Analysis of Why A. Clifton Hodges Chose a Bivens Action to Pump his Pump and Dump Fraud

In my Whistleblower Complaint, Case Number HO102219 (Whistleblower Complaint), I provided an abundance of conclusive evidence that proved that the trust fund that A. Clifton Hodges (Hodges) defined in his Bivens Action, Civil Action 1000031, David Anderson, Lt. Col, et al, vs. Christopher Cox, et al, Complaint for Declaratory Judgment and for Violation of Civil Rights, 1-4-10, United States District Court, Central District of  California (Bivens Action), is nonexistent.

And if the trust fund that Hodges defined in his Bivens Action, the Definable Trust Fund, is nonexistent, and he predicated his entire Bivens Action on its existence, then either he had to have been clueless for even filing it, or he had to have had ulterior motives for filing it.

In my Whistleblower Complaint, I provided an abundance of conclusive evidence that proved that Hodges did indeed have ulterior motives for filing his Bivens Action: he utilized it to perpetrate a pump and dump fraud, thereby making his Bivens Action fraudulent (Fraudulent Bivens Action).

In this article, I will analyze why Hodges chose a Bivens Action to pump his pump and dump fraud.

A Bivens Action is a particular type of tort action. According to the dictionary, a tort is “a civil wrong arising from an act or failure to act, independently of any contract, for which an action for personal injury or property damages may be brought.”

People who are injured by the negligent and wrongful acts and omissions of other people can always file tort actions against those people.

But prior to 1946, people who were injured by the negligent and wrongful acts and omissions of employees of the United States Government (federal employees) were barred from filing tort actions against those federal employees or the United States Government itself by a legal doctrine called Sovereign Immunity.

Sovereign Immunity refers to a government’s immunity from being sued by its citizens without its consent. Sovereign Immunity can be traced back to the English common law of the 13th Century.

The only remedy tort victims of federal employees had was to persuade the US Congress to pass private bills to compensate them.

In 1946, the US Congress enacted the Federal Tort Claims Act (FTCA), which provides tort victims of federal employees with a limited waiver of the Sovereign Immunity of the United States Government, when federal employees commit torts within the scope of their employment.

Those tort victims of federal employees who commit torts within the scope of their employment can choose one of the following 3 tort actions from which to file in US District Court:

1. They can file tort actions that are cognizable under the FTCA, and that are predicated upon violations of state tort laws.

They will be mandated by the Federal Employees Liability Reform and Tort Compensation Act of 1988 (Westfall Act) to file those tort actions against the United States Government, as the Westfall Act bars tort actions against federal employees in their individual capacities.

Therefore, pursuant to Title 28, US Code, Chapter 87, Section 1402(b) (28 USC §1402(b)), they would file the tort actions against the United States Government in the District of the United States District Court in which all or a substantial part of the torts occurred.

They will be able to easily collect judgments and settlements against the United States Government. Whereas federal employees in their individual capacities could lack the funds to satisfy judgments and settlements, the United States Government has created a Judgment Fund from which they can collect judgments and settlements.

They will be mandated to file Administrative Claims, pursuant to Title 28, US Code, Part 6, Chapter 161, Section 2401(b), with the federal agencies in which the federal employees work as a prerequisite to their filing tort actions against the United States Government.

They can judiciously prepare their Administrative Claims by using Standard Form 95s and then mail them to the appropriate federal agencies. They would only be able to file tort actions against the United States Government after those federal agencies either denied the Administrative Claims or failed to act on them within 6 months.

2. They can file tort actions that are Bivens Actions. Bivens Actions are constitutional tort actions that are only cognizable pertaining to Justice Brennan’s opinion under the Supreme Court’s decision in Bivens vs Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971).

They could have the right to collect judgments and settlements from federal employees in their individual capacities despite the absence of statutes conferring such a right.

They will file those Bivens Actions against federal employees in their individual capacities in a United States District Court.

They could have difficulty collecting judgments and settlements from federal employees in their individual capacities.

They will be able to file Bivens Actions against those federal employees in their individual capacities without the prerequisite of having to file Administrative Claims with the federal agencies in which the federal employees work.

3. They can file tort actions that are predicated upon violations of federal statutes, policies, and/or regulations.

They will file those tort actions against federal employees in their individual capacities in a United States District Court.

They could have difficulty collecting judgments and settlements from federal employees in their individual capacities.

They will be able to file tort actions against those federal employees in their individual capacities without the prerequisite of having to file Administrative Claims with the federal agencies in which the federal employees work.

If Hodges would have made just the following allegations in his Fraudulent Bivens Action, it would have been a tort action that is cognizable under the FTCA:

“These actions of withholding distribution of said moneys, without compensation….”

See Fraudulent Bivens Action, Paragraph 37.

“….the Defendants acting alone and acting in concert with each other, and acting without just cause, did consciously, knowingly, intentionally and wrongly cause certain acts and omissions to proceed in such a manner as to hinder, delay, and ultimately prevent the distribution of moneys held for the benefit of Plaintiffs, and all similarly situated….”

See Fraudulent Bivens Action, Paragraph 53 (b).

“The Defendants, and each of them, did unlawfully and wrongly cause certain acts and omissions to proceed in such a manner as to hinder, delay, and ultimately prevent the distribution of moneys held for the benefit of Plaintiffs and all similarly situated….”

See Fraudulent Bivens Action, Paragraph 53 (d).

But for reasons that I will explain infra, Hodges made further allegations in his Fraudulent Bivens Action that changed the tort action that is cognizable under the FTCA to a Bivens Action:

“….and without DUE PROCESS OF LAW, amounting to a TAKING of the property….” (emphasis added by author).

See Fraudulent Bivens Action, Paragraph 37.

“….for the CONSTITUTIONAL and other rights of the Plaintiffs….” (emphasis added by author).

See Fraudulent Bivens Action, Paragraph 38.

“….denied their CONSTITUTIONAL rights, including, but not limited to, their FIFTH AMENDMENT right to be secure in their property, free from TAKING  without just compensation and without DUE PROCESS OF LAW….” (emphasis added by author).

See Fraudulent Bivens Action, Paragraph 39.

“….disregard for the CONSTITUTION and other rights of the Plaintiffs….” (emphasis added by author).

See Fraudulent Bivens Action, Paragraph 53 (c).

“….CONSTITUTIONAL right to receive said moneys….” (emphasis added by author).

See Fraudulent Bivens Action, Paragraph 53 (d).

“….CONSTITUTIONAL right to receive said moneys….” (emphasis added by author).

See Fraudulent Bivens Action, Paragraph 53 (e).

“….violated and denied the Plaintiffs’ CONSTITUTIONAL rights….FIFTH AMENDMENT right….free from TAKING….without DUE PROCESS OF LAW” (emphasis added by author).

See Fraudulent Bivens Action, Paragraph 56.

“….CONSTITUTIONAL rights of Plaintiffs….” (emphasis added by author).

“….CONSTITUTIONAL and other rights of Plaintiffs….” (emphasis added by author).

See Fraudulent Bivens Action, Paragraph 58.

If Hodges would have chosen to file a tort action that is cognizable under the FTCA, he would have been mandated to file an Administrative Claim with the Securities and Exchange Commission (SEC) as a prerequisite to filing a tort action for negligence and a failure to exercise due care against the United States Government in the United States District Court, District of Nevada,

Hodges obviously reasoned that having to file an Administrative Claim and then having to possibly wait six months to file a tort action against the United States Government would have failed to pump his pump and dump fraud.

Therefore, Hodges chose to file a Bivens Action, because he would not have been mandated to file an Administrative Claim with the SEC as a prerequisite to filing a Bivens Action against the federal employees of the SEC in their individual capacities; thus, a Bivens Action would pump his pump and dump fraud.

If Hodges would have chosen to file a tort action that is cognizable under the FTCA, he would have been unable to provide a Nevada Revised Statute (NRS) that refers to a trust fund that is held for the benefit of shareholders much less provides for the release of one, because such a NRS is nonexistent.

Therefore, Hodges obviously reasoned that if he were unable to allege in a tort action that the federal employees of the SEC were mandated to follow a NRS, he might not even have the basis for a tort action, and therefore it might have been dismissed summarily. And if it were dismissed summarily, it would have failed to pump his pump and dump fraud.

Even if Hodges filed a tort action that was cognizable under the FTCA, and it was not disposed of summarily, the federal employees of the SEC would have used the Discretionary Function Exception, which is a defense that protects federal employees who use discretion in their alleged violations of state laws.

If Hodges would have chosen to file a tort action that is predicated upon a violation of federal statutes, policies, and/or regulations, he would have been unable to provide a Title of the US Code or a Title of the Code of Federal Regulations (CFR) that refers to a trust fund that is held for the benefit of shareholders much less provides for the release of one, because such a Title is nonexistent.

Therefore, Hodges obviously reasoned that if he were unable to allege in a tort action that the federal employees of the SEC were mandated to follow a Title of the US Code or a Title of the CFR, he might not even have the basis for a tort action, and therefore it might have been dismissed summarily. And if it were dismissed summarily, it would have failed to pump his pump and dump fraud.

Even if Hodges filed a tort action that was predicated upon a violation of federal statutes, policies, and/or regulations, and it was not disposed of summarily, the federal employees of the SEC would have used the doctrine of Qualified Immunity. Qualified Immunity is a judicially created defense which protects federal employees who use discretion in their alleged violations of statutes, policies, and/or regulations. Qualified Immunity operates similarly to the Discretionary Function Exception in tort actions that are filed under the FTCA.

Thus, Hodges chose to file a Bivens Action, because he could allege a violation of the US Constitution (Fifth Amendment Right of Due Process) against the federal employees of the SEC in their individual capacities, and it probably would not be dismissed summarily; thus, a Bivens Action would pump his pump and dump fraud.

If Hodges would have chosen to file a tort action that is cognizable under the FTCA, he would have been able to easily collect judgments and settlements from the United States Government. Whereas federal employees of the SEC would have lacked the funds to satisfy judgments and settlements, the United States Government has even created a Judgment Fund from which he could have collected judgments and settlements.

If the allegations that Hodges made in his Fraudulent Bivens Action were genuine, he surely would have chosen to file a tort action that is cognizable under the FTCA, because then he would have at least had the possibility of being able to collect from the United States Government at least a portion of the exorbitant amount of money that he alleged in his Fraudulent Bivens Action:

“As a result of the Defendants’ acts, Plaintiffs and all those similarly situated have suffered injuries and property loss in excess of 3.87 Trillion Dollars….”

See Fraudulent Bivens Action, Paragraph 58.

The United States Government has even created a Judgment Fund from which Hodges could have collected some of that 3.87 Trillion Dollars.

Because Hodges just utilized his Fraudulent Bivens Action to pump his pump and dump fraud, he viewed that the federal employees of the SEC would lack the funds to satisfy even a minuscule amount of 3.87 Trillion Dollar as being irrelevant.

In other words, Hodges just alleged the preposterous amount of 3.87 Trillion Dollar to pump his pump and dump fraud.

In my Whistleblower Complaint, one of the ways I proved that Hodges utilized his Fraudulent Bivens Action to perpetrate a  pump and dump fraud was by proving that some of the events he alleged to have occurred could not have occurred.

Thus, if Hodges had allowed his Fraudulent Bivens Action to go to discovery, he would have been unable to prove, inter alia, that the following events occurred:

“At some date prior to June, 2004 the Securities and Exchange Commission in concert with the Department of Justice of the United States, together combined with Robert A. Maheu and others to utilize CMKM Diamonds, Inc. for the purpose of trapping a number of widely disbursed entities and persons who were believed to be engaged in naked short selling of CMKM Diamonds Inc. stock and cellar boxing the company.”

See Fraudulent Bivens Action, Paragraph 32.

“Consented to, facilitated,  and supported the conferences between Robert Maheu and his associates on the one hand, and the wrongdoing short sellers on the other, all for the purpose of settling the potential liability of said wrongdoers with consent of the U.S. government and a representation of no criminal prosecution for such illegal sales;”

See Fraudulent Bivens Action, Paragraph 32(d).

“During the period from March, 2004 through August 2006, on behalf of CMKM Diamonds, Inc. Robert A. Maheu, with assistance from others, negotiated a settlement with the illegitimate brokers, dealers, market makers, hedge funds, other persons and entities that had engaged in naked short selling of CMKM Diamonds Inc. stock and cellar boxing the company. In exchange of a U.S. Government promise of no prosecution for such sales, the wrongdoers each promised to pay negotiated amounts to a frozen trust for disbursal at a later time.”

See Fraudulent Bivens Action, Paragraph 34.

“The original agreement — there was a war that ensued after the sting got under operation, because what the sting always contemplated was that Mr. Maheu would collect all of these bad doers — the hedge fund people and the people like Waterhouse and all the other stockbrokerage houses around who were naked shorting this company, collect them all in a big room and offer them a deal for two reasons: first of all, to collect money for CMKX for what had been done to them in effect; second of all, to teach these people a lesson that there were people out there watching what was going on, and hopefully that would head them off in continuing in such illicit, illegal, and improper behavior. That was in fact done, and I have a witness who was there when it was done. They had a room about three times the size of your courtroom in which they had representatives from all these brokerages from all over the world who were there present. They watched a video presentation, because Mr. Maheu as the Court may be aware was at one time closely associated with the CIA and Howard Hughes and all kinds of other people…. At any rate, all of these people were accumulated in this room, and they were shown a video and a slide presentation of all of the evidence of their wrongdoing, and they were offered an opportunity that you could either step up and sign away your money and pay a reasonable amount for each transaction that you did illegally and improperly, or you can walk out of here and get prosecuted and go to jail because what you did is criminal. Every single person in that room stepped and made a deal.”

See 8-2-10 Hearing for the Bivens Action. 

Hodges obviously did not want to disclose that revealing information to the United States Department of Justice, District of Nevada (DOJDN), because then the DOJDN would have been forced to investigate him.

In other words, the DOJDN would have been forced to reason that either Hodges was clueless for even filing his Fraudulent Bivens Action, or he had ulterior motives for filing it such as perpetrating a pump and dump fraud.

Thus, Hodges had to guarantee that his Fraudulent Bivens Action would be dismissed before it reached discovery. And he did that by making the following allegations in his Fraudulent Bivens Action and Fraudulent Bivens Action Revised First Amended Complaint, which gave the federal employees of the SEC discretion to determine when and even if the Definable Trust Fund could be released to the shareholders of CMKM Diamonds, Inc. (CMKM).

“….the Securities and Exchange Commission reserved unto itself the sole and absolute  DISCRETION to determine when moneys collected pursuant to the scheme set forth above would and could be released for distribution” (emphasis added by author).

See Fraudulent Bivens Action, Paragraph 36.

“Once the moneys had been collected Defendants COX, GLASSMAN, ATKINS, CAMPOS, and NAZARETH assumed disbursement  CONTROL of the funds and the RIGHT to DETERMINE when the RELEASE of the moneys to the shareholders should occur.” (emphasis added by author)

“Robert Maheu further agreed that no CMKM liquidation assets would be distributed WITHOUT CONSENT of the Defendant Commissioners.” (emphasis added by author)

See Fraudulent Bivens Action Revised First Amended Complaint, Paragraph 49.

And by giving the federal employees of the SEC that discretion, Hodges guaranteed that the SEC could utilize Qualified Immunity as a defense to protect its federal employees who use discretion in their alleged violations of  the US Constitution.

In other words, the federal employees of the SEC would have been able to use their discretion to determine when and even if the Definable Trust Fund could have been released to the shareholders of CMKM.

Although my following analysis is unrelated to my analysis of why Hodges chose a Bivens Action to pump his pump and dump fraud, I perceive it as the coup de grace that confirms that the Fraudulent Bivens Action is indeed fraudulent, that Hodges utilized it to pump his pump and dump fraud, and that the Definable Trust Fund is nonexistent.

Hodges alleged in his Fraudulent Bivens Action that:

“At some date prior to June, 2004,” Robert Maheu conducted a sting, and that “During the period from March, 2004 through August 2006,” Robert Maheu negotiated a settlement.

See Fraudulent Bivens Action, Paragraphs 32 and 34.

Therefore, according to those allegations, Hodges portrayed Robert Maheu as being robust from circa 6-04 through 8-06.

According to the 4-20-06 SEC Deposition of Robert Maheu, Robert Maheu was so sick on 4-26-06 that the deposition had to be conducted telephonically.

Robert Maheu died on 8-4-08, which is just 2 years after Hodges portrayed him as being robust.

Hey, Hodges, explain that discrepancy!

Any person who initiated a sting and negotiated a settlement would not only have had to be robust, that person would also have had to be insightful to be able to accomplish such a coup.

Therefore, such a robust and insightful person would also have been able to determine a feasible way to get a trust fund released to the shareholders of CMKM.

In other words, such a robust and insightfulness person would surely not have given the federal employees of an inept and corrupt SEC control of the trust fund.

Furthermore, such a robust and insightful  person  would surely not have given any inept and corrupt version of CMKM Management – the Original CMKM Management, the Previous CMKM Management, or the Current CMKM Management — control of the trust fund.

Such a robust and insightful person would have surely given an escrow company control of the trust fund, and that escrow company would have released the trust fund to the shareholders of CMKM.

Therefore, if such a robust and insightful person would have been in control, a tort action would have been unnecessary.