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by Mike Caswell

Geologist John Paterson has received a sentence of six years for rigging assay results in Southwestern Resources Corp. Provincial Court Judge Harbans Dhillon handed down the sentence on Friday morning, describing his scheme as a "large scale fraud" that inflicted losses of $260.5-million on investors. Judge Dhillon found that Mr. Paterson committed a breach of trust during four years in which he caused the company to report inflated gold figures.

The sentence comes four months after Mr. Paterson, 62, pleaded guilty to criminal charges stemming from the inflated results. Prosecutors claimed that he overstated as many as 443 figures in 25 news releases. The end result of his scheme was that Southwestern had to had to publicly state that all results from its Boka project in China could not be relied upon. The subsequent sell-off sent the stock to $2.90 from $6.34 in one day, and eventually wiped out $300-million in market capitalization, prosecutors said. Mr. Paterson, who had been the company's president since 1991, resigned just before the collapse.

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