Reporting on the Mexican Cartel Drug War

Dallas Mining Company Executives Found Dead in Rio Santa Rio

Tuesday, February 12, 2013 |

Borderland Beat

Two men, reportedly the CEO and CFO of U.S.-based exploration firm Southridge Minerals found dead.

According to several local media outlets, their bodies were found dead floating down Rio Santa Rosa river by local farmers, on the border between the municipalities of Ixtlan del Rio, Nayarit and Hostotipaquillo, Jalisco.local press reports

The bodies, corresponding to two men in their late 30s, were found by farmers of Ixtlan del Rio who were working their land near Hostotipaquillo, Jalisco. They also recovered a briefcase with documents revealing the names of Michel Davies and Derald Johnston, which are the names of Southridge Minerals’s CEO and CFO. The farmers said however, were forensic experts of Nayarit took bodies because they were in state territory.

The company has been involved in a recent controversy over its rights over the Cinco Minas project. The conflict worsened early this month, after a Canadian junior released an independent report revealing that Southridge’s Cinco Minas property has been non-operational for the past several years.

On February 5, Bandera Gold CEO Stephen Roehrig released a statement claiming  “press releases issued by Southridge Enterprises, Inc. (‘SRGE’ or ‘Southridge’) contain false and misleading statements about current mining activity and SRGE’s alleged ownership of the Cinco Minas project.”This followed the U.S. Securities and Exchange Commission’s announcement on December 28 that it had “temporarily suspended trading in the securities of Southridge because of questions regarding the accuracy of statements made by Southridge in press releases to investors concerning, among other things, the company’s business operations and arrangements.

Despite the U.S. company allegedly claiming the contrary, Canada’s Bandera Gold (TSXV:BGL) published a detailed report with photos and videos showing evidence the site and machinery have been “completely non-operational for some time.”

The Dallas-based firm, however, says in its website that it paid $7.5 million for exclusive concessions to mine the Cinco Minas and Gran Cabrera sites respectively located 100 and 135 kilometers northwest of Guadalajara in 2010. This fact is disputed by Bandera Gold, which claims ownership of both mines and displays the concession certificates on its website.

Speculation it could be an elaborate con job
a-faked-in-pump-and-dump-scam

Further investigation revealed that Southridge Enterprises is a corporation with a shady past to put it lightly. A 2006 article by British newspaper The Guardian revealed that now-defunct subsidiary Southridge Ethanol was essentially a fake company established as part of a “pump and dump” scam.

“Pump and dump” is a form of fraud which involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme “dump” their overvalued shares, the price falls and investors lose their money.

During its investigation, The Guardian attempted to contact Alex Smid, then chief executive of Southridge Enterprises, but received no response from the listed telephone numbers or email addresses.
In 2010 the Vancouver Sun reported that an arrest warrant was issued for Smid for four counts of tax evasion and tax fraud allegedly committed from 2002 to 2004.

Later that year an investigation by PinkInvesting.com described Smid as a “seasoned criminal involved with the Mexican and Russian Mafia whose unscrupulous practices date back to 1980. His criminal feats include extortion, blackmail, loan sharking, counterfeiting, prime bank fraud and identity fraud.”

Smid’s current whereabouts are unknown. He is no longer listed on the Southridge website but a recent investigation by the U.S. government showed that much of the public information provided by the firm is untruthful.

On December 28, 2012, the U.S. Securities and Exchange Commission (SEC) announced it had “temporarily suspended trading in the securities of Southridge because of questions regarding the accuracy of statements made by Southridge in press releases to investors concerning, among other things, the company’s business operations and arrangements.”

With pump and dump scams reliant on aggressive PR campaigns to attract investors, the SEC was clear to “caution broker-dealers, shareholders, and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by the company.”

The latest dubious press release came on Monday, stating that Southridge had sold its concession to the Cinco Minas to Mexican mining firm Minera San Jorge. The phone number listed for Minera San Jorge did not appear to be functional and CEO Jaime Arturo Anaya Trejo did not reply to the Reporter when contacted via email.

At this time it is unclear what fate befell Michael Davies and Derald Johnston but it seems most likely that the story of their death was planted in the local press and it remains possible that theirs were false identities invented as part of this elaborate con.



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14 Borderland Beat Comments:

Anonymous said...

Despite all of the " violence " over the last I don't know 6+ years in Mexico, mining has been on the rise. Foreighn investments were at an all time high, minerals were being mined all over the replublica. One of the things the country is blessed with and also one of the very best countires to mine and establish a business is Mexico. That is why Canadians, Spaniards, etc etc have flourished with investments. I hope that this is an isolated inncident becuase the last thing Mexico needs is to lose alot of " investors " and mining hits a slump. That would be devasting to both the US and Mexico, because alot of trade goes back and forth. There have been circumstances and we have heard some of the horror stories with lost loads of gold and they having to implement other shipping tactics. We know the coal sector in COAH took a slump over the last year or so and how the corruption has affected them but never has a high level CEO and CFO being killed. Let's hear what EPN has for covering up this one, it's going to be interesante de verdad.
Saludos,

Anonymous said...

that's what happens when you play with other people's money !!

Anonymous said...

they can use a little "Texas justice" down on Wall Street .

Anonymous said...

This company never even pertended to play by any rules and this is what happens to foreign 'business' men operating dishonorably in Mexico. Heed the warning to play by the rules. IMPUNIITY is the ley of the land in Mexico.

Anonymous said...

Sounds to me like corporate assasination

Anonymous said...

So what is the U.S and the Republican'ts of Texas going to do about it?

Anonymous said...

This is related to cartels....how?

Anonymous said...

Sounds like corrupt executives trying to steel mexicos assets without paying who did they think they were fooling. Havana good to hear from you .

Anonymous said...

807 if u end up dead floating in river its got sumthing to do wt organize crime genius

Anonymous said...

Hey 9:50 so all the dead bodies all over the world floating on water becuz of organzied crime? Right. ......genius

Anonymous said...

8:07- unless this is domestic violence- cartels manage to get their greedy, greasy mits into anywhere there is any measly profit -everywhere-even church tills. We shall see

Anonymous said...

Lots of people were found floating in rivers and its not cartel related.but this is suspicious to maybe some shady business

Anonymous said...

"Sounds like corrupt executives trying to steel mexicos assets without paying"
Yeah right,just walk into Mexico and steal their mineral producing mines without Mexico knowing about it?Couldn't be selling something on and on could it?Another company claims they own it,and here's another company saying they own it?Its a conspiracy,,,,,

Havana Pura said...

Hi- for those interested..

I updated this story.

Seems there is speculation this could have been an elaborate con job
a-faked-in-pump-and-dump-scam.

It was sure something not on "the up-and-up"

http://theguadalajarareporter.com/index.php/news/news/regional/41564-death-of-mining-executives-faked-in-pump-and-dump-scam

Havana

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