HOUSTON (CN) - A Honduran rock exporter says it lost $500,000 thanks to promises from a Texan who claimed he owned an antimony concession in Honduras - but doesn't.
Genesis Agregados Honduras sued Tom Cross, of La Porte, in Federal Court. The Honduran company claims that Cross "continues to attempt to market the concession on the Internet," though it found out, to its cost, that he does not own it.
"Complainant is a corporation, and among other ventures, has engaged in the mining and importation of volcanic rock from Honduras to the Gulf Coast of the United States for utilization in various levee, and other, water control projects primarily by the United States Corp of Engineers," according to the complaint. "Defendant, Tom Cross, apparently learned of complainant's mining expertise and instituted contact with complainant regarding an antimony concession that defendant represented he owned in Honduras known as the El Caliche, Santa Rita, Santa Barbara.
"Complainant investigated the antimony market and learned it was a viable product that could be profitably mined and sold on the world market.
"Complainant hired a geologist and a mining engineer to survey and test the site to determine the quality of antimony in the concession and determined that there was sufficient antimony to make the concession commercially profitable with an investment of sufficient funds for mining equipment and transportation equipment for movement of product from concession to port of shipment, Puerto Cortez on the Caribbean Sea."
The complaint continues: "Under Honduran law the state owns all subsurface rights and issues concessions thereon to qualified persons for development. The government receives revenue from the developer and the landowner receives a relatively small stipend. The landowner has no voice in the awarding of a concession."
Genesis Agregados claims Cross told it "he owed the Honduran Minister of Mines $14,000 in back taxes that had to be paid to make the concession active and that he would enter into a lease purchase agreement to lease the concession with an option to purchase upon complainant's payment to his attorney, Sylvia Nohemi Martinez Doblado, for his account the sum of $15,000."
Genesis Agregados says it paid the Honduras government $26,869.47 for back taxes on the concession, and $24,812.00 to Cross, through his attorney.
And that's not all, the company says: "Complainant, predicated on defendant's agreement: purchased mining equipment to mine the antimony from the concession; hired geologists and engineers; and contracted labor to work on the concession at a cost of $500,000.
"Complainant, based on the scientific studies, negotiated a tentative joint venture with Mina Emusa, a large Bolivian mining consort whereby they would provide the equipment and manpower to mine the concession and transport it to port for 50 percent of the net profits, which would have netted a minimum of $5,000,000 to complainant per year."
The company says Cross signed a lease in November 2011, granting it an option to purchase the concession.
Genesis says it found out, too late, that Cross didn't own the concession in the first place.
"After incurring the foregoing expenses, predicated on defendant's representations, complainant, preparatory to exercising its option to purchase the concession contacted the office of the Minister of Mines and learned that defendant was not the registered owner of the concession and incapable of transferring the same," the complaint states.
Genesis seeks $10 million in punitive damages, $551,000 in compensatory damages and an injunction to stop Cross as he allegedly "continues to attempt to market the concession on the Internet." It is represented by Lawrence Wiedemann, of Metairie, LaFollow @cam_langford
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