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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
PANWORLD SECURITIES UTAH INDICTMENT UNITED STATES DISTRICT PREFERRED STOCK CHARGES EXCHANGE COMMISSION ROBERT DAVID SECURITIES FRAUD FAILING AUDITOR ASSET LAS ROSAS FALSE STATEMENTS REPORT DISCLOSE WASHINGTON GULCH PROFIT SHARES PAYMENT EUROPA MILL PROCESSED ORE QUARTERLY REPORT WASHINGTON GULCH PLACER MONTANA CRIMINAL CONVICTION |
SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 15758 / May 28, 1998
UNITED STATES v. ROBERT G. WEEKS AND DAVID A. HESTERMAN (D. Utah,
2:98CR0728S)
The Securities and Exchange Commission and the United States Attorney
for
the District of Utah announced the filing late yesterday of a criminal
indictment charging two men from Salt Lake City, Utah with three counts
of
securities fraud in connection with sales of stock in PanWorld
Minerals
International, Inc. The indictment filed in the United States
District
Court for the District of Utah charges Robert G. Weeks and David A.
Hesterman, PanWorld s then president and consultant, with failing to
tell
PanWorld s auditor during the 1992 audit that the company s principal
asset, the Las Rosas mine in Chile, was overvalued at $3,473,000 for
several reasons. It is alleged that Weeks and Hesterman failed to tell
the
auditor that the mine could not be operated at a profit, that they had
failed to deliver 3 million shares of preferred stock in payment for
the
mine, and that they had arbitrarily valued the preferred stock at $1
per
share. The indictment also charges Weeks and Hesterman with making
similar
false statements in PanWorld s 1992 annual report filed with the SEC
about
Las Rosas and failing to disclose that the Europa Mill, which processed
ore
from the mine, had been repossessed. The indictment also charges Weeks
and
Hesterman with making false statements in PanWorld s March 1993
quarterly
report with the SEC by including the Washington Gulch placer mine
located
in Montana as an asset worth approximately $5.5 million, when in fact
the
company did not own Washington Gulch. Weeks and Hesterman also failed
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