On 12-20-10, I filed Whistleblower Complaint, Case Number HO102219 (Whistleblower Complaint) with the Securities and Exchange Commission (SEC) -- pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted 7-21-10, which establishes a whistleblower program that requires the SEC to pay awards to whistleblowers who voluntarily provide the SEC with original information that leads to successful SEC enforcement actions and certain related actions -- against A. Clifton Hodges, Esq., Hodges and Associates (Hodges).

Although I failed to provide direct evidence — confessions, eyewitness testimony, signed contracts — in my Whistleblower Complaint, I provided an abundance of circumstantial evidence -- accused murderers have been convicted of murder and sentenced to death on less circumstantial evidence -- which I utilized to present a compelling res ipsa loquitur argument which points to the obvious, common-sense explanation:

Hodges created litigation — Bivens Action, Civil Action No. 1000031, David Anderson, Lt. Col, et al, vs. Christopher Cox, et al, Complaint for Declaratory Judgment and for Damages for Violation of Civil Rights, 1-4-10, United States District Court, Central District of California (Bivens Action) — for the purpose of using it to fabricate allegations of a trust fund, which Hodges, insiders of CMKM Diamonds, Inc. (CMKM), and select CMKM shareholders (fraudsters) utilized as the fulcrum to perpetrate their ongoing frauds.

Although the United States Department of Justice, District of Nevada (DOJ) corroborates the truth I uncovered in my Whistleblower Complaint as evidenced by claiming in its official statement that it has “not encountered any evidence indicating that a government agency [which allegedly included the DOJ] conducted a sting operation against naked short sellers of CMKM stock,” and that it has “also not come across any evidence of any settlement fund (much less any settlement fund with trillions of dollars) potentially available to pay possible claims of CMKM shareholders,” it has failed to even include a fraud alert in its official statement.

The DOJ can rectify that injustice by first inserting a fraud alert in its official statement and then by ultimately indicting Hodges for fabricating his allegations in his Bivens Action for the purpose of perpetrating ongoing frauds. If the DOJ fails to take those necessary actions, it is in fact allowing the fraudsters to defraud unsuspecting investors -- e.g., the unsuspecting investor the fraudsters defrauded in tripper's 1-14-11 post -- with impunity.

In essence, the current position of the DOJ in its official statement of dismissing the unsubstantiated allegations of Hodges in his Bivens Action pertaining to a sting operation and a settlement fund, but failing to even include a fraud alert in its official statement, and then failing to ultimately indict Hodges for fabricating those same allegations for the purpose of perpetrating ongoing frauds, is a mockery of justice.

The United States District Court, Central District of California,(District Court), initially dismissed the Bivens Action. Hodges appealed the decision of the District Court to the United States Court of Appeals for the Ninth Circuit (Appeals Court). On 12-19-12, the Appeals Court put out a Memorandum in which it denied the Appeal Brief and affirmed the decision of the District Court to dismiss the Bivens Action.

In essence, the legal system is indisputably grossly negligent for allowing the Bivens Action to sully the hallowed courtrooms of both the District Court and the Appeals Court. Therefore, the fact that piece of tripe made it all the way to the Appeals Court is not a testament to the validity of that piece of tripe; on the contrary, it is an indictment against a legal system that would even allow that to happen.

Therefore, the legal system must investigate the causes of this travesty and make the necessary changes to prevent a similar occurrence.

If the DOJ fails to indict the fraudsters for perpetrating ongoing frauds, the only other alternative is for the DOJ to disclose that Hodges did not fabricate his allegations in his Bivens Action for the purpose of perpetrating ongoing frauds. Then the DOJ must change its official statement to reflect that a sting operation actually occurred and a settlement fund actually exists.