Fact Check: Berkley Ad Ties Heller to Alleged Scam

By Steve Kanigher

Published 08/10 2012 04:26PM

Updated 05/25 2015 01:04AM

Claim: A new advertisement endorsed by Senate candidate and Democratic Rep. Shelley Berkley that is airing in Southern Nevada states: "While Heller was supposed to be stopping fraud a Nevada diamond company broke the law, scamming thousands of investors out of $64 million and Heller took campaign cash from a co-conspirator and his office authorized the sale of the company's stock."

Verdict: A sliver of truth but mostly ranging from misleading to false. The sliver of truth is that when Republican Sen. Dean Heller was Nevada's secretary of state, the Las Vegas company CMKM Diamonds incorporated in Nevada and began selling shares to investors. But the company, which peddled penny stocks, was delisted in 2005 by the Securities and Exchange Commission after the federal government alleged that the company's claim of operating diamond mining operations was a scam. The government later indicted many of the principals, alleging they sold unregistered securities. Although the secretary of state's office approves applications to form corporations and sell securities, the ad is misleading because the office is generally powerless to prevent scam artists from breaking the law. There are examples too numerous to name over the past several decades where individuals whose companies were otherwise in good standing with the Nevada Secretary of State's office committed fraud. The worst part of the ad, though, is the false accusation that Heller took campaign cash from a "co-conspirator." The campaign contribution in question was made in June 2005 to Heller's 2006 campaign for Congress by Rendal Williams, then CEO of U.S. Canadian Minerals in Las Vegas. The Dow Jones News Service reported in 2004 that U.S. Canadian, with Williams at the helm, acquired a 5 percent interest in CMKM Diamonds. But Williams was not among the individuals indicted by the government in the CMKM case.

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