Indictments in CMKM Diamonds Naked Shorting Scam

In tracking the strange story of CMKM Diamonds, an outright stock scam whose shareholders noisily blamed "naked short selling" and not the company, one thing always bothered me as SEC actions piled up: why haven't there been indictments?

Well, today there were. The Las Vegas Review-Journal reports that indictments have been unsealed naming six people in the $60 million CMKM stock swindle, including loudmouth ex-CEO Urban Casavant, who has been replaced by the loony Patrick Byrne as love object of the naked shorting conspiracy theorists.

Casavant "remains at large," according to the newspaper.

"At the threshold, the scheme required that the conspirators control a publicly traded corporation," according to the indictment. "The conspirators found a corporate shell suited to their needs in Cyber Mark International Corp."

Cyber Mark had been incorporated in Delaware in 1998, according to the indictment, and had been defunct since 2001.

The document alleges that Edwards used the name "Ian McIntyre" to acquire control over the Cyber Mark corporate shell around September 2001 and that he incorporated a Nevada company with the same name in April 2002.

Casavant later gained control of Cyber Mark, according to the indictment, and the company changed its name in December 2002 to Casavant Mining Kimberlite International.

In February 2004, according to the indictment, the company took the name CMKM Diamonds.

And the rest is history. The company instantly became a naked shorting poster child--the invariable fate of pump-and-dump scams as the law starts to put a noose around their necks. CMKM managers gambled on the sheer stupidity of a large number of their shareholders--after all, they had bought this piece of dreck--and they were right. They were dumb. Some pranced around the offices of the villainous Depository Trust & Clearing Corp. in 2005 (I work there, according to these morons), made damned fools of themselves and diverted scarce police resources.

It's been an interesting couple of days in the world of baloney. First Overstock.com is investigated by the SEC--which has nothing to do with naked shorting, but proves again how people screaming loudest about NSS are often crooks and scoundrels themselves. In this case, Overstock has systematically cooked its books, and has been allowed to do so by an inert SEC.

And now this, the long-delayed criminal case against CMKM. Will wonders never cease. Will Universal Express be next? The hood-in-chief there is named Richard Altomare, and the sleazy cast of characters includes uber-loon Bud Burrell, a self-confessed, undisclosed "consultant" to that crooked company. Altomare has already spent some time in prison, but for contempt of court.

It takes a while for crooks to be brought to justice, but eventually, most of the time, it happens. It's funny how the naked shorting loons always have contended that "jail is coming" for their real and imaginary adversaries. Yet their heroes are the ones targeted in investigations and indictments. The way some of these guys talk in the stock message boards, with their homicidal fantasies, I'm tempted to get the cops to dig up their backyards.

One down, several more to go.

© 2009 Gary Weiss. All rights reserved.