CMKM tout decries SEC administrative proceeding
2005-03-21 16:59 ET - Street Wire
by Lee M. Webb
CMKM Diamonds Inc. booster Hal Engel, a former securities violator better known as Internet tout Willy Wizard, suggests that the company's cult-like followers are not being well served by a U.S. Securities & Exchange Commission (SEC) administrative proceeding against the subpenny pink sheet promotion.
On March 16, just as a 10-day trading suspension was set to expire, the U.S. regulator announced its administrative proceeding against CMKM for failing to file required periodic reports. According to the SEC, CMKM has not filed an annual report since May 9, 2002, or quarterly reports since Nov. 18, 2002.
Some time within the next four months, an administrative law judge will decide whether an order should be issued suspending CMKM for up to one year or revoking the company's registration entirely.
As previously reported by Stockwatch, CMKM issued more than 100 news releases, many of them short on details and long on puffery, while ducking its reporting obligations.
During the same time, the pink sheet promotion headed by Saskatchewan native Urban Casavant issued hundreds of billions of shares without so much as a peep to shareholders. Indeed, CMKM gagged its transfer agent, ensuring that investors could not learn about the massive dilution.
With investors left in the dark, CMKM ran its record setting outstanding total up to more than 779 billion shares before repurchasing 75 billion shares from Nevada Minerals Inc. in a private transaction last December. The company still has a staggering 703.5 billion shares outstanding.
While operating in non-reporting obscurity, the pink sheet promotion managed to attract a remarkably large, gullible following and a motley assortment of Internet touts. Some of the touts are as misinformed as the most gullible of CMKM's starry-eyed followers.
Willy Wizard
Mr. Engel, a car salesman and stock tout who is still making instalment payments on an SEC fine levied in connection with previous touting activity, was one of the earliest CMKM Internet cheerleaders.
The stock tout has registered thousands of posts on stock message boards, profiled CMKM on his website, WillyWizard.com, issued scads of imaginative e-mails about the company and now holds forth almost daily about the pink sheet promotion on PalTalk, an Internet site that offers text and audio messaging in virtual rooms.
Mr. Engel began acquiring a position in CMKM last year based on outrageous rumours circulated by other touts including Jose Davila and U.S. air force officer Major Sterling Collins.
Alas, the wild tales of massive finds of diamonds, platinum, gold, silver and pretty much every other known mineral of any value bore no relation to reality.
Nonetheless, Mr. Engel claims that he increased his already sizeable holdings when CMKM hired the highly and imaginatively touted securities lawyer D. Roger Glenn of Edwards & Angell last June. CMKM bade farewell to Mr. Glenn in February.
By the time the dust had settled on Mr. Engel's buying, he was "all in," having sunk all of his cash into the subpenny pink sheet promotion. According to the stock tout, he had amassed approximately 980 million shares of CMKM at a cost of almost $200,000. (All amounts are in U.S. dollars.)
Mr. Engel's position briefly increased by a relatively insignificant three million shares last fall when he was one of many recipients of shares distributed by rumour-mongering tout Mr. Davila.
Perhaps sensitive to the appearance that gift might leave with regulators, Mr. Engel reports that he returned the certificates for three million shares of CMKM and three million shares of a related private company, Casavant International Mining Inc., to the transfer agent for cancellation.
Meanwhile, the stock tout, who claims credit for having brought thousands of investors to CMKM, has had to reduce his position a bit in order to meet some expenses including his SEC fine instalments. Mr. Engel reportedly now holds approximately 920 million shares of the pink sheet promotion.
With approximately $185,000 still tied up in CMKM, not to mention the "responsibility" he claims for his followers, Mr. Engel has not been overjoyed with recent developments.
Like many of the company's starry-eyed followers, however, the stock tout evidently thinks that the SEC is to blame for the current predicament, not CMKM.
Mr. Engel served up some of his thoughts on the matter in a March 18 news release.
Wizardly musings
"After a 10 day suspension by the SEC CMKM Diamonds resumed trading Thursday with a bang up volume of 8,368,848,699 shares exchanging hands," Mr. Engel led off in a clumsily revised news release incorporating some corrections to a release issued about three hours earlier.
"Buyers outweighed sellers all day but the share price remained unchanged," the stock tout declared.
Evidently Mr. Engel, who has been touting OTC Bulletin Board and pink sheet stocks for years, is a bit confused about CMKM's trading status.
Following the 10-day SEC suspension, CMKM was relegated to what is known as the "grey market" where quotes are not even published and brokers are effectively limited to executing matched trades.
Moreover, most of the more than 8.3 billion shares reportedly exchanged on March 17 went off at one-100th of a penny.
"For many months market makers have kept CMKX locked at .0001 by .0002 even with multi billion shares trading daily," the tout continued.
Again Mr. Engel seems confused. Even prior to the 10-day suspension, CMKM was only quoted unsolicited on the pink sheets, colloquially known as a "one-legged pink."
For stocks that are quoted unsolicited on the mighty pinks, a broker can only publish a quote solely on behalf of a customer and representing that customer's unsolicited expression of interest. In other words, market makers did not have the price locked at all.
"There seems like no escape for investors looking for a share price increase," Mr. Engel remarks, closing out the first paragraph of his March 18 news release.
"Now CMKM Diamonds faces another challenge by the S.E.C.," the tout continues, going on to sketch the administrative proceeding initiated by the U.S. regulator on March 16.
"Many shareholders are appalled that the SEC has waited until the company is finally attempting to bring back a fully reporting status," Mr. Engel goes on.
As previously reported by Stockwatch, CMKM has always had full reporting obligations. In other words, it is not a matter of bringing back "a fully reporting status," it is a matter of the company meeting its obligations under that reporting status, something that it has not done.
"The SEC states they are trying to protect investors but many shareholders dont (sic) see it that way," Mr. Engel states.
"CMKM Diamonds reported, via IR (investor relations) for USCA (closely related U.S. Canadian Minerals Inc., currently under investigation by the SEC) last summer, they had 41,000 plus shareholders and numbers are rumored to be upwards of 60,000 plus at this time," the tout continues.
"To threaten to revoke the registration of a company that is attempting to bring order back to their filings, many shareholders believe is not protection but a threat to investors (sic) investment," Mr. Engel reports.
Indeed, as noted on the SEC website, the primary mission of the U.S. regulator "is to protect investors and maintain the integrity of the securities markets."
That, of course, is a general mandate that does not necessarily entail protecting the specific interests of antsy shareholders of a massively diluted pink sheet promotion that has ducked its reporting obligations for more than two years to the possible detriment of other gullible members of the investing public and the integrity of the markets.
Mr. Engel devotes a paragraph to the recent addition of Robert Maheu to CMKM's board of directors and the company's most recent declaration of its go-forward plans.
"Does CMKM Diamonds look like a company that needs their shareholders protected?" Mr. Engel asks rhetorically.
Some help in formulating an answer to that question may well be found in Mr. Engel's subsequent comments pointing to the cult-like nature of the company's starry-eyed Internet following and the source of many of their wild fantasies.
"Shareholders are an organized group of believers partaking in many message boards and live chat rooms from Yahoo to Paltalk," Mr. Engel observes. "These rooms contain as small as 15 shareholders to as large as 600 plus shareholders.
"These shareholders are united and believe in their chairman Urban Casavants (sic) dream.
"They share the dream trusting their Chairman to make the right decisions entrusting millions of dollars to his dream."
Interestingly, as part of its mission to protect investors and maintain the integrity of the markets, the SEC cautions investors about Internet pump and dump schemes and, among other things, warns of the perils of relying upon information obtained from tout sheets and Internet chat sites.
Mr. Engel wrapped up his March 18 news release with a message and pledge of allegiance to Mr. Casavant, the company's only officer, and Mr. Maheu, CMKM's only other director.
"We stand behind you with trust and that our investment dollars are safe," Mr. Engel declares. "You both have our allegiance of trust. We wait patiently for your next move to accomplish building a successful company."
PalTalk palaver
Mr. Engel's mangled missive was the subject of some discussion on PalTalk on March 18, but it gave way to much more animated palaver later in the day and throughout the weekend.
Indeed, the company's excitable cult-like followers were in a tizzy over the latest fantasy advanced by Mr. Engel's foul-mouthed PalTalk sidekick, an optometrist from Missouri who uses the Internet alias "ooggie."
Most of the vulgar visionary's gobbledegook hardly bears repeating, but his latest fantasy, in a nutshell, is that CMKM has received a $500-billion settlement that will soon be distributed to its shareholders.
At the root of his latest nonsense is the widely held and completely unsubstantiated belief that CMKM has been the target of a massive shorting campaign in which the Depository Trust and Clearing Corp. has been a conspirator.
According to the vulgar tout's imaginings, the Depository Trust has cut a cheque to CMKM for as much as $500-billion to resolve the matter that would otherwise expose the corruption of the entire securities industry and bring the markets crashing down, wreaking havoc on the world's economy.
That, apparently, all makes sense to many of the company's cult-like followers. Indeed, with some variations, that nonsense was soon splattered over a number of Internet stock chat sites.
For some critical observers of the pink sheet play, that rubbish reinforced the answer they had already formulated to Mr. Engel's rhetorical question about whether CMKM's shareholders need protection. For some, the short answer is that many of the company's cult-like followers are far beyond any protection or help, for that matter, that a securities regulator can provide.
With more than 10.6 billion shares changing hands, almost all of them at one tick above zero, CMKM closed at one-100th of a penny on March 21.
The saga continues.
Comments regarding this article may be sent to lwebb@stockwatch.com.
(More information regarding CMKM Diamonds and associated companies can be found in Stockwatch articles dated Oct. 21, 2003; June 22; Sept. 16 and 24; Oct. 1, 15 and 20, 2004; and Feb. 11, 14, 18, 22 and 23; and March 1, 3, 4, 7, 14, 15 and 16, 2005.)
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Reader Comments - Comments are open and unmoderated, although libelous remarks may be deleted. Opinions expressed do not necessarily reflect the views of Stockwatch.
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LEE PLEASE TELL US THE HISTORY OF HARTLEY BERNSTIEN'S(YOUR EIDTOR) SEC VIOLATIONS. HE WAS FINED AROUND 850,000,000.00 WASN'T HE? PLWASE CORRECT ME IF I'M WRONG. AND WHILE YOU ARE AT IT CAN YOU ALSO GIVE US THE FULL STORY SURROUNDING STOCKWATCH IN CANADA AND THE 150,000.00 FINE YOU GUYS PAID FOR WRITNG CRAP...CAN'T WAIT TO READ ALL ABOUT THOSE TWO ITEMS
THANKS
Posted by LEE'S AN IDIOT @ 2005-03-21 17:34
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I'm out of this pos today after watching nothing but selling all morning, and wondering if UC and friends were unloading whatever they had left laying around. I seen and heard enough of the paltalkers and their BS theories, especially from willy and ooggie, talking anywhere from $.50 to $4.50 per share buyout. This is the same crap PCBM went through with those shares ending up totally worthless. My cult friends can go down with the ship if they want. I'm gone.
Posted by I_SOLD_TODAY @ 2005-03-21 17:43
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I ENCOURAGE ALL SHAREHOLDERS TO CONSTANTLY SPAM THIS THREAD TILL IT GETS TURNED OFF, OR LEE FALLS ASLEEP:))
Posted by punchy poluka @ 2005-03-21 17:45
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Well, from the first few reply's Lee, you're right. There's no hope of the SEC ever protecting those losers. I wish I could meet them all, as I have a bridge for sale, and could make a killing with investors like that! Those childish, misinformed, maladjusted investors (and I use that term 'investors' loosely!) get what they deserve, acting and posting like they do here on Stockwatch.
Too bad it may turn a couple potential real investors away from the market, but I guess that is their loss, for relying on internet chat and company only bulletins for due diligence.
Good to see you have broad shoulders there Lee! Say Hi to WillP from all the sane investors that just visit these CMKX Streetwires for the zoo-like entertainment from the peanut gallery!
Good Day to you sir.
Posted by InvestorIntelligence @ 2005-03-21 17:48
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NICE ONE
Posted by HI @ 2005-03-21 17:58
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WELL THANKS FOR THE GREAT JOURNALISM
Posted by JA @ 2005-03-21 18:00
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Another good one, lee. I have an FOIA request into the SEC to see if Willy Lizzard is even paying his installments.
I rather suspect he isn't.
Posted by Thomas "Lefty" Malone @ 2005-03-21 18:00
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JA says great journalism, is this your brother, haha, you guys wouldn't know great journalism if it bit you in the ass!
Posted by yo moma @ 2005-03-21 18:06
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HEY YO MAMA I WAS BEING CYNICAL YOU TOO STUPID TO FIGURE IT OUT READ THE ARTICLE AGAIN DICKHEAD
Posted by JA MEANS JACKASS @ 2005-03-21 18:12
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I bought some more today at .0001. This brings my total to over 1 trillion shares. I should complain to the SEC but they did nothing for GLKCE. I would rather trust UC than the crooked people @ SEC, DTCC, or Stock Watch. Lee I can ask any price for my shares and if they don't want to go to jail they will pay me what I want for them. Jump on in boys the waters fine!
Posted by I BOUGHT TODAY @ 2005-03-21 18:19
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check this out Lee, our attorney's respond. lasvegassun.com
Posted by punchy poluka @ 2005-03-21 18:24
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For those who don't know or understand me, I went to the Jim Jones School of Koolade. I hope that helps.
Posted by ooggie @ 2005-03-21 18:31
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Note to all CMKX longs: I can get you $1.00/share! Just send me $.05 for every share you have, to cover registration costs for the special SEC insurance. Upon receiving the funds, I will send you a cheque for the full amount! Please contact me @ my email ASAP and I will give you a safe address in Nigeria to send the money to.
Posted by I.P. Funnee @ 2005-03-21 18:46
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Another good article...Please keep the pressure on until this massive fraud is obliterated.
Posted by i_bash_trash @ 2005-03-21 18:48
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"Lee Webb, you have earned a place in history imo as, bar none, the single worst "journalist" I have ever read."
Posted by dubsy3 @ 2005-03-21 19:08
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Touché Lee, touché!!
"Most of the vulgar visionary's gobbledegook hardly bears repeating, but his..."
Posted by Short4ever @ 2005-03-21 19:09
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nice job Lee
Posted by Lee who @ 2005-03-21 19:50
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NOT
Posted by Lee who @ 2005-03-21 19:50
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Lee Webb is writing the book of moron for all you morons that believe in the crap he spews!
Posted by Yo mama @ 2005-03-21 19:53
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The volume was 42 billion not 10.6 loser.
Posted by Chris @ 2005-03-21 21:42
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you crack me up again Lee. How long you been on drugs? You write real well for a paid basher. I commend you. By the way, Willy Wizard aka Hal Engel sells Studebakers, not shares of any stock I know of. In any case, Lee, load up and sit back and lie. Cover your bases, as if what you write is what you really believe, you will have missed the boat. Just buy a lil in case you are indeed as dumb as I and others read you. Enjoy. Jake
Posted by jake barrett @ 2005-03-21 21:53
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Take the Koolaid, CMKX pumpers it quicker and better in the end.
Posted by Lee may be right @ 2005-03-21 22:19
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PEOPLES PEOPLES!!!!! HARK LET THINE EARS HEAR,,,,,,,,oogiee's 'FINAL' speech entitled "ARISE YE SHAREHOLDERS AND BE COUNTED" tuesday @ 9:00 CST
Posted by you mama @ 2005-03-21 22:25
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Lee just raised oogie to the level of superstar! lol
Posted by J @ 2005-03-21 22:30
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Lee when are you and Janice going to put out another article, I am tired of laughing at the last one!
Posted by yo moma @ 2005-03-21 22:34
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Too much Lee. I uesd to get upset with you. Now I just find you comical. Let's see who laughs last.
Regarding securities fraud, you’re intimately familiar with it. Man you have a lot of time on your hands.
Posted by stonecrusher @ 2005-03-21 22:49
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I think Lee may post from a jail cell, and that is how he got a woman like Janice, she feels sorry for all losers and can't get a real man! Is that rumor true Lee? about the above, cause that's what I am hearing? I wonder if cmkx makes it rich will Lee be fired from here? No doubt stockwatch will lose a huge amount of followers!
Posted by yo mama @ 2005-03-21 22:54
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I really hope the above rumors are not true! It would stink to have to sit in jail
Posted by yo mama @ 2005-03-21 22:55
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HAHAHAHAHAHAHA LOL !!!! Your description of oogiee is hilarious!
Posted by Lee Webb is funny! @ 2005-03-21 22:56
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I enjoy reading your articles as it reminds me of the sensless bashing of CMKX I have experienced on the unmonitored bullitin boards. So much so that I wonder if you are not one and the same with some posters I have listened to on occasion. I believe you to either be a very poor journalist or paid for your services by those that seek to destroy CMKX. In my opinion you are supposed to be protecting the public as much so(if not more) then the SEC. Is that not the job and resposibility of your profession. Unfotunately your one sidedness and total lack of research would make anyone who has done any research on CMKX know that you are not someone whos opinion should be listened to or affect my purchasing or selling of the stock. More importantly I believe you are leaving yourself and others open to a possible lawsuits(I have noticed you have had many) for your intentionally misleading false onesided statements. I think any jury would not have a hard time coming to the correct decision. I have been keeping records of everything you have said and when this is done I am sure that the many that you have played your mind games with may come back to haunt you in the future to your financial dismay. As for me and many others you are very transparant and totally ignored. You will have to work harder in the future.
best, mike p.s. KEEP IT UP - I LOOK FORWARD TO HEARING FROM YOU.
Posted by mike t. travelers @ 2005-03-21 23:17
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This is good journalism: lasvegassun.com
Stating facts and not opinions. The fact that Lee Webb has a stong opinion with his facts makes him no different then Willy Wizard that brings up facts and opinions.
Willy is a tout with a cult like following. Lee is a basher with a small following likely from Raging Bull paid bashers.
Lee there are 2 sides to a story and your facts are fine. I can't argue with them but you twist it to how you like it. Perhaps Willy does the same by twisting facts but do 2 rights equal 1 wrong ?
I cannot believe your boss allows you to publish opinions that are not backed up by facts. Perhaps your boss is being paid off by someone wanting to build the largest diamond mine the world will have ever seen. Check out Kensington's website Lee. Largest Kimberlite field ever discovered.
Now deal with that fact and see how much you can twist it.
Posted by Wayne Pedersen @ 2005-03-22 00:02
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Bashers only bash a BAD stock! You don't see any IBM or Microsoft bashers.
Then again these stocks don't trade for .000000000000001 LOL
Posted by goLEEgo @ 2005-03-22 00:24
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I gotta tell you Lee after reading your work over the past several months on CMKX I've decided I am in favor of abortion in cases of incest! Keep up the banging work!
Posted by Jack Meeoff @ 2005-03-22 00:31
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wow lee, another article on shareholders. I'm impressed. Keep up the chat room research! You're doing a bang up job!
P.S. Still would like to know if you are still on federal probation.
Posted by nicraage @ 2005-03-22 00:35
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Don't get insulted but is your job devoted to spreading ignorance?
Posted by Jack Meeoff @ 2005-03-22 00:44
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CMKX Pennystock news Click HERE Pennystock news
Posted by Max Payne @ 2005-03-22 01:47
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OK Lee, it's now official, you've won!
Congrats dude, you are now an even bigger FU CKSTICK than Senator Ted Kennedy.
And I didn't think you could sink any lower. You continually outdo yourself, each article getting off topic than the last (CMKX is the topic, not Willy, oogie, or anyone else). What a friggin moron you are.
Posted by Paid Pooper @ 2005-03-22 02:16
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ha
Posted by ha @ 2005-03-22 02:40
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s__________T
Posted by ha @ 2005-03-22 02:41
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God I'm such a dork! Sorry Mom.
Posted by lee_webb @ 2005-03-22 05:07
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Lee, has it ever occured to you to make your point a little quicker? Do you get paid by the word or something? I mean really dude, get in-make your point-get out. This is just droning on and on now.
Posted by Chris @ 2005-03-22 05:16
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Can someone tell me where to send my resume to become a paid basher of this stock? I know much more than the regular paid bashers and would like some kind of monetary compensation for wasting my time here. Although I suppose the pure entertainment value of waiting for the culprits to do the perp walk is worth something.
I LIKE DRIVE FUNNY CAR!
OREO OREO OREO!!!
Posted by Johnny B Good @ 2005-03-22 07:39
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Do I get a prize? It seems the starry eyed touts are so scared of the truth, and anyone writing about it, they have resorted to impersonating me and Lee. I guess thats quite the compliment. Why would a person write something and then but my name to it? I guess its the ultimate compliment.
P.S. - an interesting angle to the story, kind of like a sidebar.
Posted by dubsy3 @ 2005-03-22 08:17
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yeah why would anyone want to impersonate you, must have been a mistake, and don't flatter yourself. Sounds like you are another cousin of Lee's. And Lee nice job saying sorry to yo mama! Poor woman!
Posted by yo mama @ 2005-03-22 08:50
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