Gold mining securities fraud draws $5 million in restitution and penalties

The Arizona Corporation Commission says they have "ordered former Scottsdale resident John M. McNeil, California resident [and former Edmonton Oilers owner] Peter Pocklington and their affiliated companies to pay $5,149,316 in restitution and a $100,000 administrative penalty for committing securities fraud in connection with a gold mining venture" near Quartzite, Arizona.   The ACC announcement went on to say:

The Commission found that, while not registered as securities salesmen or dealers in Arizona, respondents McNeil, Pocklington and their affiliated companies— Crystal Pistol Resources, LLC, Crystal Pistol Management, LLC, and Liberty Bell Resources I,LLC — told at least 120 investors that they had obtained mineral rights to a placer mine outside of Quartzite, Arizona, and would begin mining and processing gold on the site within a short period of time. The Commission found that the respondents obtained at least some investors by making unsolicited telephone calls to them and that some investors were taken to the mine site, which was located on U.S. Bureau of Land Management land. Additionally, the Commission found that Crystal Pistol prepared newsletters in which it claimed to be offering one of the most lucrative dividend plans in the mining business and that hedge funds and banks were interested in the project. The Commission found, however, that the estimates of gold resources on the respondents’ website were not supportable with the methods currently available in the industry. In settling this matter, the respondents neither admitted nor denied the Commission’s findings, but agreed to the entry of the consent order.

CBC News in Canada reports that Pocklington issued a news release saying that his "company has worked diligently and honestly with its investors and any errors were the result of inexperience and naivete, not malice or avarice, and were quickly rectified."