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by Mike Caswell

Jeffrey Mitchell, one of the defendants in the massive CMKM Diamonds Inc. pump-and-dump, has pleaded guilty to one count of securities fraud, admitting that he helped provide an "inexhaustible supply of shares" to others. Prosecutors claimed that Mr. Mitchell was an employee of a transfer agent that was key to the CMKM scheme. As part of his work, he ignored many signs of fraud as he helped issue hundreds of share certificates, the government said.

Mr. Mitchell entered the plea in a one-hour appearance before Nevada Judge Jennifer Dorsey on Monday, Sept. 30. As part of his plea agreement, prosecutors have agreed to recommend a reduced sentence, with that recommendation dependent on his continued co-operation. The plea agreement does not say what that reduced sentence could be. It does, however, say that Mr. Mitchell has agreed to a $10-million forfeiture order. (All figures are in U.S. dollars.)

Mr. Mitchell was one of 10 people indicted for the CMKM Diamonds fraud. He worked at 1st Global Stock Transfer, a Las Vegas transfer agent that allegedly issued over 700 billion shares as part of the scheme. Prosecutors claim that CMKM's promoters dumped many of those shares between 2002 and 2004, reaping $60-million in profits.

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