Carlsbad man claimed his mines were worth $30 billion

But they weren't worth anything, says SEC

Long before Mark Twain defined a gold mine as a hole in the ground with a liar on the top, slippery salesmen have tried to peddle highly inflated mining claims to naive investors.

On Friday (July 28), the Securities and Exchange Commission filed a doozy of a case in federal court. Defendants are long-time Carlsbad pitchman Robert W. Wilson and two Wyoming companies he owns. Wilson said he was going to resuscitate a mining project in Yuma that could produce graphite. He initially said the claim was worth $18 billion, then escalated the value to $30 billion.

Investors would get a 20 percent profit in 18 months, said Wilson. But in truth, Wilson's companies had "no significant assets" other than an option to purchase the claims on federal land, says the securities commission. Wilson estimated the size of a deposit by taking readings from his car's odometer as he drove around the land, and then made an estimate based on the price of the material. Wilson "has no education or training in mine valuation techniques, "says the securities agency.

In 2015 he told investors that the graphite deposit "may be upwards of 4 billion tons!" and the material was then selling for $2,500 per ton. He brought in $2 million in the graphite project, and used the money on a massage spa, residential rent, restaurants and payments to participants in previous investment offerings. Thus, he was also running a Ponzi scheme. He brought in $2 million on the Yuma project.

In 2015, he claimed that a gold project he was peddling was worth $375 billion. In 2011, he was slapped with a desist and refrain order from the State of California barring him from making any oral or written untrue statements in a securities offering.

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Comments

Just wondering why are these cases filed civilly? Yes, I understand the SEC has limited authority, but these people are criminals perpetuating frauds usually involving millions. Whether it's the SEC or the State of California slapping these suspects with ridiculous cease and desist orders, do any ever ready stop? They should be going to prison not making false promises.

JustWondering: I agree with you. If this isn't criminal fraud -- not just civil fraud -- what is? Again, one problem is that politicians, who gobble up money from Wall Street, make sure that the civil agencies such as the SEC and criminal prosecutors don't have enough money to pursue many white collar cases.

Therefore, crime pays most of the time, so the government is not a deterrent. That's exactly how Wall Street wants it.

Another problem is that big companies and Wall Street firms have more money to defend such cases than the government has to prosecute them. The defense will flood the government with demands for documents, etc. which makes prosecution very difficult.

In the case of the SEC, FCC, DOH, state regulatory agencies and the like, the lawyers are just there long enough to get a plush job with a Wall Street white shoe law firm. So they really don't pursue the cases vigorously. It's called the revolving door. Best, Don Bauder

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