Man in diamond mine scandal dead but certainly not forgotten

Urban Casavant is dead, but don’t expect all the suckers who dumped millions into his diamond mine stock scam to believe it.

In fact, the Cult of Casavant and the CMKM Diamonds swindle continue apace despite the officially confirmed end of the line for the penny stock mastermind, whose shenanigans allegedly topped $70 million.

Investor chat rooms recently went into overdrive chewing on the possibilities. Some investors swore they didn’t believe Casavant was dead. Then again, some of those same investors still hold out hope he wasn’t conning them all these years.

When the Review-Journal last week published a story noting Casavant’s official death on Feb. 14 in Canada, one reader replied, “What a bunch of crap. Where are the documents where Urban was fighting extradition? I don’t believe a word of this article.”

Multiple unofficial reports on the Internet states Casavant had died during hernia surgery. Lifting that much bravado for so many years apparently took its toll.

The Las Vegas-based Casavant was indicted in 2009 on securities fraud charges. He and nine others on March 24, 2010, were slammed with a superseding indictment on a variety of securities fraud and other felonies that included conspiracy to money launder and tax evasion.

The Securities and Exchange Commission for years pursued Casavant and his crew on civil violations related to his infamous Canadian diamond boondoggle.

According to the superseding indictment, Casavant’s team used at least nine shell corporations to facilitate the unregistered sale of stock to customers recruited through his own contacts and a series of boiler room-style solicitations.

It wasn’t a small operation. Although shares in CMKM often traded in the fractions of a cent, according to the indictment, “the conspirators and their confederates caused these and other corporate shells to issue hundreds of billions of unregistered shares of stock to the defendants and their 14 nominees, associates, alter-egos and straw-purchasers.”

Of course, if Canadian diamond investment didn’t catch your fancy, Casavant’s crew back in 2006 was more than willing to sell you shares — as many as you desired! — in a guaranteed moneymaker called Worldwide Cannery and Distribution, which supposedly was shipping king crab from St. Petersburg, Russia, to the United States.

“In truth, the seafood cannery was not producing products or profits but was instead defunct and bankrupt,” the indictment noted.

Alas, no diamonds. And no crab, either.

The suckers chased good money after bad and held out hope of grand future paydays after reading the steady stream of forward-looking statements coming from Casavant and CMKM. As always, the diamond score was always just around the corner.

Eventually, many investors realized they were getting the runaround and lit up phone lines at the SEC, FBI, IRS and elsewhere.

The indictment states, “These shells did not conduct substantial business activities and produced no appreciable goods, services, or profits. Indeed, the principal business activities of these shells was the sale of unregistered shares of stock. Despite the elaborate facade constructed by the enterprise, investors in time recognized that shares of the particular corporate shell in which they had invested were of little, if any, value.”

By then, of course, Casavant had long since spent their money on everything from gambling forays at Strip casinos to expenses for a racing team that also marketed CMKM Diamonds.

His racing team briefly entered the 2012 U.S. Senate race between Dean Heller and Shelley Berkley. A racing enthusiast, as Nevada secretary of state, Heller had once driven a Casavant race vehicle. Heller through a spokesperson denied he had ever done Casavant any favors.

Although it’s not going to placate those investors who fantasize about recovering anything from their encounter with Casavant, his departure must have some people breathing easier: for one, those casino officials who played the gracious host to the high roller in the months and years after his activities were made public in the Review-Journal and on credible stock watchdog websites.

Word is Casavant blew a bundle at the tables.

Now he’s gone — but you don’t have to believe it if you don’t want to.

John L. Smith’s column appears Sunday, Tuesday, Wednesday, Thursday and Friday. E-mail him at jsmith@reviewjournal.com or call (702) 383-0295.