UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Securities Act of 1933
Release No. 7681 / May 11, 1999
Administrative Proceedings
File No. 3-9897
CEASE-AND-DESIST PROCEEDINGS INSTITUTED AGAINST
LAWRENCE M. ARTZ, NEUROTECH CORP., ENHANCE RESOURCES, INC. AND
BRUCE W. LYNCH FOR FRAUDULENT INTERNET OFFERING
The Commission has issued an Order Instituting Cease-and-Desist
Proceedings and Notice of Hearing Pursuant to Section 8A of the
Securities Act of 1933 (the "Order") against Lawrence M. Artz
("Artz"), Neurotech Corp. ("Neurotech"), Enhance Resources, Inc.
("Enhance") and Bruce W. Lynch ("Lynch"). Artz resides in Roslyn, New
York, and Neurotech Corp. is located in Manhasset, New York. Enhance
is located and Lynch resides in Brookline, Massachusetts.
In the Order, the Division of Enforcement ("Division") alleges that
Artz and Lynch conducted a fraudulent Internet offering of notes in
the nominal amount of $15 million, the proceeds of which were to be
used to construct prefabricated hospitals in Turkey. The Division
alleges that, beginning in June 1998, Artz falsely represented to
Lynch that Neurotech had received purchase orders for five hospitals
in Turkey. The Division further alleges that Artz falsely represented
that three well-known Turkish banks had agreed to guarantee the notes,
so that there would be no risk to investors that they would not
receive repayments of principal or interest. The Division further
alleges that Artz provided to Lynch three fake bank guarantees, which
he claimed evidenced the banks' agreement to guarantee the notes.
Beginning in August 1998, Lynch posted on two Internet websites that
he created an offering of the $15 million notes. Without investigating
whether Neurotech had received the Turkish hospital purchase orders or
whether the three Turkish banks identified by Artz had agreed to
guarantee the notes, Lynch attempted to solicit investors for the
notes by publishing the false statements on the websites. In addition,
Lynch went beyond Artz's representations by publishing revenue and
earnings (before taxes) projections for a completed hospital of,
respectively, $27 million and $4 million. Lynch's only basis for these
figures was projections relating to a hypothetical, prefabricated
hospital in Cambodia. The Division alleges that, by these activities,
Artz, Neurotech, Enhance and Lynch violated Sections 5(c), 17(a)(1),
and 17(a)(3) of the Securities Act of 1933.
A public hearing will be scheduled to determine whether the
allegations against Artz, Neurotech, Enhance and Lynch are true and,
SNIPPETS:
CEASE-AND-DESIST PROCEEDINGS INSTITUTED AGAINST LAWRENCE M. ARTZ, NEUROTECH CORP., ENHANCE
AND BRUCE W. LYNCH FOR FRAUDULENT INTERNET OFFERING
The Commission has issued an Order Instituting Cease-and-Desist
Proceedings and Notice of Hearing Pursuant to Section 8A of the Securities Act of 1933
Artz resides in Roslyn, New York, and Neurotech Corp. is located in Manhasset, New York.
In the Order, the Division of Enforcement alleges that Artz and Lynch conducted a fraudulent
The Division alleges that, beginning in June 1998, Artz falsely represented to Lynch that
The Division further alleges that Artz falsely represented that three well-known Turkish
Without investigating whether Neurotech had received the Turkish hospital purchase orders or
In addition, Lynch went beyond Artz's representations by publishing revenue and earnings
Lynch's only basis for these figures was projections relating to a hypothetical,
A public hearing will be scheduled to determine whether the allegations against Artz,
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