Court bars prosecution in alleged gold scam

Tuesday, March 3, 1998 | 10:12 a.m.

CARSON CITY -- Because of technical foulups, the Nevada Supreme Court has stopped the prosecution in Clark County of four men who allegedly bilked investors in a $400 million gold scheme.

The 3-2 court decision prevented state Attorney General Frankie Sue Del Papa's office from amending a grand jury indictment to cure the defects in the case of Daniel V. Hancock, Richard P. Boyer, Charles E. Dixon and Frank Hine.

"We conclude that the state's indictment was neither plain, concise nor definite," Justice Bob Rose wrote in the majority opinion.

"The record shows that the state has been repeatedly told that its charging documents were defective or vague, yet the state made no significant effort to change the language it employed throughout the proceedings of this case, starting with the original criminal complaint," Rose wrote.

Justices Miriam Shearing and William Maupin dissented, saying it was "an abuse of discretion" by District Judge Joseph Pavlikowski to bar the attorney general's office from correcting the defects in the indictment.

"Although the original indictment was defective in form, the allegations it contained were sufficient to place respondents (the accused) on notice of the charges against them," Shearing said.

"The proposed amended indictment contained no additional or different offenses and would not have prejudiced the substantial rights of the respondents," Shearing said.

The four were originally charged in March 1994 with racketeering and securities fraud by telling would-be investors they wanted to recover 50 tons of gold bars from federal lands near Ely.

They allegedly said they needed money to retrieve and store the gold, which would be moved to Florida, dumped in international waters and then recovered as tax-exempt sunken treasure.

Eleanor Desiano invested $130,000 and Calvin Williams put up $25,000 in the venture. The attorney general's office said the four men failed to produce any gold or repay the investors.

The criminal information was dismissed in District Court in Las Vegas on grounds it was "vague and ambiguous." The attorney general's office then took the case to the grand jury and an indictment was returned in February 1995.

Lawyers for the four men challenged the indictment, saying it was unclear and it improperly included two different crimes within single counts. The state tried to amend the indictment, listing 16 counts of violation of the law, instead of the 10 counts in the original grand jury indictment.

The Supreme Court said the indictment lumps the four men together making it "very difficult to decipher who is alleged to have done what." It agreed with the defense lawyers there were two crimes improperly listed in every count.

Rose said in the majority opinion that the proposed amendments "would have materially altered the criminal indictment." He noted the grand jury issued a 10-count indictment but that the attorney general wanted to turn it into a 16-count indictment. The four defendants, he said, would have been denied due process.

Chief Justice Charles Springer and Justice Cliff Young agreed with Rose.

Shearing and Maupin said the proposed amended indictment contained no additional charges and this would "not have prejudiced the substantial rights of the respondents."

Shearing said the four defendants first complained there were two crimes improperly charged in each count of the indictment. Then when the attorney general's office sought to correct the indictment, the four said this had prejudiced them.

"I do not agree that respondents should be able to succeed in asserting these inconsistent positions," Shearing said.