U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17587 / June 26, 2002
SECURITIES AND EXCHANGE COMMISSION v. HEALTH MAINTENANCE CENTERS,
INC., ZNETIX, INC., CASCADE POINTE OF ARIZONA, LLC, CASCADE POINTE OF
NEVIS, LLC, KEVIN L. LAWRENCE, DONOVAN C. CLAFLIN, CLIFFORD G. BAIRD,
BAINBRIDGE HUMAN PERFORMANCE CENTERS, PLLC, KIMBERLY ALEXANDER, BONNIE
M. COUCH, STACY GRAY, and VICKI L. LAWRENCE, Civil Action No. C
02-0153 P (W.D. Wash.)
COMMISSION SETTLES $91 MILLION SECURITIES FRAUD WITH COMPANIES BASED
IN WASHINGTON STATE, ARIZONA, AND NEVIS AND WITH CEO'S ESTRANGED WIFE
On June 6, 2002, the Securities and Exchange Commission settled fraud
and registration charges with Znetix, Inc., and Health Maintenance
Centers, Inc. ("HMC"), based on Bainbridge Island, Washington; and
registration charges against Cascade Pointe of Arizona, LLC, and
Cascade Pointe of Nevis, LLC (collectively "Cascade"). Additionally,
the Commission settled with relief defendants Bainbridge Island-based
Bainbridge Human Performance Centers, PLLC ("BHPC") and Vicki
Lawrence, 28, estranged wife of Znetix and HMC CEO Kevin Lawrence. As
alleged in the Commission's complaint filed on January 23, 2002,
Znetix, HMC and Cascade raised more than $91 million from more than
5,000 investors nationwide with false promises of an imminent,
lucrative initial public offering of Znetix.
Znetix and HMC, without admitting or denying the Commission's
allegations, consented to the entry of a judgment, entered by the
Federal District Court in Seattle, permanently enjoining them from
future violations of the antifraud and securities registration
provisions of the federal securities laws (Sections 5(a), 5(c) and
17(a) of the Securities Act of 1933 and Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 thereunder). Cascade,
without admitting or denying the Commission's findings, consented to
the entry of a judgment permanently enjoining it from future
violations of Sections 5(a) and 5(c) of the Securities Act. Znetix,
HMC, Cascade, BHPC and Vicki Lawrence agreed to disgorge all
ill-gotten gains from the stock offerings. Among Vicki Lawrence's
ill-gotten gains are three parcels of prime Washington state real
estate, two luxury automobiles and one fire truck. Previously, on
February 15, 2002, the Court appointed a permanent receiver over
Znetix, HMC, Cascade and BHPC. In the event that the permanent
receiver collects more than $91 million from the companies, Znetix,
HMC, Cascade and BHPC agreed to a penalty not to exceed $91 million.
The Commission's case is pending against the remaining defendants,
Kevin L. Lawrence, Donovan C. Claflin, Clifford G. Baird, Kimberly
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION v. HEALTH MAINTENANCE CENTERS,
INC., ZNETIX, INC., CASCADE POINTE OF ARIZONA, LLC, CASCADE POINTE OF NEVIS, LLC, KEVIN L.
M. COUCH, STACY GRAY, and VICKI L. LAWRENCE, Civil Action No. C 02-0153 P (W.D.
COMMISSION SETTLES $91 MILLION SECURITIES FRAUD WITH COMPANIES BASED IN WASHINGTON STATE,
On June 6, 2002, the Securities and Exchange Commission settled fraud and registration
Additionally, the Commission settled with relief defendants Bainbridge Island-based
Lawrence, 28, estranged wife of Znetix and HMC CEO Kevin Lawrence.
As alleged in the Commission's complaint filed on January 23, 2002, Znetix, HMC and Cascade
Cascade, without admitting or denying the Commission's findings, consented to the entry of a
Znetix, HMC, Cascade, BHPC and Vicki Lawrence agreed to disgorge all ill-gotten gains from
Among Vicki Lawrence's ill-gotten gains are three parcels of prime Washington state real
Previously, on February 15, 2002, the Court appointed a permanent receiver over Znetix, HMC,
In the event that the permanent receiver collects more than $91 million from the companies,
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