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.