SEC Complaint In Las Vegas Alleges Bogus Diamond Stock Scheme

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LAS VEGAS (AP) - The federal Securities and Exchange Commission
is accusing two men in Nevada of orchestrating a stock scheme that
reaped millions of dollars selling penny shares in a bogus diamond and gold mining company.

John Edwards, 65, a British citizen, and Urban Casavant, 51, a
Canadian who has since moved back to Canada, are accused in court
documents filed in U.S. District Court of making a combined $58 million with the scheme involving Casavant's company, CMKM Diamonds Inc.

Several others are accused of clearing some $6.3 million. Nine individuals and two other companies are named as defendants in the
civil complaint, which the SEC filed on Monday.

It names Edwards as the mastermind of an operation that manipulated CMKM stock prices and volume from January 2003 to May 2005. Casavant is named as the sole active director of CMKM Diamonds until March 2007.

"CMKM had no meaningful operations other than issuing and promoting its own stock," the complaint says. The commission alleges the company issued up to 622 billion shares of purportedly unrestricted stock in one 20-month period.

About 40,000 investors bought CMKM stock at prices varying from
1/1,000th to 1/100th of a cent and trading at volumes sometimes
exceeding 2 billion shares a day, according to the complaint.

Attempts to reach Edwards by telephone Friday were unsuccessful.
A lawyer representing CMKM Diamonds of Tyler, Texas, did not
immediately respond to a message seeking comment. Officials at 1st
Global Stock Transfer LLC, a Las Vegas firm also named as a
defendant in the case, declined comment. A phone number for NevWest
Securities Corp., a Las Vegas company identified as a broker of the
stock deals, was disconnected.

A hearing schedule has not been set. A spokeswoman with the SEC
office in Los Angeles, which is handling the case, did not immediately respond to a message Friday seeking comment.

The commission seeks a permanent injunction, civil penalties, and an accounting and disgorgement of assets by the defendants, as well as a penny stock trading ban against Edwards, Casavant and others and an order prohibiting Casavant from acting as an officer or director of any public company.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

AP-NY-04-11-08 1627EDT