Former mining exec gets 6 years in jail for faking test results

Written By Unknown on Sabtu, 19 Januari 2013 | 22.40

The former head of a major Vancouver mining firm has been sentenced to six years in prison for faking data from a prospective gold mine and costing investors more than $260 million.

A Vancouver provincial court judge ruled that John Paterson, former CEO and president of Southwestern Resources, abused his authority to fake test results from a Chinese mine.

Judge Harbans Dhillon convicted Paterson on four counts of fraud.

Paterson, 62, pumped out positive press releases and then paid a subordinate in China half a million dollars to block an independent assessment.

The company's stock soared to more than $40 from 15 cents after 2002 press releases announced the mine's results, now known to have been fraudulent.

When it was revealed that the test results were inaccurate, the stock price plummeted from $6 a share to less than $3 a share.

During the trial, which began last September, the court heard how investors had suddenly lost their savings.

"Really, the floor fell out from underneath them," said Crown counsel Ian Hay. "It was an absolute shock and a terrible loss."

Paterson's defence lawyers said he suffers from severe depression and argued he didn't carry out the fraud to line his pockets. Instead, Paterson was motivated by wishful thinking and a crippling fear of failure, his lawyers said.

"I hope it sends a serious message to people who feel they are entitled," Hay said. "I hope it causes them to consider their positions before they breach the trust of others."


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