CMKM Diamonds Inc. (fka CMKX)

[denver54]

By: gusjarvis
01 Feb 2010, 09:40 PM EST
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PART ONE:

No E85268

Kelowna Registry


IN THE SUPREME COURT OF BRITISH COLUMBIA


BETWEEN: CMKX SHAREHOLDERS COALITION FOR JUSTICE
Plaintiff

AND: THE US SECURITIES AND EXCHANGE COMMISSION
Defendant


AFFIDAFIT

I David Nelson, of #101 1865 Dilworth Drive Kelowna British Columbia, MAKE OATH AND SAY AS FOLLOWS:

1. I am the Plaintiff in this proceeding and as such have personal knowledge of the matters and facts hereinafter deposed to, save where stated to be on information and belief and where so stated I verily believe the same to be true.

2. In the CMKX SHAREHOLDERS COALITION FOR JUSTICE VS. THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION , Kelowna Registry No. S 85268, the CMKX Shareholders Coalition for Justice (The Coalition) entered evidence showing the United States Securities and Exchange Commission (SEC) did collude with the corrupt management of CMKM Diamonds Inc. (CMKX). A detailed paper showing collusion between CMKX management and the SEC was presented as evidence in the November 6th writ of summons and is presented here: http://www.cmkx.info/evidence.pdf.

3. CMKX represents the largest counterfeited stock in history (per attorney Al Hodges comment letter to the SEC file number S7-08-08). It was counterfeited by insiders of CMKX with the full blessing of the SEC along with many other firms. The SEC was fully aware of John Edwards, a corrupt insider of CMKX, who is currently indicted by the DOJ, laundering money (selling unregistered shares) through various accounts at NevWest Securities Corp. years before they took action. The evidence is in the phone records of NevWest Securities Corp., who contacted the SEC each time Edwards came in with a cert to sell through different accounts, which were based in Langley, British Columbia, Canada. Instead of stopping the fraud, the SEC told NevWest Securities Corp. to sell the stock, effectively aiding the fraud. Instead of taking action the SEC and NASD (FINRA) ignored the evidence and dozens of other red flags, allowing the scheme to continue unabated, costing CMKX shareholders hundreds of millions of dollars.


4. The SEC and a task force from the FBI/DOJ/IRS and others subpoenaed records that proved insiders of CMKX were laundering money through the Silver State Bank and selling counterfeit stock on September 5th 2004, after which they allowed the fraud to continue despite having this evidence and allowed hundreds of billions of unregistered shares to trade and cost CMKX shareholders hundreds of millions of dollars. At the same time the SEC was in contact with CMKX attorney, and former SEC attorney, Roger Glenn who it appeared facilitated this fraud. They were fully aware of the fraud, and through its negligent actions and inactions the SEC caused CMKX's scheme to continue, perpetuate, and expand, eventually resulting in millions of losses by investors.

5. Given the ease it was to prove the collusion of the SEC and corrupt CMKX management, and given the fact that a task force from the RCMP/FBI/DOJ/IRS/SEC had all the evidence they needed in 2004 to stop this fraud and allowed the fraud to flourish and be promoted, it was assumed this was a sting operation by many shareholders who documented the evidence over years. Mark Faulk, ex CEO of CMKM Diamonds Inc. said, “there are unconfirmed reports of a major sting operation targeting dozens of others involved in the CMKX scandal”. He later denied this fact due to signing non-disclosure agreements. The company itself due to strict non-disclosure agreements and the SEC along with other agencies involved would not confirm this fact, so the CMKX Shareholders Coalition for Justice put together a paper showing the collusion between the SEC and CMKX management, along with other evidence, and filed a case against the SEC on November 6th, 2009. Evidence presented in the Coalition’s writ, which will be added to this affidavit, clearly show the SEC has aided and abetted the systematic counterfeiting of the stock market for over a decade, and CMKX in particular. And although the SEC has participated in several sting operations with many different agencies with the appearance of fighting the counterfeiting of the stock market, the crime and its cover-up continue to this day. Although the SEC has identified hundreds of victim companies and know exactly who the perpetrators are on Wall Street, evidence will show the SEC has gone after the victims and shielded the perpetrators from almost any criminal prosecutions, despite the fact that the crime has cost retail investors multiple trillions of dollars.

6. The fact that CMKX was a sting operation has now been confirmed subsequent to the filing the Coalition’s writ of summons on November, 6th 2009, which is pertinent to our case as it explains the collusion that was proved in our case was for a purpose. In case number CV10-00031-JVS (MLGX), A. Clifton Hodges, State bar No. 046803, filed a complaint in the United States District Court Central District of California against the SEC for 3.87 trillion dollars on January 10th 2010. The case confirms CMKX was used as a vehicle in a sting operation, and statements made in the case are now confirmed by talks taking place to release the money from the frozen trust accounts between Al Hodges and the SEC and other Government entities. In preparation for my filing I have had discussion with Al Hodges and he has confirmed directly to me that these trusts are there and the funds have been collected. His lawsuit is only to force the release of the already collected funds. These trust accounts hold monies from perpetrators who made deals to stay out of jail for their crimes and from proceeds from land sales. Several plaintiffs who hired Al Hodges in this case have confirmed on public forums that talks and actions are ongoing to release these monies, but the U.S. Government has repeatedly lied about the release of those funds, including sending codes to release the money that did not work, and that money was missing out of the trust fund when access codes worked. Hodges and Associates confirmed that these comments were from plaintiffs in this case. Al has confirmed in his suit that the SEC has lied to CMKX shareholders representatives for years about imminent release of the shareholders trust accounts. Many shareholders have died while waiting for their Government to release their property that was illegally being held from them. This information proves that the evidence presented in Al Hodges case is corroborated given they are in the process of getting the funds released by the United States government that were collected in the sting operation. The continued lies by the United States government and stalling of release of these funds forced Al Hodges to finally file a 3.87 trillion dollar Bivens based class action law suit against members of the SEC and FBI. To this moment the United States Government is saying the release of funds is imminent but thousands of shareholders sit watching daily as they are lied to again and again. The fact that the SEC has lied to lawyers representing CMKX shareholders follows their modus operandi in many other well known cases which will be presented as evidence. Evidence gathered for this case show complete collusion of the SEC with the perpetrators in the theft of trillions of dollars from retail investors by systematically counterfeiting all kinds of financial instruments including stocks and treasuries. Comments made by Bud Burrell (file No. S7-19-07 to the SEC), consultant for John O’Quinn who has a multi trillion dollar class action going against the same perpetrators, says that failure to delivers (counterfeit stock) is now over thirteen and a half billion dollars a day, and that there is more naked short shares in the market than there is outstanding shares. Facts will be presented that show the United States Government and Canadian Government worked together to fight this pandemic fraud, but that the SEC in fact aided the fraud by their actions and inactions, and that they are a totally captured regulator by the industry they are suppose to regulate.

7. To focus on the CMKX situation first before focusing on the overall fraud, one has to look at the evidence presented by Al Hodges. Before actually filing his lawsuit Al Hodges gave the SEC the chance to release the funds collected for the shareholders, and in a litigation update to his plaintiffs on December 16th Al Hodges included this statement: “During the period from March, 2004 through August, 2006, on behalf of CMKM Diamonds, Inc. Robert A. Maheu, with assistance from Royal Canadian Mounted Police…, negotiated a settlement with the illegitimate brokers, dealers, market makers, hedge funds, and other persons and entities that had engaged in naked short selling of CMKM Diamonds Inc. stock and cellar boxing the company. In exchange for a U.S. Government promise of no prosecution for such sales, the wrongdoers each promised to pay negotiated amounts to a frozen trust for disbursal at a later time.”

8. Paragraphs 8 through 17 contain excerpts from case CV10-00031-JVS (MLGX) which are relevant to The Coalition’s case, quotes that are again corroborated by the fact the SEC and or United States Government officials to this day are promising imminent release of these funds. Al Hodges case confirms what Al stated in his comment letter to the SEC, that CMKX was the largest naked shorted stock in history, “During the period of June 1, 2004 through October 28, 2005 a total of 2.25 Trillion “phantom” shares of CMKM Diamonds Inc, was sold into the public market through legitimate brokers, illegitimate brokers and dealers, market makers, hedge funds, ex-clearing transactions and private transactions. The sales of the majority of such shares were at all times known to the Securities and Exchange Commission, including Defendants herein.”

9. “At some date prior to June 1, 2004 the Securities and Exchange Commission in concert with the Department of Justice of the United States, together combined with Robert A. Maheu and others to utilize CMKM Diamonds, Inc. for the purpose of trapping a number of widely disbursed entities and persons who were believed to be engaged in naked short selling of CMKM Diamonds Inc. stock and cellar boxing the company.”

10. “The Securities and Exchange Commission and the Department of Justice, with assistance from the Department of Homeland Security, believed and developed evidence that said short sellers were utilizing their activities to illegally launder moneys, wrongfully export moneys, avoid payment of taxes, and to support foreign terrorist operations. To fulfill the plan to criminally trap such wrongdoers, the Securities and Exchange Commission, with assistance from the Departments of Justice and Homeland Security:

(a) Assisted in and approved the retention of Roger Glenn, an ex-SEC trial attorney and drafter of Sarbanes-Oxley, to join CMKM Diamonds Inc. for the purpose of verifying claims value, increasing authorized shares of stock to 800,000,000,000, and supervising from the inside of the company;

(b) Encouraged the company to expand its promotional activities, assisted in the set up of the “racing activities” of the company, and underwrote a substantial portion of the cost of such activities;

(c) Consented to, facilitated, and supported the sale of certain company claims to several foreign corporations;

(d) Consented to, facilitated, and supported the conferences between Robert A. Maheu and his associates on the one hand, and the wrongdoing short sellers on the other, all for the purpose of settling the potential liability of said wrongdoers with consent of the U. S. Government and a representation of no criminal prosecution for such illegal sales;

(e) Consented to, facilitated, and supported the declaration of dividends payable by the company to each common shareholder of CMKM Diamonds, Inc.

(f) Consented to, facilitated, and supported the distribution of shares of CIM, a private company owned by Urban Casavant, as a stock dividend, including consent and approval of distribution of said shares to holders of more than 1.4 Trillion shares of CMKM Diamonds, Inc. common stock.”

11. “During the period from November, 2004 through April, 2005, CMKM Diamonds, Inc. negotiated the sale of some of its Saskatchewan, Canada, mineral claims to three Chinese domiciled corporations with the advice and consent, inter alia, of the Securities and Exchange Commission. Proceeds from the consummation of such sales were placed into a frozen trust for disbursal at a later time.”

12. “During the period from March, 2004 through August, 2006, on behalf of CMKM Diamonds, Inc. Robert A. Maheu, with assistance from others, negotiated a settlement with the illegitimate brokers, dealers, market makers, hedge funds, and other persons and entities that had engaged in naked short selling of CMKM Diamonds Inc. stock and cellar boxing the company. In exchange for a U. S. Government promise of no prosecution for such sales, the wrongdoers each promised to pay negotiated amounts to a frozen trust for disbursal at a later time.”

13. “Plaintiffs herein are informed and believe, and based thereon allege, that other moneys have been collected for the benefit of the shareholders of CMKM Diamonds, Inc. from the Depository Trust & Clearing Corporation, from the United States Government, and from the sale of additional assets including consent to enter into joint venture agreements with other companies holding mineral claims in Saskatchewan, Canada. Plaintiffs herein are further informed and believe, and based thereon allege, that said moneys, collected for the benefit of shareholders have also been placed in a trust or are otherwise now held in trust by the Depository Trust & Clearing Corporation and the United States Treasury.”

14. “Plaintiffs herein are informed and believe, and based thereon allege, that at all times mentioned, the Securities and Exchange Commission reserved unto itself the sole and absolute discretion to determine when moneys collected pursuant to the scheme set forth above would and could be released for distribution.”

15. “Demand for release of said moneys has been repeatedly presented to the Securities and Exchange Commission without result. Agents and employees of the Securities and Exchange Commission and the Department of Justice have represented repeatedly that the release of moneys for distribution was imminent, and/or would occur within several weeks, and/or would occur within less than a month. Each of said representations have been made knowing them to be false, and at the specific direction of the named Defendants. These actions of withholding distribution of said moneys, without compensation and without due process of law, amount to a taking of the property of the individual Plaintiffs and of all similarly situated.”

16. “At all times mentioned herein, the Defendants acted with deliberate indifference or reckless disregard for the Constitutional and other rights of all Plaintiffs, or with the intention and knowledge that they were violating Plaintiffs’ Constitutional or other rights or to cause them other injuries, losses and damage.”

17. “As a result of the Defendants’ misconduct, each of the named Plaintiffs and all of those similarly situated, have been denied their Constitutional rights, including, but not limited to, their Fifth Amendment right to be secure in their property, free from taking without just compensation and without due process of law, and have suffered injuries and property loss in excess of Three Trillion Dollars.”

18. The fact that the SEC participated in a sting operation using CMKX, then lied to CMKX shareholder representatives is only one issue in this case, the second is the modus operandi of the SEC and other regulators involved, including the U.S. and Canadian Governments, and in particular the RCMP and FBI. Given the fact the SEC and these authorities have conducted sting operations over the past decade regarding the counterfeiting of the stock market it needs to be explained how the same crime continued unabated for a decade by the same perpetrators. Evidence that will be presented by the Coalition will include congressional investigations and whistleblowers from the SEC that clearly prove the SEC has engaged in several well known cover-ups of crimes involving the counterfeiting of the stock market and are in fact “in bed with the industry” they regulate to the point where they make regulations with the same perpetrators which aid in facilitating the crime and its cover-up. They have ensured that retail victims and the companies they invested in would never recover from the fraud committed against them, and they made sure the perpetrators would not be held accountable, the whole time multiple Government Agencies and authorities watched and did nothing to prevent trillions of dollars in loses to the general public who were unwitting victims in this pandemic fraud.

19. The SEC has for decades colluded with Wall Street firms, the DTCC, the Federal Reserve, hedge funds, and others to defraud all shareholders. Between 1996 and 2001 the SEC and FBI were tracking money laundering through Canada, and knew crime families were trading naked short through Canada as Canada had no affirmative determination laws. In 1998 the SEC received over 3000 comment letters regarding the abuses of naked shorting. In 1999 the SEC participated in “operation uptick” which identified hundreds of companies that were victims of crime families who worked in concert with major wall street firms (none of the firms or those working in these wall street firms were indicted despite the fact that the crime family members they worked with were convicted of RICO crimes). In 2001 the NASD presented the SEC a proposal to modify RULE 3370 to eliminate the loophole associated with the naked shorting through Canada (the loophole was a clear violation in itself of RULE 17A). In 2001 EagleTech Communications filed RICO charges against many well known brokers on Wall Street and eventually won their criminal RICO case against crime family member who worked with many of those well known firms. They finally closed the loophole in April 2004 better than two years later and trillions of dollars in counterfeit shares later, but other loop holes created by the SEC in collusion with these same perpetrators has allowed the crime to continue to today. In October, 2009 Senator Ted Kaufman was seeking cosponsors for bill SB 605, which if passed would require the SEC to reinstate the uptick rule and enforce other regulations against abusive short selling as the SEC themselves refuse to follow their constitutional mandate.

20. EagleTech Communications will be used as an example of one of thousands of victim companies by the same group of perpetrators. They are one of the best examples of what has happened as they have already received convictions in their criminal RICO case regarding the crime family members who worked with Wall Street firms to laundry their proceeds from counterfeiting EagleTech stock. They are also a great example how the SEC treats the victims in these cases and the perpetrators, as the SEC instead of going after the perpetrators went after the victim and protected the Wall Street firms who worked with the convicted crime family members. Excerpts from Rod Young, CEO of EagleTech communications, “in an August of 2004 luncheon meeting with a potential witness in Eagletech’s civil case a member of the CIA showed up un-announced to me wanting details of the involvement of Jonathan Curshen and his Costa Rican Offshore asset protection company Red Sea Management in the demise of Eagletech. I was encouraged to write a criminal referral to the U.S. Secret Service who is charged with investigating counterfeiting of corporate securities under 18-USC-514. I authored 15 pages with 100 pages of evidence implicating the SEC and the DTCC as accessories to the crime. That referral was hand delivered to the Secret Service in Washington DC as a courtesy by the agent.” Despite having overwhelming evidence and winning their criminal RICO case against the crime family member who aided Wall Street brokers who counterfeit their stock, the SEC deregistered EagleTech and forced the victim to have to file RICO charges against the Wall Street firms themselves. The Wall Street firms identified in “operation uptick” that were involved in committing RICO crimes against hundreds of companies received nothing, while crime family members went to jail who laundered the proceeds from these crimes. Inexplicably the SEC ran a sting but aided the perpetrators, while ensuring the victims companies identified in that sting would never recover by creating an illegal clause with these same perpetrators. This illegal ‘grandfather clause” allowed these perpetrators to avoid having to cover their counterfeit shares they created, thus ensuring the depressed stock price would never recover due to the dilution created by the counterfeit shares. These victims companies would never recover due to the collusion between the SEC and these corrupt firms, and unsuspecting public lost trillions of dollars buying fake stock in publicly traded companies.

21. Rod Young, CEO of EagleTech Communications stated “Every shareholder of any Company in America who purchased shares and cannot get them delivered has a cause of action against the SEC as an agency of the U.S. Federal Government for violation of their 5th Amendment Constitutional property rights.” EagleTech is just one of thousands of victim companies systematically manipulated and cellar-boxed by the brokerages under the supervision of the SEC and were then delisted / put out of business by the SEC when financially unable to meet their reporting and other business obligations, eliminating any obligation of the brokerage firms to deliver real shares or value to those they sold counterfeit stock to.” And this talking of the SEC, “In my opinion this action against the Company is designed to conceal its own culpability in, using the SEC’s own words, “delivery failures greater than a company’s total public float.” De-registration of the Company’s shares stands to reward manipulators just as a bankruptcy would, since the manipulators would never have to purchase the stock to close out delivery failures still on the DTCC’s books. In my opinion the SEC’s decision to grandfather known criminal securities manipulation has violated the Constitutional 5th Amendment rights of Eagletech shareholders by an inverse taking of their property without due process and without compensation