St. Louis, Mo.-The founder and chairman of Earthly Mineral Solutions Inc. (EMS) has pleaded guilty to fraud charges for a scheme to sell 250 investors $18 million in mining claims that supposedly contained rich deposits of a fertilizer material in the desert south of Las Vegas. According to Acting U.S. Attorney Michael Reap, Roy Higgs, 67, of Henderson, Nev., pleaded guilty to one felony count of conspiracy to commit mail fraud and now faces a maximum penalty of five years in prison and fines up to $250,000 when he is sentenced Sept. 14. Co-defendant Frank Schwartz, 45, of Los Angeles, was sentenced in April to three years imprisonment for his role in EMS after pleading guilty in January to working for the company and failing to report its fraudulent activities to authorities. EMS is a Nevada corporation and from 2004 through 2006 sold hundreds of investors across the country approximately $18 million worth of fertilizer mining claims. Higgs, Schwartz, EMS, and the company’s former general counsel, Rick Lawton, also face a civil enforcement action brought by the Securities and Exchange Commission. That case is pending in Las Vegas and has been stayed pending the outcome of the St. Louis case. As part of his guilty plea, Higgs agreed to resolve the SEC case. In all, Reap reported, more than 250 investors have lost principle and interest payments they were promised as part of their agreement to invest in EMS’s mining claims.
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