A salt marsh in Mineral County, Nevada. (Courtesy Nevada Bureau of Mines and Geology)
State regulators allege that while he was on probation for securities fraud, a Colorado man committed more securities fraud when he sold investments in make-believe mines.
Arlus Daniel, 74, was sued June 18 by the Colorado Division of Securities, which is seeking restitution for his alleged victims and an order banning him from selling investments. The agency claims he is a repeat offender who violated state law and his own parole.
“Scammers who commit fraud over and over again are often very persuasive,” Tung Chan, the state’s securities commissioner, said in a statement. “They could sell sand in a desert.”
Or, allegedly, nonexistent quarries in a desert, in Daniel’s case.
In 2007, the Fort Collins man was convicted of four counts of theft and securities fraud in Larimer County, and sentenced to 18 years in prison. One of his victims, an 84-year-old woman, testified that Daniel had defrauded her and her husband out of $500,000, including by convincing them to sign over a life insurance policy, according to media reports.
After his release from prison in 2021, Daniel returned to a life of fraud, the state said.
On April Fools’ Day 2021, Daniel incorporated the company D’MINE Inc. and began soliciting investments in diatomaceous earth mines. Diatomaceous earth, also known as diatomite, is a sedimentary rock that can be processed and used in a variety of products.
By June 2021, just 45 days into his parole, Daniel was telling investors that D’MINE would have sales of $4 million in 2021, would double its sales each quarter during 2022, and would reach $300 million in annual sales by 2024, according to the Division of Securities’ lawsuit.
“Any investment amount will provide very handsome returns!” a Craigslist ad touted. Investors were allegedly told to expect a return of 300-500 percent within five years “OR better!”
Daniel is accused of telling one investor during a call in June 2021 that D’MINE had access to 240 million tons of diatomite in Nevada which, if sold at “the very lowest price” of $1,000 per ton, valued it at $240 billion. Daniel allegedly told the young woman, who had just inherited $400,000, that giving it to him would make her a millionaire “many times over!”
In reality, “D’MINE existed only on paper,” the Colorado Division of Securities alleges.
“D’MINE held no leases for mines, nor had D’MINE purchased land for mining. It had secured no permits for mining, had no employees, no equipment and no actual ability to mine.”
It’s not clear how much money investors lost to Daniel and D’MINE. A dollar figure was not provided in the lawsuit and a Division of Securities spokeswoman declined to say.
“We recommend investors take their time, ignore urgent pitches, do some research online and remember, if it’s too good to be true, it probably is,” said Chan, the securities commissioner. “If you have been solicited by Mr. Daniel, please contact the Division of Securities.”
Daniel did not respond to phone calls and emails from BusinessDen asking him to discuss D’MINE. His LinkedIn page still touts mining investments, claiming that his “environmentally conscientious D’MINE Inc.” now “has access to 192 million tons of DIATOMITE.”
Coincidentally, Daniel is not the only Coloradan who was accused by the government last week of lying about his stake in a Nevada mine. On June 18, the U.S. Securities and Exchange Commission filed a civil fraud charge against the local penny stock Western Sierra Resource Corp., its CEO Roger Johnson and chief financial officer Dennis Atkins.
The company and its executives, who did not answer requests for comment, stand accused of lying in press releases about a stake in a Nevada gold mine. The SEC is seeking to fine the defendants an undetermined amount and ban them from trading penny stocks.
A salt marsh in Mineral County, Nevada. (Courtesy Nevada Bureau of Mines and Geology)
State regulators allege that while he was on probation for securities fraud, a Colorado man committed more securities fraud when he sold investments in make-believe mines.
Arlus Daniel, 74, was sued June 18 by the Colorado Division of Securities, which is seeking restitution for his alleged victims and an order banning him from selling investments. The agency claims he is a repeat offender who violated state law and his own parole.
“Scammers who commit fraud over and over again are often very persuasive,” Tung Chan, the state’s securities commissioner, said in a statement. “They could sell sand in a desert.”
Or, allegedly, nonexistent quarries in a desert, in Daniel’s case.
In 2007, the Fort Collins man was convicted of four counts of theft and securities fraud in Larimer County, and sentenced to 18 years in prison. One of his victims, an 84-year-old woman, testified that Daniel had defrauded her and her husband out of $500,000, including by convincing them to sign over a life insurance policy, according to media reports.
After his release from prison in 2021, Daniel returned to a life of fraud, the state said.
On April Fools’ Day 2021, Daniel incorporated the company D’MINE Inc. and began soliciting investments in diatomaceous earth mines. Diatomaceous earth, also known as diatomite, is a sedimentary rock that can be processed and used in a variety of products.
By June 2021, just 45 days into his parole, Daniel was telling investors that D’MINE would have sales of $4 million in 2021, would double its sales each quarter during 2022, and would reach $300 million in annual sales by 2024, according to the Division of Securities’ lawsuit.
“Any investment amount will provide very handsome returns!” a Craigslist ad touted. Investors were allegedly told to expect a return of 300-500 percent within five years “OR better!”
Daniel is accused of telling one investor during a call in June 2021 that D’MINE had access to 240 million tons of diatomite in Nevada which, if sold at “the very lowest price” of $1,000 per ton, valued it at $240 billion. Daniel allegedly told the young woman, who had just inherited $400,000, that giving it to him would make her a millionaire “many times over!”
In reality, “D’MINE existed only on paper,” the Colorado Division of Securities alleges.
“D’MINE held no leases for mines, nor had D’MINE purchased land for mining. It had secured no permits for mining, had no employees, no equipment and no actual ability to mine.”
It’s not clear how much money investors lost to Daniel and D’MINE. A dollar figure was not provided in the lawsuit and a Division of Securities spokeswoman declined to say.
“We recommend investors take their time, ignore urgent pitches, do some research online and remember, if it’s too good to be true, it probably is,” said Chan, the securities commissioner. “If you have been solicited by Mr. Daniel, please contact the Division of Securities.”
Daniel did not respond to phone calls and emails from BusinessDen asking him to discuss D’MINE. His LinkedIn page still touts mining investments, claiming that his “environmentally conscientious D’MINE Inc.” now “has access to 192 million tons of DIATOMITE.”
Coincidentally, Daniel is not the only Coloradan who was accused by the government last week of lying about his stake in a Nevada mine. On June 18, the U.S. Securities and Exchange Commission filed a civil fraud charge against the local penny stock Western Sierra Resource Corp., its CEO Roger Johnson and chief financial officer Dennis Atkins.
The company and its executives, who did not answer requests for comment, stand accused of lying in press releases about a stake in a Nevada gold mine. The SEC is seeking to fine the defendants an undetermined amount and ban them from trading penny stocks.
