out of Casavant International Mining will be in the best interest of the Company and its shareholders. CMKM and its officers and directors will be better able to focus on the Fort a la Corne, Saskatchewan claims it currently holds, while the new MRDR /CIM Company will be able to focus on the zinc claims.
So the exchange was approved, shareholders of record on Jan. 30, 2004 were to receive shares of the new MRDR/CIM. Remembering that Mirador was to be the dominant company, shareholders would have expected to receive either Mirador shares, or shares of the newly named company.
But something happened in the meantime. By June 4, Urban is cancelling the merger with Mirador, getting rid of the TA, and announcing the hiring of Roger Glenn the next day.
Had he finally had "enough" of the naked shorting? Enough of the shady financiers? Enough of the links to questionable people in his organization? His actions certainly look like he had found something in early June and was going to straighten it out.
6/3/2004 : Thursday June 3, 9:30 am ET
LAS VEGAS--(BUSINESS WIRE)--June 3, 2004--CMKM Diamonds, Inc. (Pink Sheets:CMKX - News), The Board of Directors announces that due to the encouraging results in Saskatchewan, the Company has decided to concentrate all its resources on diamond drilling at this time, and therefore has aborted the pending Mirador (MRDR) previously proposed project.
Further the Board has notified the present Transfer Agent, 1st Global Stock Transfer to do a full and complete audit of the company and/or will have an independent auditor audit the company and as soon as that audit is complete the Company has retained Pacific Stock Transfer, Inc., to become the new Transfer Agent for CMKM Diamonds, Inc.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements, other than the statements of historical facts, may be deemed to contain forward-looking statements with respect to events, the occurrence of which involves risks and uncertainties, including, without limitation, demand and competition for the Company's products and services, the availability to the Company of adequate financing to support its anticipated activities, the ability of the Company to generate cash flow from operations and the ability of the Company to manage its operations.
6/4/2004 : Friday June 4, 11:31 pm ET
LAS VEGAS--(BUSINESS WIRE)--June 4, 2004--CMKM Diamonds, Inc., (Pink Sheets:CMKX - News) president and chairman of the Board of Directors, Urban Casavant, announces that the Law Firm of Edwards & Angell has been retained to represent the Company in its desire to become fully reporting once again. Lead counsel for CMKM Diamonds, Inc., D. Roger Glenn, is a partner at the firm and has over 20 years of extensive experience in working with public companies.
Urban Casavant stated in Las Vegas today that, "hiring Edwards & Angell, LLP, and specifically Mr. Glenn, is the best thing that we could have done for the company and the shareholders. The fact that Mr. Glenn began his illustrious career with the Securities and Exchange Commission is a further feather in the company's hat. We would like to thank all of our shareholders for their patience as we have moved towards this moment and as we move forward from here as a team."
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements, other than the statements of historical facts, may be deemed to contain forward-looking statements with respect to events, the occurrence of which involves risks and uncertainties, including, without limitation, demand and competition for the Company's products and services, the availability to the Company of adequate financing to support its anticipated activities, the ability of the Company to generate cash flow from operations and the ability of the Company to manage its operations.
Something was obviously going on in the background that caused the planned transfer to Mirador to be aborted. What it was, I believe, will be the answer to a lot of the questions that we currently have. And the infusion of a million dollars capital, pointed to the possibility that CIM was finally going to become a "player" in the mining operations of CMKX. And possibly a "safe harbor" for claims away from the dirty business that was to follow turning the tables on the "bad guys".
On July 18, "Operation Dividend" goes into effect, with USCA, followed the next day with dividends of CIM.
7/19/2004 : LAS VEGAS--(BUSINESS WIRE)--July 19, 2004--CMKM Diamonds, Inc. (Pink Sheets:CMKX - News) has agreed to invest US$1,000,000 in Casavant International Mining referred to as (CIM). CMKM Diamonds,Inc. will receive in return a 10% lifetime royalty on all mineral claims of CIM , specifically including the George Lake Zinc Deposit, (http://www.ir.gov.sk.ca/dbsearch/MinDepositQuery/Default.asp?ID=0663) In addition to the zinc deposit royalty CMKM Diamonds, Inc. will also receive 40 billion shares of CIM stock which CMKM Diamonds, Inc. will distribute pro rata as a dividend to all CMKM shareholders of record on August 31, 2004.
Ron Casavant CEO, and Dave Desormeau Secretary/Treasurer, of Casavant International Mining (CIM) said, "The company plans to utilize these funds to initiate a drill program to re-evaluate the known reserves of the George Lake Zinc Deposit and to establish a course of action for the project. The company also plans to become a publicly-reporting company." More details will be released in future news releases.
After this, CIM goes "dead" on the PR Front. But a couple of interesting actions did take place recently. Casavant International Mining: Ater and extensive period of time in default, it is Reactivated June 29, 2005 with Ron Casavant still in the lead, but Dave Desormeau, the "no show" CMKX accountant, has been removed and replaced by Michael Williams. Are they getting it ready for something bigger?
Recently it was discovered by a poster at PB32, AlexMark, that Casavant International Mining Corp and Casavant International had been listed on the UIC Counterparties List:
"The UIC handles, principally and directly, functions of prevention and contrast of money-laundering, usury and financial intermediaries."
"In particular, the UIC performs functions connected with the reception and in-depth examination of reports of suspected operations communicated by financial intermediaries, by non-financial enterprises and, more recently, with Legislative Decree no. 56 of 2004, by regulated professions. Within this context, and based on a functional separation between financial analysis and investigative activities, the UIC has the task of elaborating on the reports, based on the financial information in its possession; the reports are then sent to the Anti-Mafia Investigation Bureau and to the Nucleo Speciale di Polizia Valutaria of the Guardia di Finanza (Special Financial Crime Unit of the Financial Police) for appropriate follow-up activities."
Cassa di Compensazione e Garanzia S.p.A. is a private company owned byBorsa Italiana S.p.A., which is responsible for managing the central counterparty system and guarantee funds for contracts and settlements.
European Investor Dictionary
Counterparty
The opposite party in a bilateral agreement, contract, or transaction. In the retail foreign exchange (or forex) context, the party to which a retail customer sends its funds; lawfully, the party must be one of those listed in Section 2(c)(2)(B)(ii)(I)-(VI) of the Commodity Exchange Act.
NOTE from the Countrparty Listing: VALIDITY DATE: 2004 Dec 01
That was pretty much the end of activity until last night's OG update from Bill Frizzell which read, in part:
"Rumors have been flying about CIM being registered in European markets. Mr. Stoecklein believes this must be another company with the same trading symbol. To his knowledge our CIM is not involved in the European markets."
Was Stoecklein confused? There is no talk of of a "trading symbol" it is clearly spelled out as "Casavant International Mining" and "Casavant International". Or is Casavant International / Mining being represented by a different attorney. Maybe one we had in December of 04?
"There is an appointed time for everything, and a time for every affair under the heavens" Ecc 3,1
Posts: 2375 | Registered: Nov 2004
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"CIM" the commonly used short form for Casavant International Mining, was born on January 21, 2003 with the filing of it's Articles of Incorporation with the Nevada Secy of State. Initially CIM had an Authorized Share count of 25 million shares at a par value of .001, but on 10/20/2004 the authorized share count was increased to 500 billion with a .001 par value, indicating that in about 10 months the "par value" of the company had been increased from 25,000 dollars to 500 million dollars. What happened in between?
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UC was getting ready for CMKX 2.... 500B shares...a lot of shares to sell...
Posts: 5120 | Registered: Jun 2004
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quote:Originally posted by Prdponce: "CIM" the commonly used short form for Casavant International Mining, was born on January 21, 2003 with the filing of it's Articles of Incorporation with the Nevada Secy of State. Initially CIM had an Authorized Share count of 25 million shares at a par value of .001, but on 10/20/2004 the authorized share count was increased to 500 billion with a .001 par value, indicating that in about 10 months the "par value" of the company had been increased from 25,000 dollars to 500 million dollars. What happened in between?
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UC was getting ready for CMKX 2.... 500B shares...a lot of shares to sell...
Read the paragraph very carefully, and you dont even have to read the rest. Nevada, again. Lax rules, and UC can stay close to the "action." 25 million to 500 BILLION. Assuring that it will never be worth over .0001 Issuing shares doesnt mean the company is worth more, it just means there are more shares to sell. And that isnt the limit. Since there are no rules governing the company, they could make it 500 quadrillion if they wanted to. Looks like UC made out so well with selling CMKX stock, he is ready to try it again. This time I hope he at least gets a house someplace nice instead of in the desert. Like maybe a little hovel in Florida. Or New York, close to Wall Street.
-------------------- If I give you bad information, please feel free to sue me. I have nothing left anyway. Ed Posts: 1772 | From: Oxford, PA, USA | Registered: Oct 2004
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"CIM" the commonly used short form for Casavant International Mining, was born on January 21, 2003 with the filing of it's Articles of Incorporation with the Nevada Secy of State. Initially CIM had an Authorized Share count of 25 million shares at a par value of .001, but on 10/20/2004 the authorized share count was increased to 500 billion with a .001 par value, indicating that in about 10 months the "par value" of the company had been increased from 25,000 dollars to 500 million dollars. What happened in between?
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what happened is par value was not changed. that number is not based on anything but the companies descretion. cmkx has 703 billion shares, cim a 500 billion o/s....says a lot about companies descretion.
-------------------- "keep your stick on the ice & your cup firmly in place" Posts: 3651 | From: Algonac, MI. 48001 | Registered: Jun 2004
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So, the question "Got CIM", should be answered with "What, you want to rip me off AGAIN"? LOL
-------------------- If I give you bad information, please feel free to sue me. I have nothing left anyway. Ed Posts: 1772 | From: Oxford, PA, USA | Registered: Oct 2004
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Well, I am back begging fer stars.. Picked up a little battle damage today!
I see the glassman is stirring the pot over here.
If I praise U/C think I might get a 5 star from a koolaide chugger?
shakeman, whoops I mean Wallace..
Watcha think about the IPO of HOKU, think it might of got lost in all the hullabalu over BIDU?
Posts: 10729 | From: oregon | Registered: Feb 2005
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