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United States v. Brian Dvorak, et al (CMKM)

Case number: 2:09-CR-00132-RLH-RJJ

May 21, 2021:  We originally scheduled the town hall for April 2021. To ensure that we are able to provide the most comprehensive presentation we can, however, we are rescheduling the town hall for Friday, May 28, at 10:00 a.m. PST.

Please accept our apologies for this delay, and please know that your case is a priority for the dedicated staff professionals and AUSAs in our office.

You can register for the virtual town hall by clicking here.

Town Hall Letter May 21, 2021

 

Defendants

Jeffrey Turino, Melissa Spooner, Ginger Gutierrez, James Kinney and Jeffrey Mitchell

 

U.S. District Court - Las Vegas, NV

Please be aware that the criminal prosecution in the District of Nevada (United States v. John Edwards, et al., 2:09-CR-00132-RLH-RJJ) is separate from and unrelated to a civil suit in the Central District of California that has now been dismissed (David Anderson, et al., v. Christopher Cox, et al., 8:10-CV-00031-JVS-MLG). In Anderson, the plaintiffs alleged that the SEC and other agencies of the U.S. Government conducted a sting operation against "illegitimate brokers, dealers, market makers, hedge funds, and other persons and entities that had engaged in naked short selling of CMKM Diamonds Inc. Stock." Essentially, the Anderson case involved allegations against an entire industry.

In contrast, the superseding criminal indictment in the Edwards case charged a more clearly defined group of defendants: specific insiders who engaged in fraud through shell companies. Specifically, between approximately May 1997 and April 2008, the defendants used various shell companies – including Pinnacle Business Management, Inc. (May 1997 to December 2003); CMKM Diamonds, Inc. (November 2002 to October 2005); St. George Metals, Inc. (July 2004 to July 2005); and Global Diamond Exchange, Inc. (November 2005 to April 2008) – to defraud purchasers of stock in those companies. The defendants secretly authorized increases in the number of available shares and falsely represented or hid the true number of shares from investors. At the same time, the conspirators issued billions of shares to themselves through affiliates. By falsely claiming that these shares had not been issued to company affiliates, the conspirators were able to sell these shares without restrictions imposed by law. By issuing false and misleading press releases regarding the companies’ business activities, the defendants were able to drive up demand for the companies’ stock while selling their shares at a profit.

Court Documents

Second Superseding Indictment Link to PDF

On March 24, 2010, the grand jury returned a sealed Second Superseding Indictment which added the following defendants: Jeffrey Turino, Nickolaj Vissokovsky and Jeffrey Mitchell. In addition, several new charges were added, alleging that certain defendants engaged in a conspiracy to conduct an enterprise engaged in a pattern of racketeering activity, a conspiracy to sell unregistered securities and to commit securities fraud and a conspiracy to commit money laundering. On May 6, 2010, the Second Superseding Indictment was unsealed.

Superseding Indictment Link to PDF

The superseding indictment in United States v. Edwards, et al., alleges as follows: the defendants combined and conspired to perpetrate a fraud involving the issuance and sale of CMKM stock over a period of several years. Hundreds of billions of shares of CMKM stock were sold to thousands of investors during that span. Investors in CMKM are invited (but not required) to complete the following questionnaire. The questionnaire solicits information pertaining to this case for purposes of enabling prosecutors to confer with and receive information and opinions from victims of the CMKM scheme. Please note that while the completed questionnaires will not be publicly accessible, relevant information may be disclosed to the court and/or defense counsel in accordance with the Federal Rules of Criminal Procedure and other laws.

Other Documents

Information and Assistance for Federal Crime Victims and Witnesses Brochure Link to PDF

Restitution Information Link to PDF

Press Release

Press Release Link to PDF

 

 

Updated May 21, 2021

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