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WWDB Ruby Pleads Guilty in Znetix Fraud |
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January 1999 Amagram |
In the largest Stock swindle scheme in Washington State's history, over 5,000 investors from 36 states and several foreign countries were victims of a $90 million scheme that touted the imminent public stock offering a health and fitness company, Znetix. Some of the victims included senior citizens and others were solicited by fellow church members or members of social and business organizations. The receiver of Znetix has located only about $12 million to distribute to investors, many of whom were Amway/Quixtar IBOs. The initial Amway/Quixtar connection came from a newspaper article published on QuixtarBlog about an ILD Diamond, Gary Smith, who lost $17,000 with Znetix. In the article Mr. Smith claimed to have introduced other Quixtar participants to the Znetix offering. ILD was an off shoot of the World Wide Dream Builders (WWDB) group. |
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In subsequent articles about the scam, a site visitor associated two World Wide Dream Builders IBOs. Alex Lacson and Alfonso Lacson Jr. as being players in the scam. Alfonzo Lacson pleaded guilty to securities fraud associated with Znetix. Alfonso Lacson Jr. was a Ruby in the WWDB Wolgamott organization. Alex Lacson pleaded guilty to felony obstruction of the investigation and has since reversed his plea. The scam propagated through Washington state churches, Amway/Quixtar distributors as well as Mellaluca MLM distributor Larry Beaman. |
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Site visitors having more information on the Amway/Quixtar connection are encouraged to write me. |
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http://www.usdoj.gov/usao/waw/victim_witness/znetix/victim_witness_cases_znetix.htm For Immediate Release June 20, 2003 BROTHERS CHARGED IN ZNETIX STOCK SCAM John McKay, United States Attorney for the Western District of Washington; Charles E. Mandigo, Special Agent in Charge, Federal Bureau of Investigation; Randall Lee, Regional Director, Securities and Exchange Commission, Pacific Regional Office; Steve Pasholk, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division; and Helen Howell, Director, State of Washington Department of Financial Institutions, announced today that on June 17, 2003, a federal grand jury in Seattle returned a 114-count Second Superseding Indictment charging two additional defendants, ALFONSO LACSON, JR., 34, and his brother, ALEX LACSON, 30, both of Kirkland, Washington, along with five previously-indicted defendants - KEVIN L. LAWRENCE, STEVEN J. REIMER, LARRY L. BEAMAN, MICHAEL J. CULP, and HARVEY W. KUIKEN - with Securities Fraud, Wire Fraud, Mail Fraud, and Conspiracy to Commit these offenses and the Unlawful Sale of Unregistered Securities. The five previously-indicted defendants were also charged with money laundering. Each defendant is charged with some but not all counts. Defendants LAWRENCE, REIMER, and CULP remain in custody pending a trial set for March 22, 2004. Defendants ALFONSO and ALEX LACSON were charged with 50 counts of Securities Fraud, 14 counts of Wire Fraud, 11 counts of Mail Fraud, and Conspiracy to Commit these offenses and the Unlawful Sale of Unregistered Securities. Another defendant, TIMOTHY T. MOODY, was charged in a separate indictment, on three counts of wire fraud, returned on March 27, 2003. Defendant MOODY remains in custody pending a trial set for October 20, 2003. Additionally, four defendants have entered guilty pleas to felony charges. With the indictment of ALFONSO and ALEX LACSON, twelve defendants in total have been charged in connection with the Znetix case. An additional defendant, TERRY GRAY, pled guilty and was sentenced to a period of home detention for obstructing an asset forfeiture proceeding brought in connection with a Znetix-related warehouse on Bainbridge Island, Washington. Defendant ALEX LACSON was arrested by federal agents on June 20, 2003, in Redmond, Washington, and appeared in federal court the same day in Seattle. Defendant ALEX LACSON was released on bond subject to restrictions on his travel, employment, and financial affairs. Defendant ALFSONSO LACSON, JR. remains at large. Each of the 50 counts of Securities Fraud charged against ALFONSO and ALEX LACSON in the Second Superseding Indictment carries with it a maximum penalty of ten years imprisonment and a $1 million fine. Each of the 14 counts of Wire Fraud and 11 counts of Mail Fraud is punishable by up to five years imprisonment and a $250,000 fine. The Conspiracy count is punishable by up to five years imprisonment and a $250,000 fine. According to Court records, the charges against ALFONSO and ALEX LACSON arise out of the government's investigation of the offer and sale of over $80 million or more of securities by Znetix, Inc., Health Maintenance centers, Inc., Cascade Pointe, LLC, and affiliated entities. The Second Superseding Indictment alleges, in part, that defendants ALFONSO and ALEX LACSON illegally sold the securities of HMC, Cascade Pointe and affiliated entities, and used investor funds for their personal benefit. The public is reminded that the Second Superseding Indictment against KEVIN L. LAWRENCE, STEVEN J. REIMER, LARRY L. BEAMAN, MICHAEL J. CULP, HARVEY W. KUIKEN, ALFONSO LACSON, JR., and ALEX LACSON contains only allegations, and that all defendants must be proven guilty beyond a reasonable doubt in a court of law. This case was investigated jointly by the Federal Bureau of Investigation, the Securities and Exchange Commission, the Internal Revenue Service, and the State of Washington Department of Financial Institutions, Securities Division. Assistant United States Attorneys Jeffrey B. Coopersmith, Ye-Ting Woo, Richard E. Cohen, and Special Assistant United States Attorney Todd Brilliant, are prosecuting the case. For further information, please contact Jeffrey B. Coopersmith or Ye-Ting Woo, Assistant United States Attorneys at (206) 553-7970, or John Hartingh, Executive Assistant United States Attorney, at (206) 553-4110. |
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Al Lacson ( Alfonso Lacson, Jr. ) http://www.usdoj.gov/usao/waw/victim_witness/znetix/lacson_alfonso_plea_agreemen t.pdf http://seattlepi.nwsource.com/business/220655_dgst19.html?searchpagefrom=1&searc hdiff=0 http://www.usdoj.gov/usao/waw/press_room/2005/apr/lacson.htm April 19, 2005 ZNETIX STOCK SALESMAN SENTENCED FOR SECURITIES FRAUD ALFONSO D. LACSON, Jr., 36 of Kirkland, Washington was sentenced to 30 months in prison and three years of supervised release yesterday for securities fraud relating to the sale of stock in Znetix, Inc., Health Maintenance Centers, Inc., Cascade Pointe LLC, and affiliated entities. U.S. District Judge Marsha J. Pechman ordered LACSON to pay $623,500 in restitution for his part in the fraud. The $91 million Znetix stock fraud is the largest ever in the State of Washington. The charge against LACSON arose out of the government's investigation of the offer and sale of over $90 million of securities by Znetix, Inc., Health Maintenance Centers, Inc., Cascade Pointe, LLC, and affiliated entities. The conspiracy's ringleader was KEVIN L. LAWRENCE, who is currently serving a 20-year prison term. Over the course of about seven years, LAWRENCE and his co-conspirators defrauded thousands of investors out of approximately $91 million through a massive conspiracy involving false representations and failures to disclose truthful and accurate information in connection with the sale of the securities of Znetix, Inc., Health Maintenance Centers, Inc., Cascade Pointe, LLC, and affiliated entities. The State of Washington's Department of Financial Institutions issued a Cease and Desist Order in April, 2001, directing HMC and its agents to stop selling securities. In his plea agreement, LACSON admitted he willfully sold HMC stock to one investor without informing that investor of the Cease and Desist order. At the sentencing hearing held on April 18, 2005, Judge Marsha J. Pechman, who has handled all of the criminal and civil cases arising out of the Znetix scheme, heard from several witnesses presented by the government and found that LACSON had continued to sell over $600,000 worth of securities to other investors after the Cease and Desist Order barring further sales of HMC stock. In one instance, according to the evidence presented by the government, LACSON convinced a man who knew about the Cease and Desist Order against HMC to invest $75,000 by telling him that HMC had changed its name to "HPC." The fraud on investors was facilitated, in part, by the expenditure of millions of dollars of investors' funds to launch an advertising campaign that included placing a large sign at the Seattle Mariner's Safeco Field, and having sports stars such as Shaquille O'Neal wear a Znetix cap after the Los Angeles Lakers' 2001 NBA championship. The advertising campaign was designed only to sell more stock, as Znetix had no products or services to offer and little or no revenue. Znetix had been touted as a company engaged in providing cutting-edge health and fitness products and services. Judge Pechman enhanced LACSON's sentence based on the companies' use of mass marketing, such as the sign at Safeco Field, to ensnare investors. A representative of the Seattle Mariners testified at the sentencing hearing that Znetix had its sign up at the ballpark during the latter part of the Mariners' 2000 season and for the entire 2001 season. The Mariners' representative also testified that Znetix sponsored a "bat night." Judge Pechman commented that despite all the Znetix advertising, LACSON had "nothing to sell." A court appointed receiver has recovered some of the money lost by investors, through auctions and by pursuing civil actions, such as a lawsuit against the Seattle law firm that represented HMC and LAWRENCE. The Receiver estimated earlier this year that investors may see a return of 20 cents on the dollar. This case was investigated jointly by the State of Washington Department of Financial Institutions, Securities Division, the Federal Bureau of Investigation, the Securities and Exchange Commission, the Internal Revenue Service, and the securities enforcement authorities in several other states, including the states of Illinois, Hawaii, Wisconsin, and Oregon. U.S. Attorney John McKay expressed his gratitude in particular for the work of the State of Washington Department of Financial Institutions, Securities Division, which took the lead in analyzing over 600 bank accounts used in the course of the conspiracy to defraud investors. Assistant United States Attorneys Jeffrey B. Coopersmith, Richard E. Cohen, Ye-Ting Woo and Special Assistant United States Attorney Todd Brilliant prosecuted the case. More information regarding this case, a copy of the Court's Judgment, and other court documents and press releases are available by following the victim-witness and Znetix links on the web site for the United States Attorney's Office. Information about the case also is available on the Receiver's web site. For further information, please contact Richard E. Cohen, Assistant United States Attorney at (206) 553-7970, or Emily Langlie, Public Affairs Officer for the United States Attorney's Office, at (206) 553-4110.
Site Visitor Feedback: I was one of those scammed by Al. He was a real slick salesman with shifty little eyes. But I gotta admit it was my own stupidity (and greed) for investing. |
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