Former CEO of CMKM Diamonds Urban Casavant ordered to pay $65.6M in connection with fraud
By Lori Coolican, Saskatchewan News Network
September 15, 2009 11:42 AM
The U.S. Securities and Exchange Commission has secured a $62-million US civil court judgment against a Saskatchewan man in connection with an alleged penny stock fraud involving a diamond mining company that claimed to hold mineral rights near Prince Albert.
The U.S. Securities and Exchange Commission has secured a $62-million US civil court judgment against a Saskatchewan man in connection with an alleged penny stock fraud involving a diamond mining company that claimed to hold mineral rights near Prince Albert.
Urban Casavant, the 52-year-old former CEO of CMKM Diamonds, Inc., could not be located for comment Monday.
Sources have said the former Prince Albert prison guard continues to own a home in Saskatoon's posh Willows neighbourhood.
Several of his family members are being sued in the U.S. over allegations that millions of ill-gotten dollars flowed to them in Saskatoon and Prince Albert.
"It is not yet known how much money, if any, will be recovered in this case," the SEC told bilked investors in an alert posted to its website after the judgment was released Sept. 2 by the District Court of Nevada.
The decision finds Casavant liable for repayment of $31.5 million in profits, plus a civil penalty of $31.5 million. With interest, the total amount exceeds $65.6 million.
He and his co-accused partners do not face prison time as a result of the court decision. No criminal charges have been announced in connection with the case.
According to SEC investigators, Casavant and several American partners conspired to sell billions of shares of unregistered CMKM stock to some 40,000 investors around the world between 2003 and 2005.
The scheme involved Internet hype, phony media releases about the company's holdings and discoveries and marketing to middle-class American investors through a team of motorbike and car racers who toured events around the country with a company tent, where Casavant would make sales pitches.
The SEC and the Saskatchewan Financial Services Commission issued temporary cease-trade orders against the company in the fall of 2004 over questions of accuracy in its public statements.
Casavant resigned in 2007.
Court documents filed by the SEC alleged CMKM had no meaningful mining operations or records and was focused only on issuing and promoting stock while Casavant was enjoying a lavish lifestyle in Las Vegas.
According to the SEC's court filings in Nevada, Casavant controlled several Canadian companies that entered into a merger agreement with a public shell company owned by a British man who also lived in Las Vegas, John Edwards.
Edwards was ordered to repay $28.5 million US, plus a $26.4-million civil penalty, in a similar judgment issued June 23.
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