Just for grins.............
Las Vegas woman charged in securities fraud scheme
Arrest warrant issued for business partner
By CARRI GEER THEVENOT
REVIEW-JOURNAL
A Las Vegas woman was arraigned Thursday in federal court after her arrest in connection with a securities fraud scheme.
Diana Flaherty, 55, was arrested Wednesday at her Las Vegas home and remains in custody pending a detention hearing.
According to a statement from the U.S. attorney's office in Las Vegas, Flaherty and her business partner persuaded people to invest in a corporation by claiming it owned a proprietary process that could extract gold and other precious metals from volcanic cinder ore.
Flaherty and her partner, Michael Gardiner, 45, of San Diego, were indicted Tuesday in Las Vegas. The indictment was unsealed Thursday.
An arrest warrant for Gardiner, a former Las Vegas resident, is outstanding. He and Flaherty each face one count of conspiracy to commit securities fraud and one count of securities fraud, both felonies.
According to the indictment, Flaherty and her husband, Robert, had managed Phoenix Metals U.S.A. II, a Nevada corporation, since June 1993. Gardiner was a company shareholder.
In 1996, the Flahertys acquired a mill site claim and refining equipment on public lands near Searchlight. They referred to the site as the Black Mountain Refinery.
According to the indictment, the Flahertys and Gardiner devised a scheme to make themselves rich by fraudulently promoting and selling stock in Phoenix Metals, which was publicly traded on the Over-The-Counter Bulletin Board under the symbol PMTU.
The defendants claimed Phoenix Metals had more gold reserves than any U.S. gold producer, and that it had acquired control of at least 17 volcanic cinder cones, three of which were estimated to hold recoverable gold reserves worth $25 billion.
In September 1997, according to the statement from the U.S. attorney's office, the Securities and Exchange Commission brought a lawsuit against Robert Flaherty and Phoenix Metals alleging essentially the same fraudulent conduct as the indictment.
A judgment was entered against Robert Flaherty and the company in January 1998, permanently restraining them from making false statements and engaging in fraudulent business practices regarding the sale of securities.
However, authorities allege, the Flahertys continued to promote and sell the stock of Phoenix Metals.
According to the indictment, Phoenix Metals never commercially produced or economically extracted gold or other precious metals at the Searchlight refinery, and never produced gold from volcanic cinders. |
