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.
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.
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.
Sources: Mining.com, Periodico Express, Afmedios, Tequila Files, GuadalajaraReporter
Photo: Cinco Minas
Photo: Cinco Minas
