- Text smaller
- Text bigger
With its stock rocketing up over 750 percent in a year, Silverado Gold Mines stands out in a market plagued by continued corporate financial scandals and stock market volatility. With gold recently nearing a six-year high and investors looking for a solid buy, gold is becoming an ever more attractive option. Add to this the company’s announcement that David Tice of the Prudent Bear Fund is an investor, and there’s a definite buzz surrounding Silverado – a buzz WorldNetDaily decided deserved a closer look.
Silverado Gold Mines Ltd. (OTCBB: SLGLF) is a 1964-chartered company which begam SEC reporting in 1978, under SEC regulations that require companies that have 50 percent or more of their shareholders or properties in the U.S., to report. The company, through its wholly owned subsidiary, Silverado Green Fuel Inc., has owned and operated various gold properties in Alaska. In addition, Silverado Green Fuel Inc. is involved in creating what the company describes as “the world’s first low-cost, environmentally friendly fuel made from coal as a replacement to heavy oil.”
Silverado also began trading July 26, 2002, on the Berlin stock exchange with the ticker symbol “SLG” and the German security number (WKN) 867737.
Currently the company’s gold-mining activities are focused on its Nolan mine, the company’s only mine in operation.
The Nolan Gold Project consists of five contiguous properties covering approximately six square miles, eight miles west of Wiseman, and 175 miles north of Fairbanks, Alaska, in the foothills of the Brooks Range, in an area known as the Koyukuk Mining District.
The company says it expects to yield $19.7 million in net revenues over the next three years from the Nolan Mine. “We anticipate generating $7.5 million in revenues net to the company in this year alone,” CEO Garry Anselmo announced in November.
Silverado’s predictions are intriguing, considering that the company’s most recent 10Q filing (a quarterly report required by the Securities and Exchange Commission) shows $997 in gold sales for the nine months ended Aug. 31, 2002, and gold inventory at $10,169. For the same period the previous year, gold sales were at $1,786 and gold inventory at $11,140.
One stock analyst, who declined to be named, raised doubt over Silverado’s November 2002 prediction of $7.5 million in gold sales “this year.” SEC filings indicate processing of gold taken from the Nolan mines won’t commence until spring of 2003, and gold sales commence in summer of 2003. Silverado’s Anselmo explained to WND that the term “this year” really refers to a one-year period beginning November 2002.
According to SEC filings, The Company’s total proven and probable gold reserves (in Troy ounces) from all its Alaskan properties are as follows: proven-111,298 ounces; probable-329,616 ounces.
However only the Nolan mine is currently in operation. The Nolan mine lists 11,802 ounces in proven reserves, and 48,262 in probable reserves, for just over 60,000 ounces in both proven and probable reserves combined.
However, in paid “advertorials,” including one which appeared in the Bull & Bear Financial Report, the company stated, “Although the Nolan mine has proven and probable reserves of 141,000 oz./au, additional potential reserves have been identified and await drill analysis. … In addition the company has indicated reserves totaling one million oz./au.”
Even though Nolan is the company’s only operational mine, the advertorial went on to state: “The Ester Dome, Eagle Creek and Marshall Dome properties contain about 900,000 ounces of gold valued at about $300 million,” concluding, “Silverado is targeting global gold purchasers in this rising market.”
However, the company’s most recent 10-KSB filed with the SEC on March 15, 2002, indicates that the company has “no planned activity” on the Ester Dome Project (which includes the mentioned Eagle Creek and Marshall Dome properties), “except for maintenance.” Both Marshall Dome and Eagle Creek are listed as “undeveloped” and do not “contain any open-pit or underground mines.” In addition, “There is no mining plant or equipment” located on either property. And “currently” there is “no power supply” to either Eagle Creek or Marshall Dome.
The SEC report states, “No reserves are included at this time for the Eagle Creek property,” adding it “does not have any proven mineral reserves.”
The Grant Mine’s mill and equipment, also part of the Ester Dome Project, are listed in “operating condition, but are not currently operating.” The Ester Dome has proven reserves of 99,496 ounces, and probable reserves of 286,354 ounces of gold, but the company adds it is “minimizing work on this property to maintenance,” in order to concentrate on Nolan.
In addition, the company’s most recent 10Q states: “The Company also plans to option to third parties the Ester Dome and Marshall Dome properties.”
The advertorial also mentioned the Smith Creek property (part of the Nolan Gold project), referring to “advanced exploration and development.” But according the company’s latest 10KSB filing: “Currently, the Company has no mining activity on the Smith Creek except for its required Federal mining claims payments.”
In a paid advertorial appearing in the Nov. 2, 2002. edition of the Bull & Bear Financial Report, the company said it is basing its revenue projections on “assay results from previous drilling programs,” adding: “However there is a good chance revenues could be even higher.”
In a taped interview, WorldNetDaily asked CEO Anselmo whether Silverado performs its own assaying. “Oh no, we use an independent lab,” Anselmo told WND, “typically ChemEx lab, and so all our assays go outside.”
Silverado CEO Garry Anselmo
He then added: “Now at Nolan, [laughter] gold is an assay problem. Assays are based on representative samples. Sampling with gold is very difficult.” Anselmo stated that a sample from a placer mine “could not be representative, you would not have accurate data,” adding, “so in this case we’ve done our own work.” The CEO also made reference to “other engineers” on the project, and “reports we’ve had written that have verified these findings,” concluding, “That’s what we fall back on for our reserves at Nolan.”
The company’s annual report filed on March 15, 2002, states: “The proven and probable reserve calculations for the Company’s mineral properties were determined by Mr. Edward J. Armstrong, Certified Professional Geologist. Mr. Armstrong is president of the Company’s subsidiary, Silverado Green Fuel Inc.”
Armstrong is also president of Tri-Con Mining Inc. and Tri-Con Mining (Alaska) Inc. Tri-Con is a privately owned corporation controlled by Anselmo – president, chairman, CEO and a director of Silverado.
(The Tri-Con Group comprises operations, exploration and development contractors that have been employed by Silverado under contract since 1972 to carry out all its fieldwork and to provide administrative and management services.)
Silverado’s most recent 10Q filing states: “The Company is in arrears of required mineral claims and option payments for certain of its mineral properties at August 31, 2002, in the amount of $285,500 and therefore, the Company’s rights to these properties with a carrying value of $315,000 may be adversely affected as a result of these non-payments.”
A ‘revolutionary new fuel’
Silverado is also strongly touting its “revolutionary new fuel process.” The company entered the fuel sector in 2000, forming a New Fuel Technology Division,” which operates out of Fairbanks, Alaska. Silverado has stated that it is the “top contender” for and “close to winning” a $9.7 million Department of Energy grant to demonstrate the commercial feasibility of the fuel.
In addition, the company’s promotional materials have claimed variously that Silverado “controls this technology,” that the process is “patented,” and that Dr. Warrack Willson, who is now vice-president of Silverado’s Fuel Technology division, “holds the proprietary rights to the low-rank coal water fuel (LRCWF) process.”
Ron Pierce, director of the University of Alaska’s Clean Coal Project, a project also tasked with demonstrating the commercial feasibility of low-rank coal water fuel, scoffed at the idea that making the fuel was a “proprietary process.”
Low-rank coal water fuel (LRCWF) is essentially a slurry of water and coal particles that can serve as a non-hazardous replacement for oil. And experts say the fuel is not “new”; there are two decades of research and symposia on record related to LRCWF, and research on low-rank fuels and coal-water fuels in general stretches back to the 1960s.
While experts say the process of making the fuel itself is not patented, there are patents in existence for enhancing certain characteristics of the fuel. A May 5, 2000 Silverado press release stated that Dr. W. Willson “co-holds a U.S. Patent (No. 4,337,142)” for the “Continuous Process for Conversion of Coal.” While Willson is listed as one of five inventors of the patent, the document lists the assignee (the party that actually holds the patent and attendant rights) as “The United States of America as represented by the United States,” adding that the invention arose out of work performed while under contract to the U.S. Department of Energy.
Willson is also listed as one of seven inventors for a patent described as “Methods to enhance the characteristics of hydro-thermally prepared slurry fuels.” The assignee for that patent is the Energy & Environmental Research Center in Grand Forks, N.D. That work was funded in part by four Department of Energy cooperative agreements, and as such the patent states, “The U.S. Government may have certain rights in the invention.”
Dr. Michael Jones, of the EERC, told WND that Silverado had not applied for nor inquired about a license for use of the patent. Jones is associate director of industrial relations and technology commercialization at the EERC, and adjunct assistant professor of physics at the University of North Dakota.
WND asked Anselmo about seeming discrepancies in the company’s claims of controlling patents and of holding “proprietary rights” to the production of LRCWF, as compared to statements from government documents and scientific experts.
Anselmo answered: “He [Dr. Willson] has certain proprietary rights necessary to run the process.” When asked, “And what rights are those?” the CEO replied, “The rights we do not put forth. He’s published, uh, people can look at those, um, they’re all published … we’re not going to point people where to go.”
What about Silverado’s claims, in its promotional materials, that it is “close to winning” a $9.7 million DOE grant? The company applied for the federal funding under the Clean Coal Power Initiative, a program that is actually a co-operative agreement requiring cost-sharing and re-payment.
The Department of Energy has been reviewing these proposals now and announced the selections as this report was going to press.
Silverado was not awarded federal funding. The company’s explanation for being turned down was that the $313 million in federal funding “went to major polluters to clean up.”
Silverado’s application for federal funding listed as “partners” Great Northern Engineering in Anchorage, Alaska, and The Mineral Industry Research Laboratory at the University of Alaska, Fairbanks.
However, an employee of Great Northern Engineering, who declined to be named, denied to WND that there was any partnership between the companies, stating GNE has simply performed contractual work for the company on occasion. Messages left for GNE owner John Riggs were not returned.
Likewise, Dr. Sukumar Bandopadhyay, director of the Mineral Industry Research Lab at the University of Alaska, stated that there was “not yet” a partnership between Silverado and the lab.
Ron Pierce, director of the University of Alaska’s “Clean Coal Project” also denied there was any connection between the university and Silverado. Pierce coordinates the construction and management of the project and assists in obtaining funds for future construction activities.
The UAF Clean Coal Demonstration Project was sponsored by the U.S. Department of Energy. The project called for the assembly of a proving facility for the commercial demonstration of low-rank coal water fuel (LRCWF) production and utilization technology. The project involves construction of a LRCWF processing facility and installation of a 6.4MW (9.6MW on oil) 18-cylinder diesel engine that will burn LRCWF. A 6,000-hour demonstration period is planned to show the performance and economics of the technology in both reciprocating engine and boiler applications. After a valiant effort and over $48 million in funding, the project is currently stalled and awaiting further funding.
As indicated in its federal funding application, Silverado estimated the total cost of its project to be only $23,961,760, the estimated Department of Energy share to be $9,718,366 and Silverado’s estimated share to be $14,243,394.
Prior to the recent announcement, WND asked Joann Zysk, an Acquisition and Assistance Division contract specialist with the National Energy Technology Laboratory, whether Silverado was indeed a “top contender” for the federal funding, as its public statements have indicated. Zysk said that she had already been made aware of the information and added, “What they’re [Silverado] putting out there is very misleading.”
Asked to comment on the “partners” that denied the relationship Silverado claimed, Anselmo told WND: “They’ll deny it. They’ll deny being part of it, they’ve turned us down on a number of occasions.”
Asked why would they want to deny it, Anselmo answered, “Oh, the politics have been unbelievable,” citing “a lot of jealousies” and stating that “the administration [of the University if Alaska] have [sic] been working with us,” adding that “one of our directors in fact on board of university [is] … Ed Armstrong.”
Anselmo added, “Be careful how you cast things, we’re almost there, let the grant fall. … The University will be good buddies and be wanting to join us.”
Anselmo later called WND to retract the comment identifying Armstrong as a university board member.
Prior to publication of this report, Anselmo called WND and said, regarding the patent information: “I asked you not to go into this,” and warned this reporter repeatedly to “be careful,” adding that the project was “a big political machine,” adding “you don’t want to be posting that information,” and to “let this [the awarding of $9.7 million in federal funding] happen.”
In vague, rambling comments, he tried to persuade WND to not divulge its findings regarding the patent issue, because “they [the EERC] applied for the patent under fraudulent data.” In response, Dr. Michael Jones of the EERC told WND, “We stand by our patent.”
Silverado’s most recent 10Q and its last Annual Report make no mention of a “revolutionary new” fuel, or of “control” over a technology, or of “proprietary rights” to the LRCWF process.
Described in advertorials as “highly evolved,” the company’s LRCWF project is depicted in SEC filings as “in its initial stages,” “still in the start-up phase” and “not a reportable segment.”
However, some of the company’s heaviest spending has been on “research and development” targeted towards the development of the fuel process.
SEC filings indicate research activities attributable to the company’s low-rank coal water fuel technology were at $202,034 for the nine months ended Aug. 31, 2002, and $209,656 for the nine months ended Aug. 31, 2001.
While SEC filings also indicate that Silverado has no employees, and Anselmo told WND that he does not take a salary from Silverado, these relatively high research and development costs for the “unreportable segment” are billed through Tri-Con Mining, Ltd., a private company controlled by Anselmo.
Under the current contract dated January 1997, work is charged at cost plus 15 percent for operations and cost plus 25 percent for exploration and development. Cost includes a 15 percent charge for office overhead, even though Tri-Con uses Silverado’s offices.
Silverado has significant office overhead. The most recent 10Q puts office expenses at $141,193.
In addition, “management services from related party” were at $147,055, and “general exploration” was at $82,184. The SEC filing also states, “At August 31, 2002, the Company had advanced $776,521 to the Tri-Con Mining Group for exploration, development and administration services to be performed during the current fiscal year on behalf of the Company.”
Another area of financial focus for the company is paid advertorials and promotion programs. Even in periods of low gold sales, Silverado consistently has shown to spend tens of thousands of dollars in promotional advertorials – as much as $45,000 per newsletter campaign. Per the company’s latest 10Q filing, Silverado spent $118,700 on advertising and promotions, and had revenue from gold sales of $971. For the same period, the company spent $1,019,168 in “consulting fees.”
Advertorials have appeared in such stock promotional venues as Diablo Alert, Penny Picks, Wall Street Universe, the Bull & Bear Financial Report, CEOCast, Equity Alert, Emerging Company Report and International Economist J. Wesley Savage and his Princeton Research, Inc. group. Positive “press” from the latter on behalf of Silverado appeared in March 1997″ and May 1997.
No indication is given as to whether Savage received compensation for his reports. Two of those stock-touting companies used by Silverado – Emerging Company Report and Princeton Research – were named in the SEC’s first Internet securities fraud sweep in 1998.
One unpaid stock report, Stock Patrol, noted: “If Silverado is paying these various online promoters, investors may question its allocation of resources. … After all, despite a thirty year operating history, Silverado’s mining operations are not profitable, its liquid assets are meager, and its revenues are sparse. Could available funds be put to more productive use – like building the fuel production facility?”
Bob Chapman and David Tice
Silverado has also had a strong supporter in the person of Bob Chapman, a high-profile gold “analyst” who puts out the International Forecaster newsletter. CEO Anselmo told WND that Chapman is a highly trusted figure in gold circles, adding that “the old folks just dote on him, and trust his every word.”
Chapman told WND, “Silverado is one of the best junior exploration stocks in North America today. We recommended the stock at $0.08 and it has traded as high as $0.76.” Silverado has been featured in some of Chapman’s newsletters.
A Silverado advertorial lists Chapman as an “analyst.”
SEC filings indicate that on Oct. 15, 2001, Chapman entered into a “consulting agreement” with Silverado.
The agreement was for a duration of eight months, and included the issuing of 675,000 common shares of the company to Chapman on Jan. 15, 2002, and 225,000 common shares of the company on the fifteenth day of each month of the term of the agreement thereafter, commencing Feb. 15, 2002, for an aggregate maximum of 1,800,000 shares.
WND asked Anselmo what type of consulting services Chapman provided, and if that included promoting that company. “No, not for promotions,” said Anselmo. “It was introductions to groups in Europe, it’s, um, uh, people who can assist Silverado. In um, the coal, low-rank coal water fuel industry, opportunities in other countries, uh, it was introductions to people here in North America, including David Tice, and he [Bob Chapman] writes us up in his reports to his very large e-mail list, and uh, supports Silverado’s efforts.”
Indeed Tice’s name has appeared in Silverado advertorials with tantalizing phrases such as, “What does a savvy investor like David Tice see in Silverado?” Anselmo maintains that Chapman and Tice are close, and that Tice respects Chapman’s advice. According to the CEO, Chapman was instrumental in steering Tice towards Silverado: “Chapman told him to get off his ass and get after Silverado,” Anselmo said.
He added, “They [Prudent Bear Fund] bought private placement for treasury stocks and they buy in the open market and he has warrants in the company that he’ll exercise at some point.”
But Anselmo also admits that Tice did not want his investment to be touted publicly, adding “I don’t know what he’s waiting for.”
Tice’s Prudent Bear Fund was recently called the “No. 1 mutual fund in the country,” by Fox News channel’s Neil Cavuto. For the 6 months ended Sept. 30, 2002, the Prudent Bear Fund returned 58.89 percent while the S&P 500 lost 28.36 percent and the NASDAQ lost 36.49 percent. Consistent with their investment philosophy, the fund holds more short positions than long, and Tice is long on gold.
Tice also has a sterling reputation for sounding warnings on over-inflated stocks, and is known for his scathing research reports.
Early on in its investigation of Silverado, WND called the Prudent Bear fund and asked representative Rob Peebles to comment on Silverado’s use of Tice’s name, indicating that WND had found seeming contradictions in communications about Silverado.
Promising to call WND back shortly, Prudent Bear officials instead contacted Silverado, and within minutes WND received a phone call from CEO Anselmo, calling from a hotel in San Francisco: “I’m very upset,” he said. “I understand WND is doing a hatchet job on Silverado.”
A month later, a further call to Peebles was made, during which he stated that Prudent Bear does not comment on individual companies, and that David Tice had contacted Anselmo after the initial inquiry by WND. Peebles forwarded Tice’s e-mail and indicated Tice would now be able to answer WND questions. WND never received a response from Tice regarding Silverado, or its use of his name to promote Silverado stock.
WND did obtain, however, an e-mail exchange between a professional stock trader and Peebles, asking him to comment on the same issue, and enumerating alleged misrepresentations made by Silverado of its business within advertorials mentioning Tice’s name. Peebles responded, “As you can imagine, David did not authorize such marketing materials and has spoken to the firm about it.”
Prudent Bear’s Annual Report indicates the company purchased 1 million shares of Silverado stock and 1 million options.
‘Cirque du Anselmo’?
While Silverado rides high on its stock upswing and garners increasing attention from the use of such names as Bob Chapman and David Tice, some professional stock traders and businessmen are crying “foul” and accusing the company of being a “pump and dump” scheme. One referred to it as “Cirque du Anselmo.”
“Pump and dump” is a practice by which a large group of people buy into a low-priced stock and start touting the equity. This is most frequently done on the Internet. Then when others buy in at an inflated price, the group sells and makes a profit while the investor is left holding a large loss.
WND has also obtained complaints filed with the SEC and addressed to Emily Breckinridge, Kara Axel and Jessica Ridgley of the Pacific Regional office of the SEC. The complaints allege fraudulent business practices on the part of Silverado, and complain of SEC laxity in failing to intervene.
Are the complaints legitimate concerns or just the disgruntled efforts of opportunistic short-sellers? WND attempted to contact Breckinridge, but was referred instead to the assistant regional director for the SEC’s Pacific Regional Office, Kelly Bowers.
Bowers would not comment on the complaints, and was not able to answer the simplest questions without extensively leafing through an SEC manual in search of an answer. Bowers finally suggested WND look through the manual itself.
WorldNetDaily asked Miami attorney Gary Goodenow Sr. to comment on the issue. Without divulging the company name, or any persons or entities connected to Silverado, WND gave Goodenow public statements made by the company as well as pertinent SEC filing information. Goodenow is licensed to practice in the State of Florida and the District of Columbia, and has served in large law firms, his own firm and the Securities and Exchange Commission.
During his tenure at the SEC,. Goodenow served as staff attorney, branch chief, senior trial counsel and senior counsel. In the latter capacity, Goodenow made the final recommendations on which cases the office would investigate and prosecute and which it would decline. He has variously investigated and prosecuted cases for the SEC, supervised the work of five or six SEC staff attorneys, and was responsible for litigating about 30 enforcement cases at any one time in federal court.
Gary Goodenow Sr., former SEC prosecutor
Goodenow also participated as an author and panelist at the Fourteenth Annual Conference on Money Laundering, Cyber Crime and International Financial Crimes and writes extensively on systemic problems at the SEC. His most recent op-ed, “SEC Chairman Must Go,” appeared in the Miami Herald.
Regarding the use of a famous person’s name (David Tice), Goodenow said: “Regretfully, I report that the best thing a person or group behind a pump and dump could hope for is to have an important personality invest.” He explained: “Sales of the stock of such a venture will be presented to the investing public as having the imprimatur of a person who it seems would have the resources to learn the legitimacy of the investment.”
Goodenow compared the situation WND presented to him with the Premium Sales case he brought while at the SEC. “The fraud-doers took in about $425 million, and the investors, because of rollovers of their ‘profits,’ thought they were out around a billion dollars.” He added: “What was critical to the fraud was that baseball great Joe DiMaggio had invested $100,000. If it was honest enough for the ‘Yankee Clipper,’ it was seemingly honest enough for other investors.”
Goodenow’s advice? “I caution my clients never to buy on hype of who is in a stock,” he said, “unless – and this is a big ‘unless’ – the personality has gone on record endorsing the investment.”
He further cautioned, “By ‘on the record,’ I do not mean salespersons’ statements or PR copy that he or she has invested. I mean endorsements to third-party members of the investment community or to journalists who cover investments. Any investment conduct to the contrary is fraught with hazard. Anyone who tells you that it’s not risky is either an idiot or a liar.”
Regarding Silverado’s meteoric rise, Goodenow said he would be “very, very, very leery of a stock that has risen 750 percent in a year. … My reaction is one of complete skepticism, and this view is exacerbated by your reporting if the hype that a significant investor has a position and that upon your inquiry, it appears that they company and the putative investor ‘circled the wagons’ to borrow a phrase from movie westerns.” He added, “I think it is reasonable for me to say that any journalist on to a pump and dump, would likely be called a person performing a ‘hatchet job.'”
In his last year at the SEC, Goodenow was in charge of the “New Matter Committee,” responsible for the intake of all complaints, tips, news articles and the like. “Based on that,” he said, “if I got a report of a OTC:BB stock, up 750 percent, with the matter unsettled factually as to how or if a major personality was involved, and I had a journalist stating that the reaction to his or her inquiries was for the company to consider the questions to be a ‘hatchet job,’ I would think. And again, I note that you’ve given me no proper nouns – I think in that circumstance I would have strongly recommended that the New Matter Committee order an investigation forthwith.”
Goodenow told WND, “What can I say? It seems to me that you have found the contradictions that are all ‘red flags.'”
Specifically, Goodenow emphasized:
- “The claim of $7.5 million in projected gold sales this year ‘raises my eyebrows.'”
- “The ‘partners’ issue may stem from the situation where there may be no legal definition of ‘partner’ in the state law that governs any such partnership agreement – but we likely will not know ‘choice of law provision’ of such an agreement because you have learned there is no agreement – very strange.”
- “The ounces of gold involved would be questioned by the SEC to learn the factual basis of the claims. No basis, then the fraud provisions kick in.”
- “The SEC would not likely countenance an expert opinion, like that required to make an assay report, made by ‘insiders’ as such people seem to me to be from your description.”
- “The whole ‘fuel technology’ [LRCWF] that’s ‘decades old,’ yet without a ‘single drop,’ for me just reeks of fraud.”
One stock analyst, who declined to be named, told WND that in general the region of Vancouver was known to give rise to pump and dumps: “It’s well-known among bulletin board traders that Vancouver is the mother-ship of all pump and dumps. “He theorizes, that historically, this was because “it’s more difficult to prosecute someone in Vancouver, therefore they’re less inclined to do it.”
For that reason, he advises investors therefore, to protect their investment by giving extra diligence to examining such companies prior to investment.
Goodenow also sought to shed light on the how the Vancouver area in general got such a history.
“The Vancouver Stock exchange has had a very, very bad reputation among the enforcement attorneys of the SEC. It got that reputation from investigations years prior to my service, which showed, or suggested, that the VSE was used to launder money organized crime skimmed off the Las Vegas casinos.”
He added, “Whether that reputation is presently deserved or not, I do not know. But I do know that I do not presently own any stocks traded on the VSE.”
(Note: This history of the VSE does not pertain to Silverado itself, which is an OTCBB stock,and which does not trade on what is now theTSX Venture Exchange, part of the TSX Group, which also includes the Toronto Stock Exchange, TSX Markets and TSX Datalinx.)
Adding further words of caution, Goodenow said: “Pump and dumps are often used for money laundering. And the people who need their money laundered do not accept failure very well. They express their disappointment at failure with guns. I keep thinking of that Goldcor case, also a pump and dump, also with gold … and a person was murdered.”
Goodenow was referring to Richard D. Brown, 51, who was found shot dead at his home in Daytona Beach, Fla., on the morning of Saturday, Aug. 17, 1991. He had been shot once behind his left ear, execution-style. His murder is still unsolved.
Brown had been due to appear in court three days later, on Aug. 20, in connection with a 21-count criminal indictment against him for his involvement in Goldcor, a mysterious securities scam that netted up to $100 million.
In the Goldcor case, it’s been estimated as many as 3,000 investors could have lost between $75 million and $100 million investing in the scam. Many of the investors were Christians who trusted Goldcor because of Brown’s “religious” background. Brown was the founder of the International Christian Life Ministries, described as an evangelical outreach ministry based in Daytona Beach.
Goodenow warns that “there’s very little the SEC can or will do to prevent the losses” incurred by duped investors.
Meanwhile, Silverado’s CEO, Garry Anselmo, considers any suggestion that his company is a “pump and dump” to be “bulls–t.” He added, “Sure we promote it, but there is no ‘dump.'” Claiming support from U.S. senator and now Alaska’s Republican governor, Frank Murkowski, as well as others, based on supportive letters written by the politicians about Silverado, Anselmo is confident that the momentum behind Silverado will continue and that the next three years will bring about a bonanza in gold sales.
In the meantime, investors might want to review those financial statements, even if the politicians don’t have the time.