OKLAHOMA CITY – Westwin Elements Inc., “an Oklahoma company founded to help solve America’s critical minerals crisis,” filed a lawsuit earlier this month accusing a Canadian corporation and four of its principal officers of committing a multimillion- dollar fraud.
Westwin is building “America’s first” cobalt and nickel refinery in Oklahoma, and its demonstration plant in Lawton opened last August.
However, in June 2022, Kamran Khozan, founder, chairman, and chief executive officer of CVMR, announced that this company planned to build a rare-earth metals refinery in Amarillo, Texas, that “will be the first of its kind in the United States.”
Westwin’s suit was filed in Oklahoma City’s Western District federal court against:
• Chemical Vapor Metal Refining (CVMR), a Canadian corporation based in Toronto, Ontario, Canada.
• Kamran Khozan, identified in the second sentence of the lawsuit as “a con artist” who lives in Ontario.
• Michael Hargett, president of CVMR, is thought by Westwin to be a U.S. citizen living in North Carolina.
• John Finley is thought by Westwin to be a Canadian citizen living in Ontario.
• Sydney Lu is purportedly a Canadian citizen living in Ontario.
Khozan and Hargett “physically visited” Lawton “several times in relation to the project” at the center of the lawsuit, Westwin related: in August and December 2022 and in January 2023.
Westwin is suing CVMR and Khozan to recover $3 million it paid in January 2023 for a feasibility study that was never delivered. Khozan initially agreed to refund the $3 million “but has repeatedly refused since,” Westwin claims in its petition.
The lawsuit claims the defendants also cost Westwin hundreds of thousands of dollars in expenses and lost time “pursuing a completely fraudulent joint venture…” Westwin also wants monetary damages “in an amount to be proven at trial,” along with punitive and exemplary damages.
No refinery in U.S. for crucial metals Nickel, cobalt, and manganese are minerals “America depends on for the manufacture of vital products, including batteries, medical tools, military equipment, and aerospace technologies,” Westwin points out.
However, “there is no refinery within our nation’s borders capable of processing these crucial metals,” rendering the U.S. dependent on foreign sources, mostly refineries in China and Russia.”
Westwin was incorporated in Delaware and was founded in Bartlesville, but moved its principal place of business to Oklahoma City. The company was founded by Oklahoma native KaLeigh Long “to help eliminate America’s dependence on foreign sources … for refined nickel, cobalt, and manganese.”
CVMR and Khozan offered to create a partnership with Westwin, “touting CVMR as a world leader in refining technology with exclusive, patent-protected capability to produce refined cobalt, nickel, and other mineral in quantities and qualities “superior to others in the industry.”
Via “patently false representations about CVMR’s technology, employees, experience, and operational capabilities,” the defendants “fraudulently induced Westwin” to “form a joint venture to build and operate a refinery in Lawton, using CVMR’s alleged proprietary vapor metallurgy technology and processes.”
Westwin alleges that the defendants falsely claimed that CVMR:
• Had active operations in Oak Ridge, Tennessee, “and would be moving its headquarters there.”
• Had mining operations and access to feedstock in multiple countries.
• “Generates billions of dollars in revenue annually and employs thousands,” constantly referring Westwin to “an inaccurate report” by Dun & Bradstreet for support.
• Employs engineers – one of whom had died years earlier – who would be responsible for operations of the joint venture.
• Produced in its (nonexistent) Turkey refinery samples of cobalt nitrate that it presented to Westwin and one of its prospective customers for testing during due diligence.
• Was opening a plant in Amarillo, Texas. Production capabilities were ‘unrealistic’ The defendants also misrepresented CVMR’s actual past production and current production capabilities “at levels it later had to admit were ‘unrealistic’…” In addition, the requisite technology “is not proven on a commercial scale anywhere in the world.”
The defendants also misrepresented that their pilot plant in Canada was “turned off for safety” reasons during Westwin’s due diligence visit. Actually, the plant “was not shut down for any safety concern” and had been “inoperable for many years” – which explained “the lack of employees present.”
At various times all the defendants “misrepresented to Westwin” that CVMR could design and construct a refinery with a production capacity of 10,000 tons per annum of refined product “for an estimated cost to Westwin of approximately $150 million.”
CVMR also “admitted” that the cost to design and construct the refinery – “if the requisite technology had existed” – would have “vastly exceeded” $150 million.
In fact, Westwin alleges, a third party said that a 10,000-ton refinery would cost approximately $1.5 billion.
Westwin further alleges that Khozan “and his ring of co-conspirators” have perpetrated “their fraudulent scheme” on “numerous other persons and entities” throughout the world, establishing a “clear pattern and practice” of “intentionally and maliciously stealing money through outright lies and deception.”
Meanwhile, in Amarillo, Texas The $1.5 billion CVMR (Texas) facility supposedly planned for construction in Amarillo – a groundbreaking ceremony was held in June 2022 – is projected to encompass approximately 500,000 square feet on 540 acres off US-60.
Company, county and city officials said CVMR expects to hire 1,000 new employees in the first phase of the project, with the potential of up to 2,500 employees in future phases, consisting of $97 million of annual projected payroll.
According to theTexas Real Estate Research Center, the Amarillo deal will provide CVMR with $20 million for the creation of more than 1,000 jobs over the next 10 years and a 100% tax abatement for 10 years.
CVMR officials met with members of the Amarillo Economic Development Committee on Nov. 18, 2024, to prepare for groundbreaking on the first phase of the CVMR refinery there, which is projected to produce 10,000 tons per year of high-purity nickel powders and nickel nano powders based on CVMR’s proprietary powder metallurgy processes and technologies.
Kamran and Hargett were photographed together at the Amarillo site on Nov. 19, 2024.
Phase one of the project will involve refining of nickel; thereafter the modules for the refining of heavy rare earth elements will be commissioned and become operational, CVMR reports on its website.
Heavy rare earth metals are defined by their higher atomic weights relative to light rare earths. They are less common, and some elements within the group are facing shortages as demand outpaces supply. That typically makes them more valuable than light rare earths. They include elements such as dysprosium, yttrium, terbium, holmium, erbium, thulium and lutetium.
Most of the minerals CVMR says it plans to refine in Amarillo are “sourced within the United States and Canada, thus making sure that their supply chain is secure and the risks associated with the supply of raw materials are minimized,” the company says.
The Department of Energy’s Pantex plant – the primary U.S. nuclear weapons assembly and disassembly facility – is located approximately 30 miles east of Amarillo in the Texas Panhandle. Pantex “aims to maintain the safety, security and reliability of the U.S. nuclear weapons stockpile.”
Southwest Ledger was unable last week to reach any of the defendants nor any city, county, or economic development individuals involved in the Amarillo project.