Replies to post #172275 on CMKM Diamonds Inc (fka CMKX)

[janice shell]

Just pathetic...

"When you started some time in March 2005, how complete was CMKM Diamonds' balance sheet?" Ms. Hakala asked.

"It was nonexistent," Ms. Herring replied.

"How complete was CMKM Diamonds' financial -- were CMKM Diamonds' financial statements?" the lawyer asked.

"They were nonexistent," Ms. Herring answered.

"How complete was CMKM Diamonds' general ledger?" Ms. Hakala queried.

"To the best of my -- I was never provided with a general ledger, so I would guess it was nonexistent as well," Ms. Herring said.

[chisox pat]

They are soooooo revoked

[Jim Bishop]

That is all just too funny. Thanks to Lee for obtaining the transcript and filling us in.

I almost fell off my chair when I saw this:

"There's expenses which -- okay," Ms. Herring began. "We won't call it retained earnings. We'll call it accumulated deficit."

LOL did she go to the same accounting school as Sherri?

I think Judge Murray had this mess figured out in minutes....but apparently some will need it all stapled to a two by four and smacked into their foreheads to figure it out.

[matrix]

Part V: CMKM hearing listens to two CEOs, one answers questions

2005-06-15 20:42 ET - Street Wire

Also Street Wire (U-*SEC) U.S. Securities and Exchange Commission
Also Street Wire (U-USCA) US Canadian Minerals Inc

by Lee M. Webb

CMKM Diamonds Inc.'s May 10 hearing before the U.S. Securities and Exchange Commission (SEC) saw two chief executive officers take the witness stand, but only one answered questions.

Rendal Williams, chief executive officer of U.S. Canadian Minerals Inc., a company with a number of ties to CMKM, provided answers to questions during both direct examination and cross-examination.

Urban Casavant, head of CMKM and the company's only officer, asserted his Fifth Amendment privilege and refused to answer any questions.

The administrative proceeding before Chief Administrative Law Judge Brenda P. Murray is to determine whether CMKM's stock registration should be suspended or revoked for failing to file periodic reports as required by U.S. securities law.

Leslie Hakala, assisted by co-counsel Gregory Glynn, presented the case for the SEC's enforcement division, which has the burden of proof in the case.

Lawyer Donald Stoecklein represented CMKM, with Anthony DeMint also registering an appearance on behalf of the company.

Bill Frizzell, a Texas lawyer, was granted limited third-party participation in the proceeding as counsel for a number of CMKM shareholders known as the Owners Group.

Before the hearing broke for lunch, the U.S. regulator called four witnesses including the company's auditor Neil Levine, who resigned effective the end of the hearing, Christopher Wall, an SEC information technology specialist, CMKM's transfer agent Helen Bagley and Suzanne Herring, an accountant hired in March.

The SEC called its fifth witness, Mr. Williams, when the hearing resumed at 2:45 p.m. following the lunch recess.

Walla Walla alumnus testimony

As previously reported by Stockwatch, U.S. Canadian Minerals has a number of connections to CMKM. Among other things, the two companies participated in a joint venture in the Fort a la Corne area of Saskatchewan. They also have some type of association with respect to a small gold mining operation in Ecuador.

Last year, U.S. Canadian Minerals peeled off 7.5 million shares to acquire a 5-per-cent stake in CMKM's mineral claims and reportedly went on to ante up $13.5-million in cash under a partially exercised option agreement to increase that stake by another 10 per cent. (All amounts are in U.S. dollars.)

Interestingly, the cash that U.S. Canadian Minerals reportedly funnelled into CMKM came from Mr. Casavant and four members of his family, according to an SEC filing.

U.S. Canadian Minerals and CMKM jointly hosted what was billed as a shareholders appreciation party in Las Vegas, Nev., last October. The revelry may have been somewhat muted by developments that unfolded just ahead of the party.

Mr. Williams's company declared a 3-for-1 forward stock split after the share price soared to a rather remarkable $18.75. Just as the split was to take effect, however, and just days ahead of the scheduled Las Vegas party, the SEC suspended U.S. Canadian Minerals on Oct. 28, 2004.

Following the suspension, U.S. Canadian Minerals was booted from the OTC Bulletin Board to the pink sheets where it has recently been changing hands for less than 40 cents per share.

U.S. Canadian Minerals is currently under investigation by the SEC and the company is now a delinquent filer.

Against that backdrop and the now apparently somewhat strained relationship between U.S. Canadian Minerals and CMKM, Mr. Williams was sworn in at the May 10 hearing.

Ms. Hakala's direct examination of Mr. Williams was relatively brief.

Mr. Williams testified that he was introduced to Mr. Casavant in January of 2004 by Ed Dhonau.

As Stockwatch has previously reported, Mr. Dhonau, whose full name is John Edgar Dhonau, has a number of ties to both CMKM and U.S. Canadian Minerals. Among other things, Mr. Dhonau's Nevada Minerals is involved in joint ventures with CMKM and he is the largest shareholder of U.S. Canadian Minerals.

According to Mr. Williams, soon after they first met, Mr. Casavant told him that CMKM "needed to be reporting."

"Did you tell him anything about that you thought he should be reporting or anything?" Ms. Hakala went on to ask.

"No," Mr. Williams replied. "I was rather surprised that he wasn't"

"Why were you surprised that he wasn't?" Ms. Hakala asked.

"I thought all public reporting companies had to be reporting," Mr. Williams answered.

"How did the conversation come up about the CMKM's reporting?" the SEC attorney queried.

"He just told me that he was working on becoming reporting," Mr. Williams said.

"Is that the only time you've ever discussed CMKM Diamonds' periodic reporting with Urban Casavant?" asked Ms. Hakala.

"No," Mr. Williams replied. "There have been a number of times that he told me that they were getting close to be reporting."

"How many times did he tell you that?" the lawyer asked.

"Over the last year?" Mr. Williams asked in return.

"In 2004?" Ms. Hakala clarified.

"Approximately ten to a dozen times," Mr. Williams said. "Ten to twelve times."

"Did Mr. Casavant ever give you a time by which CMKM Diamonds would be filing periodic reports?" Ms. Hakala asked.

"Yes, he did," Mr. Williams replied.

"When did he tell you that?" Ms. Hakala began another question. "First of all, when did he tell you that and then -- when did he tell you that?"

"I don't remember the exact date, but it was before the shareholders appreciation party last October," Mr. Williams testified.

"When was the shareholders appreciation party?" Ms. Hakala asked.

"It was approximately Halloween time," Mr. Williams said.

"And when he gave you a date by which CMKM Diamonds would be reporting, what date did he tell you?" the SEC lawyer asked.

"He told me that he was hoping to be able to announce that he was reporting at the party," Mr. Williams testified.

Ms. Hakala moved on to a different series of questions, asking Mr. Williams whether Mr. Casavant had ever shown him any CMKM financial statements or other books and records for the company. Mr. Williams testified that he had not been shown any such records.

"Did you participate in an interview with thegreenbaron.com on or about October 18th, 2004?" Ms. Hakala went on to ask.

"Yes, I did," Mr. Williams replied.

As previously reported by Stockwatch, the Green Baron is a stock touting operation that has been beating the drum for CMKM as "the stock play of a lifetime." The tout service released a webcast of a so-called interview involving CMKM last October.

"Who else was interviewed as part of that interview?" Ms. Hakala asked.

"Mr. Casavant and I was," Mr. Williams replied. "We were both interviewed."

"Was that interview ever made publicly available?" the lawyer asked.

"I believe so," said Mr. Williams.

"Where were you when you were interviewed?" asked Ms. Hakala.

"The interview took place at Mr. Casavant's home in Las Vegas," Mr. Williams replied.

"Were you both there at the same time?" the lawyer asked.

"Yes, we were," Mr. Williams said.

"Are you familiar with Urban Casavant's voice?" Ms. Hakala queried.

"Yes, I am," said Mr. Williams.

With that, Ms. Hakala's co-counsel Mr. Glynn told the judge that the SEC wanted to play a recording of the Green Baron webcast.

That drew an objection from Mr. Stoecklein, who said the recording had been admitted into evidence and stipulated to, so there was no need to play it.

Judge Murray suggested that while she could read the transcript of the interview when she returned to Washington, playing the recording might be beneficial to the unusually large number of people in attendance at the hearing.

"Everyone of these shareholders -- and I'll ask them to raise their hands -- how many have heard?" Mr. Stoecklein queried the audience.

Evidently the crowd of approximately 50 CMKM shareholders had heard the Green Baron interview.

"How many don't want to hear it again?" Judge Murray asked.

Evidently the courtroom audience did not want to hear it again.

"Okay," said Judge Murray, apparently with some humour. "You're overruled."

During the playback of the 17-minute interview, Ms. Hakala had the recording stopped only once in order to have Mr. Williams identify Mr. Casavant's voice.

Shortly after the playback was finished, Ms. Hakala wrapped up her direct examination and handed the witness off to Mr. Stoecklein for cross-examination.

CMKM's lawyer began by eliciting testimony from Mr. Williams that U.S. Canadian Minerals was a pink sheet company with reporting obligations.

"Are you current in your reports right now?" Mr. Stoecklein asked.

"No, I'm not," Mr. Williams replied.

Mr. Stoecklein went on to ask for the name of U.S. Canadian Minerals's auditor, drawing an objection regarding relevance from Ms. Hakala. After Mr. Stoecklein asked for "just a little leeway," Judge Murray overruled the objection.

Mr. Williams identified the company's auditor as Kyle Tangel.

"Okay," said Mr. Stoecklein. "And your counsel?"

"Roger Glenn, Edwards & Angell, for the corporation," Mr. Williams replied.

Mr. Stoecklein then turned to some questions regarding the relationship between CMKM and U.S. Canadian Minerals.

"Right now we process their ore for them in Ecuador," Mr. Williams replied.

"What part of the mining operation, if any, does CMKM have?" Mr. Stoecklein later asked.

"CMKM owns a shaft in claims that they bring the ore out of the ground and then they deliver them to our processing facility where we process the ore for them," Mr. Williams said.

"And how do you share in that revenue?" Mr. Stoecklein asked.

"It is -- we divide the gold up 50-50 and the precious metals," Mr. Williams replied.

"So is it fair to say if you have revenues, then CMKM has revenues out of that mining operation?" Mr. Stoecklein queried.

"Out of the ore they give us, yes," Mr. Williams said.

Judge Murray intervened to suggest that Mr. Williams's answer seemed to conflict with the testimony of CMKM's accountant, Suzanne Herring, who had testified that CMKM did not have any revenue.

Mr. Williams testified that he could not remember the exact dates when the ore delivery began, but he guessed that $90,000 or $120,000 worth of gold had been processed in 2004.

"And if CMKM were to receive 50 per cent of that, would that money come back, flow into the United States?" Mr. Stoecklein asked. "What happens to that revenue stream?"

"The first revenues have been put back into the mine to develop it," Mr. Williams said. "I am -- I'm not sure. Nevada Minerals is the operator of the mine and it's our responsibility to give the money to them. What relationship they have with CMKM, I'm not sure what that would be."

Mr. Stoecklein followed up with some further questions regarding the Ecuador operation before Judge Murray intervened seeking some clarification.

"And what kind of a plant is this?" the judge asked. "What is this plant?"

"It's a processing facility for gold and silver," Mr. Williams replied.

"And your company owns it?" Judge Murray asked.

"Yes, we do," said Mr. Williams.

"And CMKM Diamonds owns one shaft?" asked the judge.

"They own a shaft that actually gets the ore out of the ground," Mr. Williams replied.

"So when you say Nevada Minerals operates the mine, does CMKM Diamonds operate a shaft?" Judge Murray queried.

"No," said Mr. Williams. "They're the owners of it."

"They own one of the shafts that Nevada Minerals operates?" asked the judge.

"Is the operator of down there, yes," Mr. Williams said. "But they're the owners of it, I believe."

"And who owns Nevada Minerals?" the judge wanted to know. "Is that a public company?"

"No," said Mr. Williams. "It's a private Nevada corporation."

"And who owns this private Nevada corporation?" Judge Murray asked. "Do you own part of it?"

"No, I don't," said Mr. Williams.

"Does Mr. Casavant, if you know?" the judge asked.

"Not that I'm aware of," Mr. Williams answered.

"Who owns it, if you know?" Judge Murray still wanted to know.

"John -- John Dhonau," Mr. Williams replied.

"Okay," said Judge Murray. "I don't understand your relationship -- your company's relationship to CMKM Diamonds."

"Right now we just process the ore that comes from their mine," Mr. Williams offered.

"That's all you do with them?" asked the judge.

"In Ecuador, yes," Mr. Williams replied.

Mr. Stoecklein delved briefly into the historical significance of the Ecuador mine known as the American mine before Judge Murray intervened with some more questions.

"What were your total revenues in 2003, 2004 and 2005?" Judge Murray asked. "You being U.S. Canadian Minerals, total revenues."

Mr. Williams testified that he would "have to check with the auditor for that," but it was approximately between $90,000 and $120,000 for 2004.

"Is that gross revenue or net revenue?" Judge Murray asked.

"Gross," said Mr. Williams.

He went on to testify that he did not have the numbers with him for 2005.

"Did you make anything?" Judge Murray asked.

"Yes, we did," said Mr. Williams.

"Gross revenues," Judge Murray remarked. "You realized some revenues in 2005."

"Yes, we did," said Mr. Williams.

The judge went on to ask how much money the company made in 2003.

"We weren't in operation then," said Mr. Williams.

"You weren't," said the judge. "So you've been in operation one year."

"Fourteen months, fifteen," Mr. Williams offered.

"Fourteen months," Judge Murray said. "What were your net revenues in 2004?"

"I don't have the numbers with me," Mr. Williams said.

"Were they positive or negative?" Judge Murray queried.

"It was positive," said Mr. Williams.

"Positive," said the judge. "Thank you."

Mr. Stoecklein picked up his cross-examination, asking Mr. Williams how much money U.S. Canadian Minerals had put into the Ecuador processing facility.

"I don't have an exact number yet on what we've put into that plant," Mr. Williams replied.

"But you've made an investment -- " Mr. Stoecklein began.

"A large investment, yes," said Mr. Williams.

"Would you make that large investment if you were not anticipating making revenues from that large investment?" asked CMKM's lawyer.

"No, I wouldn't," said Mr. Williams.

Judge Murray had some further questions at that point, asking Mr. Williams about the $90,000 or $120,000 generated by the Ecuador operation.

"Are these figures divided in half?" Judge Murray asked. "You only have half of it?"

"No," said Mr. Williams. "That's the total amount of gold and silver that we got out."

"So where does their half come in?" Judge Murray queried. "CMKM Diamonds -- "

"They come out of that," Mr. Williams said. "Their half came out of that."

"Their half came out of that," Judge Murray repeated.

"Yes," said Mr. Williams.

"So from this Ecuadorial, whatever it is, they -- CMKM Diamonds grossed between $45- and $60,000," Judge Murray remarked. "That's gross, that's not net. Okay."

Mr. Stoecklein had a few more questions, asking Mr. Williams whether U.S. Canadian Minerals had specialists in accounting dealing with mining issues. According to Mr. Williams, the company did have such specialists.

"So am I to assume that there are some complexities in doing the accounting for this mining operation?" Mr. Stoecklein asked.

"Yes," replied Mr. Williams.

"Have any of these complexities caused you to be late in your filings of your reports?" CMKM's lawyer asked.

"Must be because he said his filings aren't current," Judge Murray broke in. "Didn't you say that?"

"That's right," said Mr. Williams.

That concluded Mr. Stoecklein's cross-examination, but the judge had a few more questions.

"What is your educational background," Judge Murray asked.

"I have a BS degree in mechanical engineering," Mr. Williams replied.

"BS degree in mechanical engineering from what school?" asked the judge.

"And mathematics," Mr. Williams added.

"Math," said the judge. "From what school?"

"Walla Walla College," replied Mr. Williams.

"I'm sorry?" said the judge, apparently not recognizing the name of that school.

"Walla Walla College," Mr. Williams repeated.

Judge Murray asked Mr. Williams to spell that out.

"And where is that?" she went on to ask.

"In Walla Walla, Washington," Mr. Williams replied.

"I should have known," said Judge Murray. "I should have known. All right."

On further questioning, Mr. Williams testified that he had been involved in the mining industry for two years and before that he had a food company that manufactured soy milk and infant formula.

"And what would be the capitalization of your company?" Judge Murray asked. "How much have investors put into your company?"

"I don't have those numbers," Mr. Williams replied.

"Do you have any idea?" asked the judge.

"Not -- not exact, no," said Mr. Williams.

"Okay," said Judge Murray. "Yes."

With the judge's questions addressed, Mr. Frizzell began his cross-examination.

The lawyer representing the Owners Group drew from Mr. Williams that U.S. Canadian Minerals had a joint venture agreement with CMKM.

In response to a subsequent question from Mr. Frizzell, Mr. Williams testified that U.S. Canadian Minerals had invested in CMKM.

"How much money?" Mr. Frizzell asked.

"I don't have the exact dollar amount," Mr. Williams said.

"Did you also give some shares of your company to CMKM Diamonds?" asked Mr. Frizzell.

"Yes, we did," Mr. Williams replied.

"How many shares," Mr. Frizzell queried.

"I don't remember the exact amount," said Mr. Williams.

"Was it less than a million shares?" Mr. Frizzell asked.

"No," Mr. Williams replied.

"You know, don't you, what happened to those shares that you gave to CMKM Diamonds, Inc.?" Mr. Frizzell asked.

"Yes, I do," said Mr. Williams.

"What happened to them?" asked Mr. Frizzell.

"Mr. Casavant gave them to his shareholders," Mr. Williams replied.

Moving to another line of questioning, Mr. Frizzell wanted to know whether anything unusual had happened at the shareholders appreciation party in Las Vegas last October.

Mr. Williams testified that he had no recollection of anything unusual happening at the party.

"When did the SEC investigation into your company begin?" Mr. Frizzell subsequently asked.

"I don't know the exact date it started," Mr. Williams replied.

"In relation to this shareholders party," Mr. Frizzell said, drawing an objection from Ms. Hakala.

Mr. Frizzell argued that the timing of the investigation might very well relate to why Mr. Casavant was not able to make an announcement about reporting or some other things at the shareholders party.

"I think you're putting words in the witness's mouth," Judge Murray told the Texas lawyer. "He's told you he doesn't know."

"Somebody needs to put some words in his mouth and -- I don't mean -- " Mr. Frizzell stated, drawing another objection and a motion to strike from Ms. Hakala.

"Yeah, hold on," Judge Murray said.

"I'm not trying to be disrespectful," Mr. Frizzell said. "I'm just trying to get an answer to the question, Your Honor."

"No," said Judge Murray. "I take from the witness's demeanor that he's trying to tell the truth, and he has no idea what you're talking about.

"I don't think he's trying to get around your question. I think the gentleman honestly doesn't know what you're talking about.

"He has said he doesn't remember the date that the investigation started.

"Is that true?"

"I don't know when they started investigating me," Mr. Williams said. "That was his question. I know when I found out about it. I -- I know when he -- "

Mr. Frizzell tried to ask the question differently.

"Were (sic) there anything that happened at that party or right before that party that might have caused someone not to be announcing things that they wanted to announce at that party?" Mr. Frizzell asked. "To your knowledge."

"I don't know what other people were thinking," Mr. Williams said. "I wasn't planning on making any announcements at the party."

"Pass the witness, Your Honor," said Mr. Frizzell, ending his cross-examination.

Ms. Hakala rose for a short redirect.

"Mr. Williams, are you aware of anything that CMKM Diamonds was planning on announcing to shareholders at that party in Las Vegas," Ms. Hakala asked.

"No, other than Mr. Casavant said he was hoping to have his reporting done, but that's all," Mr. Williams replied.

"When did he tell you that?" asked the SEC lawyer.

"I don't remember the exact date," said Mr. Williams.

"Before the party, did you ever become aware that he would not be able to announce reporting then?" Ms. Hakala asked.

"No," Mr. Williams replied.

"Did anyone ever say to you that we were planning on making a statement or filing reports but because the SEC has done something, we aren't going to do what we were planning on doing?" Ms. Hakala later asked.

"No, they didn't," said Mr. Williams.

Ms. Hakala moved on to an attempt to throw some further light on the Ecuador operation.

Among other things, the SEC lawyer drew from Mr. Williams that half of the approximately $90,000 to $120,000 reportedly generated from processing ore at the U.S. Canadian Minerals facility was paid over to Nevada Minerals.

"Do you know what they did with the money?" Ms. Hakala asked.

"No, I don't," Mr. Williams replied.

"Do you know what financial arrangements Nevada Minerals has with CMKM Diamonds?" the SEC lawyer asked.

"No, I don't," Mr. Williams said.

"Have you ever had any conversations with Ed Dhonau about CMKM Diamonds owing money down there?" Ms. Hakala later asked.

"Yes, he has mentioned that CMKM Diamonds does owe him some money," Mr. Williams testified.

After a few more questions, Ms. Hakala wrapped up her redirect examination and Mr. Williams was excused.

The Fifth

Mr. Casavant was then called as the SEC's final witness. After being sworn in, Mr. Casavant stated and spelled his full name, Urban Armand Joseph Casavant, for the record.

"What is your occupation?" Ms. Hakala asked.

"Fifth," came the one-word reply from Mr. Casavant.

Gerald Griffin, one of two lawyers representing Mr. Casavant, rose to explain that his client would be asserting his Fifth Amendment privilege to all questions from the SEC.

After a brief discussion, Mr. Casavant was asked to read for the record the Fifth Amendment privilege he was asserting.

"Upon advice of counsel, I respectfully refuse to answer the question pursuant to the Fifth Amendment to the United States Constitution on the grounds that the answer may tend to incriminate me and/or subject me to fine, penalty, and/or forfeiture," Mr. Casavant read the prepared statement.

After a further brief discussion, it was agreed that Mr. Casavant could shorten the response to "Fifth Amendment" for subsequent questions.

"Mr. Casavant, where do you work?" asked Ms. Hakala.

"Fifth Amendment," said Mr. Casavant.

"What is the address there?" came the next question.

"Fifth Amendment," came the reply.

"And what is your role there?" Ms. Hakala asked.

"Fifth Amendment," said Mr. Casavant.

The SEC lawyer then asked Mr. Casavant to look at an exhibit of a Jan. 7, 2003, news release.

When the witness was asked whether he had found the exhibit by both the judge and Ms. Hakala, Mr. Casavant's other lawyer, David Chesnoff, rose.

"I don't want him to answer any questions so -- including that question," Mr. Chesnoff said.

"Fifth Amendment," Mr. Casavant chimed in.

Another discussion ensued, with Mr. Stoecklein raising an objection for the record about harassment.

"The witness has already testified that he's pleading the Fifth," Mr. Stoecklein said. "We need the record to reflect that this is harassment."

Mr. Chesnoff offered some thoughts, too.

"Your Honor, also in addition, just so the record is clear, the Fifth Amendment is a protection," Mr. Chesnoff said. "It's guaranteed to every U.S. citizen and every person within the jurisdiction of the United States.

"It's not any kind of acknowledgement of any kind of guilt or admission of any kind. It's rather a protection against the potential for the government to make accusations whether they're true or not.

"In addition, Your Honor, the Fifth Amendment protection avoids the possibility of the government putting somebody in what's characterized as a perjury trap or accusations that false statements are made.

"And in the history of SEC investigations, that's been a problem for people who have actually wanted to co-operate and find themselves not giving the answers that the SEC wants to hear and then subjecting themselves to prosecutions for false statements.

"So with that in mind, Your Honor, upon the advice of two counsel who are both advising him based on our experience, we're going to ask that he just decline to answer any questions, and most respectfully you, Your Honor, because I've been observing and I'm not trying to be discourteous because you run a great proceeding, but he's not even going to want to answer questions about whether things are in front of him or not."

In further discussion, the lawyers and the judge agreed that Mr. Casavant did have the right to assert the Fifth Amendment privilege in the civil proceeding.

There was also some discussion of the ramifications flowing from a company's chief executive officer asserting the Fifth Amendment privilege in a civil proceeding.

According to the SEC, an adverse inference could be drawn as to the company in that situation. Evidently that was Judge Murray's preliminary understanding, too.

"If the president of the company takes the Fifth Amendment and there's an adverse inference to be drawn, it says if the president of the company answered the questions truthfully, it would damage the company," Judge Murray said. "It would be adverse to the company's position in this case.

"I think now you all lawyers can argue about that on a brief, but that's my understanding, but I'll have to read up on the law. Okay.

"Well, let's just finish with the witness if we can. So you want to make a record that you're asking him specific questions that he's refusing to answer them, so let's hear the question."

With that, Ms. Hakala returned to the Jan. 7, 2003, news release, reading a sentence from it for the record.

"The purpose of the audit is to make sure that every shareholder of record is identified for CMKI's mandatory share and cash dividend policy," Ms. Hakala read out.

"Mr. Casavant, was a shareholder audit ever done?" the SEC attorney queried.

"Fifth Amendment," said Mr. Casavant.

"Was every shareholder of record identified?" the lawyer asked.

"Fifth Amendment," said the witness.

"Is it your intention to assert the Fifth Amendment privilege against self-incrimination as to all questions regarding the shareholder audit?" asked Ms. Hakala.

"Fifth Amendment," said Mr. Casavant.

Ms. Hakala turned next to the minutes of a Jan. 12, 2003, special meeting of the company's board of directors authorizing the issuance of shares.

"Mr. Casavant, did CMKM Diamonds or, as it was formerly known, Casavant Mining Kimberlite International, issue stocks to over 300 shareholders of record on Jan. 12, 2003?" Ms. Hakala asked.

"Fifth Amendment," was the reply.

"Were those shares issued for field work in Canada?" the lawyer asked.

"Fifth Amendment," said Mr. Casavant.

And so it went, with Ms. Hakala posing questions regarding a number of exhibits including press releases and a July 22, 2003, Form 15 filed with the SEC claiming that the company had less than 300 shareholders.

To every question, Mr. Casavant intoned, "Fifth Amendment."

Mr. Casavant asserted the same privilege when asked whether he knew Mr. Williams and when asked about conversations he had with the chief executive officer of U.S. Canadian Minerals.

"Is it your intention to assert the Fifth Amendment privilege against self-incrimination as to all questions regarding steps taken by CMKM Diamonds to prepare periodic reports?" Ms. Hakala asked as she was nearing the end of her direct examination.

"Fifth Amendment," said Mr. Casavant.

"And is it your intention to assert the Fifth Amendment privilege against self-incrimination as to all questions regarding CMKM Diamonds?" Ms. Hakala queried.

"Fifth Amendment," said Mr. Casavant.

That ended Ms. Hakala's examination.

Not surprisingly, neither Mr. Stoecklein nor Mr. Frizzell had any cross-examination.

Before the witness was excused, Judge Murray drew from his lawyers that neither one would be billing CMKM for representing Mr. Casavant.

As Mr. Casavant stepped down, Ms. Hakala told the court that the SEC had concluded its direct presentation in the case.

Stockwatch will review testimony from CMKM's witnesses in following articles.

The saga continues.

Comments regarding this article may be sent to [e-mail].

(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; Feb. 11, 14, 18, 22 and 23; March 1, 3, 4, 7, 14, 15, 16 and 21; and June 6, 8, 9, 10, 13 and 14, 2005.)

Ref: http://www.stockwatch.com/swnet/newsit/newsit_newsit.aspx?bid=B-458722-U:CMKX&symbol=CMKX&ne...