A federal grand jury indicted two Utah men Wednesday on three counts of securities fraud in connection with stock sales of Pan-World Minerals International Inc.
The U.S. Attorney's Office and the Securities Exchange Commission charged Robert G. Weeks, 56, Salt Lake, and David A. Hesterman, 41, Holladay, with securities fraud and failing to disclose to an accountant, according to an indictment filed Wednesday.Weeks, president and principal executive officer of PanWorld during 1992, and Hesterman, consultant to Pan World, allegedly failed to tell an auditor critical information about the company's principal asset, the Las Rosas Mine.
The indictment states that a Chilean mine, valued in PanWorld's financial statements at more than $3 million, had no mineral reserves, a mining engineer told Weeks and Hesterman.
By failing to tell the auditor that the mine could not be operated at a profit, Weeks and Hesterman caused a failure in the delivery of 3 million shares of preferred stock, which they arbitrarily valued at $1 per share, the indictment says.
Also, the document says that during 1990, Pan World purchased a Europa Mill to process copper ore from the Las Rosas and other mines but did not make the required payments for the mill.
In a third count, Weeks allegedly signed an agreement to receive half of the assets of a Montana mining project, arbitrarily valuing related stock at $2 a share.
However, the closing for the deal didn't take place, according to the indictments.