Znetix/Health

Hearing held on Znetix/Health Maintenance Centers Fraud Case

(2/14/02)  A hearing was held in U.S. District Court in Seattle in the Znetix Inc./Health Maintenance Centers Inc. stock-fraud case.  On January 23, the Securities and Exchange Commission (SEC) had filed an emergency action stopping an ongoing $74 million securities fraud scheme by Kevin L. Lawrence of Bainbridge Island, Washington and his companies, Health Maintenance Centers, Inc. ("HMC") and Znetix, Inc.  After hearing arguments, the judge granted the relief measures sought by the SEC.

The judge granted the request for a temporary injunction against the defendants, enjoining them from future violations of federal securities laws.  The SEC's request for a freeze on the companies' assets was continued, and a receiver over the companies was appointed.  The receiver is Michael Grassmueck, 1423 SW Columbia St., Portland, OR  97201 PH: (503) 294-9928.  The receiver may also be contacted by email at info@znetix.com .

The SEC's request followed actions taken by the Securities Division of the Department of Financial Institutions, which filed a cease and desist order last April against Health Maintenance Centers, Lawrence, and their agents prohibiting them from selling stock.  The order said, among other things, that Lawrence misled investors about a Znetix public offering and the risks associated with the HMC investment. The full text of the 2/14/02 order and any new information available from the receiver can be found on the Znetix Web site at http://www.znetix.com/.