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Gold/Mining/Energy : Desert Dirts, Gold & Platinum, the emperors new clothes -- Ignore unavailable to you. Want to Upgrade?

To: Tim Hall who wrote (1912)	2/14/2007 9:55:14 AM
From: Tim Hall	Respond to of 1913

WOMAN GETS 90 MONTHS IN PRISON FOR SECURITIES FRAUD SCHEME LAS VEGAS - - A Las Vegas woman who induced people to invest in a company that she claimed could extract gold, platinum, and other precious metals from volcanic cinders, was sentenced today by U.S. District Judge Robert C. Jones to 90 months in federal prison, announced Daniel G. Bogden, United States Attorney for the District of Nevada. Diana Flaherty, age 57, of Las Vegas, was also ordered to serve three years of supervised release, pay $5.7 million in restitution, and forfeit $5.7 million. She was convicted by a jury on May 4, 2006, of one count of Conspiracy to Commit Securities Fraud, Mail Fraud and Wire Fraud, one count of Securities Fraud and one count of Conspiracy to Commit Money Laundering. Evidence presented at her trial showed that no later than January 1993, Diana Flaherty conspired with her late husband, Robert F. Flaherty, to promote and sell securities issued by Robert F. & Diana Lee Flaherty, Inc., and Phoenix Metals U.S.A. II, Inc., Nevada corporations controlled and managed by the Flahertys. During the period from 1993 to 1994, the Flahertys promoted and sold “Ore Purchase Agreements” issued by Flaherty, Inc. The Flahertys represented that they possessed proprietary technology that enabled them to profitably extract gold, platinum, and other precious metals from volcanic cinders, and claimed that they owned vast reserves of such cinders. The Flahertys promised to process the purported “ore” purchased by investors—typically at a rate of $1,000 per ton—and guaranteed a 300% return. In 1993, Robert and Diana Flaherty acquired control of a publicly traded corporation they renamed Phoenix Metals U.S.A. II, Inc. The Flahertys purported to transfer proprietary technology and millions of dollars of cinders to Phoenix Metals. Over the years, they also inflated Phoenix Metals’ assets and value by purporting to assign over $2.6 billion of additional cinder “ore” to the corporation in exchange for millions of shares of stock. From 1993 through 2002, Robert and Diana Flaherty actively promoted Phoenix Metals and sold millions of shares of their stock by making and causing others to make untrue representations, such that volcanic cinders contain concentrations of precious metals; that the Flahertys and their corporations owned or controlled vast reserves of such cinders; that the Flahertys and their corporations possessed proprietary technology capable of extracting precious metals from cinders on a commercially viable basis; and that production of precious metals had begun or was imminent. In September 1997, the Securities and Exchange Commission (SEC) brought a civil suit against Robert F. Flaherty and Phoenix Metals alleging essentially the same fraudulent conduct as was charged in the Indictment. In January 1998, a Judgment was entered against Robert F. Flaherty and Phoenix Metals permanently enjoining them from making false statements and engaging in fraudulent business practices regarding the sale of securities. Despite the entry of this judgment, Robert F. Flaherty and Diana Lee Flaherty continued to promote and sell the stock of Phoenix Metals. Indeed, rather than abandoning their fraudulent scheme, during the pendency of the SEC investigation, the Flahertys acquired a refinery on a mill-site situated on public lands near Searchlight, Nevada.